This content is part of the Essential Guide: Making the shift to continuous performance management

Performance management tool wires work at Schneider Electric

Schneider Electric uses BetterWorks, and Appster taps 7Geese to align goals of employees and executives and to help make the organizations more open and agile.

When Schneider Electric, a giant 180-year-old French company, sought ways to become more collaborative and to align employees with overall company strategy, it began using a performance management tool.

The company, a global specialist in energy management and automation based in Rueil-Malmaison, last year started using BetterWorks to encourage employees to achieve goals. Currently, 700 to 800 employees in the IT department use the software to set goals, and some are encouraging each other with "nudges" and "cheers" as they make progress, said Harini Sundaram, vice president of strategic programs at Schneider. Further plans call for expanding use to other employees.

Similarly, Appster, a five-year-old app development company, is using the 7Geese performance management tool. Like BetterWorks, 7Geese is grounded in objectives and key results, or OKRs, a technique that started at Intel and later moved to Google. BetterWorks and 7Geese are among newer tools that support continuous performance management. Forrester Research reported on this trend in a recent report.

Executives at Schneider and Appster said the performance management software helps their companies be more open and agile. Employees can view a Dashboard to see and track the goals of each other and managers. "Each person knows what the other is working on and how they can work together and not duplicate work," Sundaram said.

Use of the performance management tools has not eliminated annual performance reviews. For Schneider Electric, annual reviews are not connected to BetterWorks, but Appster said it takes completion of OKRs into consideration for annual performance reviews. Appster also recently began monthly "flash reviews" for all employees (see the sidebar "Employees face flash reviews at Appster").

Tools could foster group think

But at least one critic is concerned the software could discourage independent thinking and create an obsession with performance metrics that gets in the way of good work.

"It's very easy to imagine a situation where it becomes an arms race where essentially employees feel they need to compete for nudges rather than get the job done," said Frank Pasquale, professor of law at the University of Maryland, Francis King Carey School of Law. Pasquale specializes in law and technology.

Pasquale said a performance management tool might help build teams and provide ways to recognize people, but it also could accelerate "group think," where employees believe they need to act in the same way.

Schneider Electric uses BetterWorks primarily to align the goals of employees with a company-wide program centered on innovation, improving the skills of employees and doing more for customers, Sundaram said. Teams establish three to five objectives and associated results aimed at achieving those objectives. "BetterWorks is a strong enabler in aligning to the top-level strategy and executing those objectives," she said.

A nudge could push laggards

While they work on goals, employees give each other a nudge or cheer, a Facebook-like measure inside BetterWorks. "A cheer happens a lot," Sundaram said. "It's mainly to communicate a feeling of more comradery and collaborating while working."

A nudge sends a message about a goal that might be lagging, she said. A nudge means, "Please do it because you are affecting my key result, which in turn can affect everyone else. Nudging happens."

She said BetterWorks is not for micromanagement. "It's not a tool to see what a person is doing eight hours in the office. This is quite clear."

Employees face flash reviews at Appster

An app developer is taking a new approach to improving employee performance.

Three months ago, Appster began monthly "flash reviews" of the performance of its 380 employees. The 15-minute rapid feedback sessions are conducted with a score card on Google Sheets.

Josiah Humphrey, co-founder and co-CEO of Appster, and Robert Kazmi, vice president of sales, said the flash reviews are aimed at shaking up performance management and keeping employees focused on innovation and new ideas.

The market for app development and other industries is changing quickly and demanding that workers keep pace, they said. Appster uses the reviews to assure workers are moving the needle in their specific job functions. "We can change, mull, reshape and drive the behavior we need in a very short timeframe," Kazmi said.

Employees are scored on each of four main objectives. Scores include a plus for exceeds expectations; a zero, meets expectations; a minus, needs improvement.

For example, a sales representative could be scored on quota attainment, pipeline management, attitude and handling objections. The flash reviews also provide more data for annual reviews, which are used partly for determining salary or bonuses, Kazmi said.

Performance management tool speeds progress on goals

At Appster, some employees might find it cumbersome to check in on 7Geese and stay updated, but they also find it is an effective way to track their objectives and results in a given quarter and link them to the organization's objectives, said Josiah Humphrey, co-founder and co-CEO of  Appster.

The performance management tool moves the organization forward at a much faster rate. "We are getting a lot more progress on the things we want to fix and achieve," Humphrey said.  "It's been great in that regard."

Inside 7Geese, company goals are aligned with objectives and results for teams, managers and employees. To keep people focused and more effective, a rule of thumb is to set only three to five OKRs, Humphrey said.

"With 7Geese, anyone in the company can look at anyone else's OKRs," he said. "Anyone can look at my profile and see exactly what I am working on in a given quarter."

Cool, transparent way to track things

7Geese also provides visuals to show progress at Appster, which has offices in Australia, India and San Francisco. Humphrey said that if he sets an objective to raise a new line of revenue, with a result of $100,000, for example, employees can follow his progress via a bar graph or icon.

"It is a good way to keep everyone updated with what everyone else is working on," he said. "You can check in on different objectives or it gives you reminders by email. It's a cool, transparent way to track things."

Humphrey is "not at all" concerned about collecting too much data or flooding people with too much information. People run their companies in different ways, but for Appster, the more the company tracks, the more everyone is aligned, which is critical for success, he said.

Since starting 7Geese 18 months ago, the company is much more effective at connecting company objectives to all employees, Humphrey said. "7Geese has been awesome for us. We will continue to use it unless something better comes along."

An expert on employment issues, Lew Maltby, president of the National Workrights Institute, said continuous performance management offers potential advantages and could be a big step forward. He said annual performance reviews come too late and often provide "vague generalities" that are not much help.

"The real question for employers is, 'How much more information about employees' performance do they want?'" Maltby said. "And how much time do they want employees to spend reporting to them? Unless employers create some sort of guidelines, they will probably be flooded with more information than they can even think about."

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