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Performance Management in the Gig Economy

Jon YoungerNorm Smallwood

January 11, 2016

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 is Managing Partner of the Agile Talent Collaborative and the

author of several books in HR and talent management, including Agile Talent

(HBR Press, 2016).

Norm Smallwood is co-founder of The RBL Group, a strategic HR and leadership

systems advisory firm, and the coauthor of several books including Agile Talent

(HBR Press, 2016). He is a partner in the Agile Talent Collaborative.