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Transparency, empowerment and feedback will flourish. Highly visible formal programs to enhance continual information-sharing loops and cybernetic feedback seem to be the trend for performance management success. All the latest academic research by Ledford et al and practical findings by Microsoft prove those elements most essential for desired outcomes.

Note the Nobel Prize announcement today re the Harvard/MIT economics profs Hart and Holstrom for their work on Contract Theory. Pay and incentive planning and design hinge on that. It also confirms that, "incentives matter." While they may have nailed the predicable rational economic utility formulae, the future action should concentrate on irrational economic decisions per Prof Dan Ariely. Cuz us human beans are emotional animals rather than identically programmed robots...

Millenials will drive the continuous feedback model rather than one annual performance evaluation.

Compensation will separate further from that one annual rating.

Hopefully variable pay will follow for most positions which should cover the incentive rewards piece better than an annual increase.

Performance management is an area of HR management that has been subject to the introduction of fads for many years. The condition has existed since the 1970s, and follows an identifiable evolution. A new idea is widely praised, then used and caste aside, and is subsequently replaced by another widely-hyped idea. In recent times, 360 appraisal systems, the balanced scorecard approach to appraising employees, and forced ranking systems have exhibited characteristics of this pattern.

WorldatWork member surveys show the following recent usage history of companies that assess performance, but do not have an overall score.

2010 – 14%
2012 – 11%
2014 – 9%

Not exactly taking the HR field by storm, contrary to all the hype, IMHO.

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