Performance Management in the Gig Economy

We see big changes ahead in performance management. Organizations like GE and Accenture are experimenting with new approaches to that old shibboleth: the annual performance review. And far-thinking companies are replacing the annual rating and ranking process with more-timely capture of critical incidents and authentic spot feedback.

But one important and growing population in organizations isn't benefiting from this feedback renaissance. They're the external professionals your organization increasingly counts on: freelancers, gigsters, advisers, and consultants, the people we call agile talent in our new book. In our research, performance management is the weakest link in managing and engaging agile talent and in gaining the greatest productivity from your external talent investment.

According to Deloitte, external workers may represent 30% or more of your organizations' true workforce. Freelancers Union reports that as much as 40% of the U.S. workforce views themselves as freelancers. And our research found that over 50% of leaders fully expect agile talent to increase as a percentage of total employees. Why? Certainly, one goal is cost efficiency. But the more important drivers are speed, flexibility, and innovation.

Most organizations, however, are not set up to benefit from their increased investment in agile talent. Research by PMI describes most problems in project performance as being the result of alignment issues. Our findings concur. And the alignment gap is greatest when it comes to performance management.

What can we do to close the performance alignment gap? Our research suggests six important steps:

Share context

Too often agile talent reports that they are excluded from critical meetings and discussions that would provide helpful - and sometimes essential - context for their work. Our data show that both agile talent and their client organizations miss critical opportunities to provide a thorough orientation to the work and its importance.

Measure more than cost, schedule, and quality

Defining the usual measures isn't enough. Agile talent wants to know the nuances, and they're particularly concerned that issues like cultural fit or other "soft" factors are often left unsaid or undefined until problems arise, creating additional cost or difficulty and enabling preventable conflict with internal colleagues.

Encourage agile talent to communicate concerns before problems bloom

To resolve problems before they affect a project, organizational leaders must sincerely encourage agile talent to communicate concerns. Our interviews reinforce the importance of regular review and a well-defined agenda for review. Rapport, the secret sauce of open discussion, blooms when agile talent is regularly invited and expected to honestly discuss potential problems.

Demonstrate two-way feedback

But encouragement isn't enough. When we ask agile talent whether their client organizations really want feedback, we often see more teeth-gnashing than affirmation. We learned that boundaries are important in two-way feedback - for example, "We talk about issues, not individuals," or what some people call the "no gossip" rule.

Make sure the right managers are supervising your agile talent

Is your organization assigning the right professionals and managers to supervise agile talent and their work? We heard time and again from external experts about the importance of both a performance and a developmental mind-set. Managers who are performance-oriented but not developmental may assess well but not provide effective feedback and coaching. Managers who focus on development more than performance may miss when it comes to frank, tough assessments. Good managers of agile talent - just like good managers of FTEs - do both.

Acknowledge excellence and share the news

Finally, agile talent is just as motivated by appreciation and recognition as your full-time employees - more so, in fact, given that client satisfaction is the basis for their career success. Whether through something as simple as public praise or as personal as sending a dozen flowers and a handwritten letter, reinforce with acknowledgement and thanks. And let colleagues know.

Agile talent is growing and here to stay, and organizational leaders are increasingly turning to external experts to provide the speed, flexibility, and innovation they need and to more cost-effectively plan initiatives. But organizations will only gain the full benefits they seek if they recognize that their agile talent needs strong performance management support too.

Jon Younger and Norm Smallwood, Harward Business Review

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IMD World Talent Report: "Slovenia ranks 38th overall"
 
The IMD World Competitiveness Center releases the World Talent Report annually. The report includes a talent ranking for all countries that are part of the IMD World Competitiveness Yearbook (61 countries as of 2015). The data is gathered from the Center's extensive database, which encompasses 20 years of competitiveness-related data. All data employed in the development of the report can be accessed through the World Competitiveness website.

The report assesses countries in three aggregated factors - investment/development, appeal and readiness - which in turn are derived from a much broader range of indicators. These include education, apprenticeship, employee training, brain-drain, cost of living, worker motivation, quality of life, language skills, remuneration and tax rates.

In the latest report, Switzerland leads the way in meeting corporate needs through developing, attracting and retaining talent. The report ranks Denmark second and Luxembourg third, with Norway, the Netherlands, Finland, Germany, Canada, Belgium and Singapore completing the top 10. Several major economies fare less impressively with the US languishing in 14th place, the UK 21st, France 27th and Mainland China well behind at 40th.

Europe emerges as a major source of, and a magnet for, business talent with eight countries in the top 10, followed by Sweden 11th, Ireland 16th and Iceland 17th. Slovenia ranks 38th overall, reaching 24th in investment and development, 54th in appeal and 39th in readiness. Slovenia ranks seventh in public expenditure on education (per pupil, secondary school), eleventh in total public expenditure on education as a percentage of GDP and fifteenth in the cost of living index. Conversely, Slovenia's lowest ranking indicators relate to attracting foreign highly-skilled staff (59th), implementation of apprenticeship (58th) and level of workers' motivation (55th).

The report  indicates that the key attribute among all the countries that rank highly is agility. This is shown in their capacity to adopt and shape policies that preserve their talent pipeline, which in turn makes them, as the report describes, "talent-competitive." These countries consistently achieve a positive balance between encouraging local talent and tapping into top talent from other countries. To put it differently, only agile countries can truly sustain their talent pipeline by constantly updating and refining the required competencies in response to economic, socio-political and other issues.

Dr José Caballero, Senior Economist, IMD World Competitiveness Center

Full report available at: www.imd.org/talent-report

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In June, Slovenia will have detailed and internationally comparable data on a range of skills

Slovenia was hit hard by the global financial crisis but the country is now showing clear signs of recovery. However, sustainable and inclusive growth will depend upon ensuring that Slovenians have the right skills and are active in the labour market and society, and use their skills effectively in modern workplaces. 

Skills are not the same as qualifications. More young people complete upper secondary school in Slovenia than in almost any other OECD country and yet Slovenian students have among the lowest reading proficiency in the OECD. Skills reflect our cognitive abilities in literacy, numeracy, using technology and analytical reasoning, as well as our technical and professional competencies. But skills also capture how well we can collaborate, communicate and negotiate with others. 

There is a clear link between skills, economic prosperity and social cohesion. Adults with high literacy and numeracy proficiency enjoy higher employment rates and earnings than those with lower proficiency. The importance of skills is magnified by challenges such as long-term unemployment. Across the OECD, 35% of unemployed persons remain out of work for more than one year. In Slovenia, the rate is 55%. But skills don't just grow the economy. Adults with higher literacy and numeracy proficiency are more likely to report good health and high levels of trust, to volunteer, and feel like they have a say in democracy. 

Capturing the benefits of skills in Slovenia will require collaboration from all sections of society and a shared understanding of Slovenia's skill challenges and opportunities. Better information is also needed to design better skills policies. On 28 June, Slovenia will, for the first time, have detailed and internationally comparable data on a range of skills of its adult population from the Survey of Adult Skills (PIAAC). Building on that, Slovenia is embarking on a whole-of-government, multi-stakeholder National Skills Strategy project with the OECD to help identify the country's major skills challenges. By being strategic about skills, Slovenia is well placed to seize this unique opportunity to achieve its economic and social aspirations.

Andreas Schleicher, Director for Education and Skills, Organisation for Economic Co-operation and Development