5th July 2016
There is no question, the human being is programmed to evaluate. From the moment we wake up until it’s time to sleep, we are constantly making decisions and this logically spills over to the professional field as well.
The employee performance review has become a key issue for businesses today, but if we look back, just as the company has been evolving over the course of history, we see how performance review processes have also been transforming over the years. In the mid-nineteenth century, right at the peak of the industrial revolution, businessmen in those times were able to take a very simple measurement of the performance of the machinery they used, i.e., how many units were they able to produce per day using the technology at the time. However, when it came to measuring the productivity of their workers, these businessmen did not have the elements that allowed them to assess the performance of these workers.
The first review process ever conducted on record took place in the early nineteenth century in a textile factory located in New Lanark, Scotland. This was undertaken by the entrepreneur Robert Owen, one of the main drivers of the British labour movement.
The process consisted of measuring the daily performance of factory workers using a system whereby each worker was assigned a book in which their supervisors rated how well they did daily within sections classified by colours indicating performance levels.
Later in 1842 the US government through the Congress laid down a national law which obliged businesses to conduct annual performance reviews of their workers.
These early initiatives spurred the usage of performance evaluation techniques at the turn of the twentieth century and which became increasingly more advanced. Companies began to measure the competencies and skills required for certain jobs and also to quantitatively analyze the performance of their employees. Later that information would be used to make comparisons between different profiles and employee performances.
As of the second half of the twentieth century, in the so-called “Knowledge Society”, a term first coined by Peter Drucker, new challenges and major changes emerged in the business environment. The manual labour that epitomized the industrial revolution began to give way to knowledge work and consequently employee performance measurement became more complex.
To measure this new way of working several methods of evaluation emerged. Of these two prevailed: performance by competencies and performance by objectives. However, the problem with these processes was that both were based on a production model which was rooted in the industrial society in which they had first emerged. Talent management needs to address deeper and immaterial aspects, beyond the results-driven focus. Collaborative environments and career development opportunities, among others, are crucial for achieving the right level of engagement of an employee on the job. This in turn is crucial for achieving the organization’s objectives. In a new context, a simple and pleasant performance evaluation model that does not spur rejection and facilitates the learning and training processes needed for employees.
The use of hr technology can incorporate all of these aspects into performance review processes that are becoming more detailed and complex. In a globalized and increasingly changing world, these technology solutions make it possible, among others, to work online with employees around the world and to set up standard performance review processes. They also make it easier to identify high-potential professionals in order to further develop their skills to the company’s benefit. They also act as an “early warning” service for detecting risks of talent brain drain as well as possible conflicts.
To conclude, it is worth noting that after all these years continuous performance assessment still remains topical. This is perhaps because there is still no ideal model that reflects each employee’s performance. In today’s world, where man is no longer considered an irreplaceable part of a production chain, human capital has become crucial. The need to get to know and develop the talent in people is vital for companies and performance processes. To be effective, they must adjust to this new reality.