Performance Management from the 80s, 90s and Today!

Recognize this slogan from your favorite radio station? Well, it holds true in performance management too. Performance management is a relatively new function of business. Many of today’s most common performance appraisal methods only just started evolving in the past three and a half decades. There has been a lot of trial and error, especially now that technology is transforming how we do just about anything, but ultimately, performance management is headed in a promising direction.

So, where did all this innovation begin? Let’s walk through what kind of trends performance management has seen in over the years.

The 1980s: Stumbling Into Self Reflection, Forced Ranking, and MBOs

Forced Ranking: The idea of ranking employees on performance is a performance appraisal method former CEO of GE, Jack Welch, introduced in the 80s. Despite its controversial nature of comparing employees’ performance and rating them from best to worst, the idea caught on and is still used today. While the debate continues about the ethics and efficiency of forced ranking, it is not generally used for long-term performance management. Even GE ditched the process over 10 years ago.

360-degree: Performance management in the 1980’s also birthed the 360-degree review. The earliest form of this concept in the performance appraisal process was used by Esso, now called ExxonMobil, in an effort to improve how their supervisors performed. Today, it’s a challenge to find a company that doesn’t use 360-degree feedback. It hasn’t been easy, however. Not long ago, before paperless employee evaluation software existed, it was all pens and paper and manpower sucking up company resources for the sake of improving performance.

Management By Objectives: One of the first collaborative performance appraisal methods was good ole MBOs. Managers work with employees to set performance goals that align with company objectives and set a deadline for meeting their goals. This set the pace for the 1990s, where performance management became an official and integral function of business.

The 1990s: Performance Management Becomes More Than Performance Appraisals

As development in psychometric testing and performance management evolved, the 90s brought a new focus on employee engagement. Now, performance management wasn’t just about performance appraisals, it was more focused on employee motivation and satisfaction. This was a time when employers first started realizing they would have to evolve their performance appraisal process with the times. In fact, in 1997, only 5% of companies were “very satisfied” with their performance reviews and thus began a long journey to more effective reviews that essentially would never end. The internet was changing things but had yet to become a household commodity. It wouldn’t take long to get there…

The 2000s and Beyond: The Internet, Millennials, and the New Performance Review

As the internet became something everyone could access, human communication evolved at a rapid pace and it still hasn’t slowed down. Email, instant chat, and employee portals introduced more engaging ways for professionals to interact and document their performance. Now, that engagement exists 24/7 with mobile phones. Technology has transformed performance management through employee evaluation software, online 360-degree reviews, and even employee happiness apps.

Millennials are quickly dominating the workforce, making their needs and desires in the workplace a priority for employers. As the emphasis on transparency and leadership increases, performance management practices are changing too. For example, the use of performance appraisal software allows companies to be transparent about their goals and how they relate to employee performance. It’s also a place where teams can see what their colleagues are working towards and how projects fit together to meet organizational goals.

Performance appraisal methods have made a lot of headway since the 1980s. No doubt, technology will continue to impact how performance management is carried out. Ironically, amidst all the tech advances and data driving these changes, employees today want more than ever to forge trusting and lasting relationships with their employer.

Want to keep up with the times? Try a demo of our employee evaluation software today and see what your employees are really made of.