Contemporary performance management strategies gaining ground in the Baltic
4/24/2024
Irja Rae, Figure Baltic Advisory leading partner
In the rapidly evolving corporate landscape, the recent Contemporary Performance Management Practices 2023 survey, conducted last year, between July and September, offers a timely reflection on the current state and future directions of performance management within Baltic organizations.
Conducted in cooperation with Prof Dr. Isabella Grabner from Vienna University, Prof Dr. Aleksandra Klein from Vlerick Business School and our own Figure Baltic Advisory advisors, the research draws upon responses from 90 diverse organizations across Estonia, Latvia, and Lithuania, spanning more than 11 industries.
Key trends in global performance management
Globally, there's a shift towards more dynamic and inclusive performance management strategies. Traditional, evaluative practices are making way for approaches that emphasize employee-driven growth, continuous feedback, and empowerment. This evolution reflects a broader recognition of the need for performance management systems to support not just organizational objectives but also employee’s personal well-being and development.
Baltic organizations: a critical reflection
The survey reveals that Baltic organizations are at a crossroads, grappling with the transition from old-school performance practices to next-gen performance management. Over half of the surveyed firms still rely on forced distribution methods, a practice that, while time-proven, often introduces biases and can demotivate employees. However, there's a notable increase in the use of calibration committees and alternative raters, indicating a gradual embrace of more contemporary evaluation practices.
The drive towards a new work reality
The pandemic has undeniably accelerated changes in the work environment, highlighting the importance of flexibility, well-being, and the integration of remote work policies. Baltic companies have shown a commitment to adapting to this new reality, with a majority allowing remote work and being flexible with work hours. Plans for 2024 suggest an intent to further embrace data-driven performance evaluations and promote more frequent feedback and reviews, although more radical changes, like compressed workweeks, remain less common.
Addressing gender inequality
The survey also sheds light on gender inequality within the workplace, with a glass ceiling still evident in senior management and executive positions. While Baltic organizations have implemented policies aimed at empowering women and supporting gender equality, there's room for improvement, especially in closing the gender pay gap and ensuring equal opportunities for all.
Recommendations for Baltic companies
To remain competitive and responsive to both global trends and the expectations of their workforce, Baltic companies need to accelerate their adoption of contemporary performance management practices. This includes:
- Moving beyond traditional evaluation methods to more holistic and continuous feedback mechanisms.
- Embracing flexibility and well-being as core components of the work environment.
- Actively working to dismantle the "glass ceiling" and promote gender equality at all levels of the organization.
Conclusion
The Contemporary Performance Management Practices 2023 survey offers invaluable insights into the challenges and opportunities facing Baltic organizations. As these companies navigate the transition to more modern performance management systems, their success will depend on their ability to adapt, innovate, and foster an inclusive and empowering work environment.
In closing, let's heed the words of Will Rogers, an American cowboy, actor, and humourist whose witticisms captured the essence of early 20th-century American society: "The road to success is dotted with many tempting parking spaces." Rogers, who lived from 1879 to 1935, reminded us through his humour that while the world has and hasn't changed in the last 120 years, the journey toward progress always requires us to resist the comfort of complacency. As Baltic organizations navigate the ever-evolving landscape of performance management, embracing this spirit of continuous movement might just be the key to unlocking their full potential. Next survey will be conducted in 2025.