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Engineering the Future: Linking Learning and Performance Management to Drive Business Outcomes

This article from LEO Learning’s Chief Strategy Officer, Piers Lea, originally appeared in Inside Learning Technologies e-Magazine, and looks at the link between performance management and learning. It makes the case for L&D and HR professionals to work together to close the skills gap and ensure that future workforces are hired, trained and developed for jobs that, in many cases, do not yet exist.

It’s the year 2030. The City of Boston is celebrating its 400th anniversary. Mickey Mouse is turning 100. The youngest Baby Boomers hit retirement age four years ago, though many are still working. The oldest Millennials have arrived at middle age. Gen Z is in its early 30s.

Decades of declining birth rates have resulted in a global talent shortage of more than 85 million people1. And artificial intelligence, automation, and digitization are fast-approaching the norm throughout the workplace—be it manufacturing floor, retail outlet, healthcare institution, financial firm and even government.

As a result (if experts at McKinsey are right2), some 375 million people are doing work that is markedly different from that of just 10 years ago. And if predictions made by the Institute for the Future3 come to fruition, 85% of the jobs your colleagues are doing didn’t even exist back then.

Now, rewind to “back then”… because back then is today.

With that perspective, it becomes immediately clear that companies face a monumental task to prepare workers for all this change, a task that will fall jointly to HR and L&D leaders. Together, these functions own the talent strategies it will take to build the 2030 workforce—that is, to prepare people for success in jobs we can’t yet name or describe.

If you’re feeling a bit woozy, it could be the after-effects of time travel, or you may be understandably intimidated by what seems a mammoth undertaking.

The Learning/Performance Connection

The good news—I always like to start with good news—is that executive support won’t be an obstacle. Leaders are well aware of both the problem and, in a broad sense, the solution. They’ve read the stats on the looming talent shortage and the aging population, and they’re embracing the need to identify and hire strong learners and to train up their workforce.

For large organizations, the L&D component of the solution has garnered a particularly keen focus. Notably, McKinsey found that 82% of executives at companies with annual revenues exceeding $100 million see reskilling as critical to business success in the next five years4.

The question is, how?

That is, how can companies ensure that investments in skills training will result in business success? How can they determine what training is needed, by which employees and when, for growth into what roles? And how can they drive and track it all?

The answer: Through performance management.

In the most basic sense, learning and performance management have always been linked—through goal setting, competencies, and development plans. And through training delivered and tracked within a modern LMS.

But for leaders seeking to prepare for the market realities of 2030, the link between these two talent strategies must extend beyond tracking the completion of learning to tracking its success.

Did the employee learn? And how will newly acquired skills contribute to the business—through innovation, sales, customer satisfaction, or some other outcome?

A 1000-word article can’t account for everything it will take to answer those questions. But it can shine a spotlight on three critical ways learning can inform performance and vice versa to help companies prepare employees for business and job realities on the horizon.

1. Transforming Performance Management through Learning

As the nature of work changes, so must approaches to performance management. Fueled by the need to constantly redefine roles and teams, by the shift toward continuous learning, and by rising employee expectations, the annual performance review is giving way to a modern process that Deloitte describes as “real-time, continuous, and multidirectional5.”

As with all organizational change, transforming performance management means employees must adopt new attitudes and behaviors. And that, as we in L&D know, takes learning.

LEO Learning supported just such an effort on behalf of a large and complex government agency in the UK. The agency wanted to shift away from an annual appraisal and forced ranking system to one focused on conversations. Doing so meant reaching diverse employees at all levels—including field staff whose jobs limit their access to computers—with training that would motivate behavior change and inspire cultural change.

This demanded a blended learning approach—including scenario-based eLearning, in-person workshops and coaching, video and animations, a paper-based toolkit, and other elements. The content was deliberately structured within the client’s learning platform, with a narrative overlay to support the learning journey.

