Getting performance management (PM) right is critical to strategic execution in rapidly evolving business environments characterized by fast-moving markets, converging industries, increasing talent scarcity, growing dependence on contingent workers, and shifting labor preferences. But the pressure on PM is not simply a by-product of these trends: it is also an acknowledgment that next-generation performance management will be needed to deliver on digital transformation’s promise.
Performance management might be a late arrival to digital transformation, but as our research demonstrates, it is now poised to make radical use of new technologies. Technology-driven performance management already features apps for reading a team’s emotional engagement or predicting which high performers are preparing to leave an organization. For leaders, understanding and embracing the technology-based future of PM is essential to executing and leading digital transformation.