Willis Towers Watson,

stakeholders, can prove more valuable in that managers have more context into the employee’s relationships. This performance assessment system works in a continuous loop, allowing managers and employees to identify and address any goals or objectives that need to change in real time. Rather than sticking to a rigid list of goals that do not take into account ever-changing business priorities, we strongly believe that this model will likely inspire employees as well. They will have a greater understanding as to how their contribution impacts the overall team on a day-to-day basis, as well as the overall vision of the company. They will be able to escalate and resolve problems faster, leading to greater efficiency. Such a model could also have impact up the ranks, in that senior leaders can have more visibility to what is happening on the ground.

To facilitate discussions around calibration across teams, companies could simply look at performance based on impact. Because you are not restricting ratings based on a percentage of a population, the model would allow companies to allocate employees closer to their actual performance. This could yield some interesting insights into how managers evaluate performance. If the restrictive measuring is removed, managers are free to appraise based on their own standards of generosity or strictness; and direct linkages back to company performance can then be ascertained.

The correlation between performance ratings and compensation outcomes are woven into the fabric of conventional ratings-based models in that companies often use performance ratings to explain and justify bonus outcomes and salary increases.

In an impact model, where performance is based on individual contributions, reward outcomes would be less restrictive (i.e., not driven by ranges associated with each performance rating). This could be particularly relevant for executive populations, where achievement against individual scorecards would determine bonus outcomes. Companies may still continue with current funding approaches based on bonus pools, however the distributions to individuals in executive positions would be fine-tuned based on direct knowledge of impact, rather than a numerical indication of value.

The time for advancements in technology to apply to performance management systems has arrived. Companies in the new economy are likely to make use of blockchain technology (a more connected system of collecting data across segments), peer-to-peer platforms, and real time data to make informed people decisions. Using

blockchain technology, companies will have the ability to build reputation systems, dispute and resolution forms, governance structures, and more. Such systems will likely have the most profound implications on performance management, performance assessment, and even determination of pay, going forward.