As LEO Learning Consultant, Katherine Chapman, noted, “Transforming performance management is particularly challenging, as employees can be cynical. Effectively motivating behavior change means shifting employees away from negative perceptions and encouraging them to influence their own career development and adopt a growth mindset. It also means guiding line managers through difficult decisions so they can build confidence.”

2. Building Learning into Performance Management Systems

As L&D and HR tackle the task of developing the 2030 workforce, they will rely heavily on managers to lead the performance process—which calls for superior skills in goal-setting, motivating, and communicating.

But therein lies a problem:

  • In its State of the American Manager study6, Gallup found that more than 85% of managers need help setting work priorities and performance goals for employees.
  • Another Gallup survey7 found that only 20% of employees feel motivated through performance management to do outstanding work.
  • According to a Harris Poll survey8, 69% of managers are uncomfortable communicating with employees at all.

Given how busy managers tend to be, reaching them with training is no simple feat. According to recent research9, 59% spend more than 3 hours each day on administrative tasks and 44% frequently feel overwhelmed at work.

Not surprisingly, the best way to deliver training to managers is in the flow of work—right when they’re navigating the performance process and completing tasks within your performance management system.

Picture a manager assigning performance ratings and watching a short, scenario-based video on how to effectively deliver corrective feedback. Or inputting a development plan and accessing a clear list and definition of competencies needed for a future potential role.

Modern performance demands a modern performance management solution to facilitate this type of in-the-moment instruction for managers, and thereby optimize L&D efforts to build the 2030 workforce.

3. Making the Connection with Learning Analytics

Perhaps the most important connection between learning, performance, and business success is through learning analytics, an area pioneered by leaders like Watershed.

As a best practice, learning initiatives should start by defining desired business outcomes, then understanding how team and individual performance drive those outcomes. From there, learning plans are designed to improve performance.

With learning analytics, companies can explicitly connect learning to business outcomes, defining its impact in terms of meaningful metrics.

Let’s look at an example:

A manufacturing company seeks to increase efficiency across its supply chain, as measured by the number of rush orders. Through the performance management process, managers set relevant goals for supply chain team members, assign training to streamline their processes, and track performance subsequent to training. If rush orders drop, the learning was a success.

By setting a clear metric (number of rush orders) that speaks to a business goal (supply chain efficiency), the L&D team can work with managers (who lead the performance process) to deliver the right training to the right individuals.

In this way, they can bookend learning delivery with data that informs, and is informed by, performance management.

Welcome to the Future

Of course, none of this will be easy.

In most organizations, L&D and HR professionals function in relative isolation from each other, often without a voice in organizational planning.

By finding common ground within the performance management process, companies can engineer new approaches that are grounded in data-rich learning analytics to power their learning and talent strategies.

And that’s the key companies need to begin bridging the gap between the workforce they have today and the one they’ll need in just a few years’ time.

See you in 2030.

There’s more LEO Learning thought leadership in our Resources section. Access ebooks, white papers, webinar recordings, podcasts, infographics and more on a wide variety of learning-related subjects.

Additional sources:
  1. 1. Korn Ferry Institute (May 2018), ‘The $8.5 Trillion Talent Shortage’
  2. 2. McKinsey Global Institute (January 2018), ‘Retraining and reskilling workers in the age of automation’
  3. 3. Institute for the Future for Dell Technologies (2017), ‘The next era of human/machine partnerships: Emerging technologies’ impact on society & work in 2030
  4. 4. McKinsey Global Institute (January 2018), ‘Retraining and reskilling workers in the age of automation’
  5. 5. Deloitte Insights (February 2017), ‘Performance management: Playing a winning hand 2017 Global Human Capital Trends’
  6. 6. Gallup (April 2015), ‘Employees Want a Lot More From Their Managers’
  7. 7. Gallup, ‘Re-Engineering Performance Management’
  8. 8. Interact Authentically (February 2015), ‘New Interact Report: Many Leaders Shrink from Straight Talk with Employees’
  9. 9. West Monroe Partners (March 2018), ‘Companies Are Overlooking a Primary Area for Growth and Efficiency: Their Managers’

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