“Art is the tree of life, science the tree of death” is a phrase credited to William Blake. This was an apparent protest to the way science was taking over the arts and humanities in the realm of academia. Our very own President has echoed his sentiments on this subject, going as far as to declare that science teachers should be paid more than their counterparts in the arts, given the potential value they bring to society. The fashionable emphasis on Science, Technology, Engineering and Mathematics (STEMS) careers has ingrained in us a notion that great technology is the answer to advancing business and societal objectives. That said, when our progress is met with obstacles, we quickly remind ourselves that “culture eats strategy for breakfast”. Is it perhaps a good time to pause and consider that “culture may also eat technology for lunch?”
The digital revolution has swept through workplaces, transforming how we work, including performance management. While emerging technologies like Artificial Intelligence (AI) and cloud platforms offer undeniable advantages (89% of HR leaders believe AI will be crucial for their future success, according to Deloitte), some companies have strayed too far in their pursuit of efficiency, neglecting the irreplaceable human element. In this article, we make the argument that a balanced approach is important (if not critical) in the quest for great business results. We should look to harness technology's power while cherishing the value of human interaction.
Technology acts as a powerful tool for streamlining performance management. As Laszlo Bock, former head of People Operations at Google, emphasizes, data is key to understanding your workforce and making better decisions, but it shouldn't operate in isolation. AI allows organizations to delve into vast employee datasets, uncovering trends and patterns that empower proactive measures and tailored interventions. Think Netflix, where AI algorithms revolutionized content recommendations, leading to a 20% surge in customer engagement.
Cloud-based platforms further enhance performance management, particularly for geographically dispersed teams. These platforms provide unparalleled accessibility and consistency, ensuring fair performance evaluations across locations. Moreover, the automation of mundane administrative tasks frees up valuable time for HR professionals, allowing them to focus on invaluable aspects like coaching and mentorship. This aligns with HR authority Dave Ulrich's advice on HR evolving beyond merely enhancing existing practices but reinventing them altogether.
However, technology can't replace the power of human interaction. Patty McCord, former Chief Talent Officer at Netflix, reminds us that the quality of the conversation matters most, not the technology facilitating it. Personalized feedback delivered through regular dialogues and face-to-face interactions remains crucial for employee engagement and motivation.
Between 1986 and 2015 (29 years), the National Social Security Fund (NSSF or the Fund) grew its assets to UGX 5.5 trillion. Between 2015 and 2024 (9 years), the Fund grew to UGX 21 trillion (4x faster than the previous period). Several factors can and are attributed to this commendable performance and not one or two. Technology no doubt played an important role. We broadly define performance management as “tools, practices, and processes that help managers monitor and evaluate employees’ work and align it with the company's goals”. Based on this context, technology plays a very influential role in performance management today: scheduling and distributing work, enabling the exchange of information seamlessly, communicating performance metrics for better decision-making via stylish dashboards and automating routine workflows that ensure managers focus more on value-adding activities. This trend has not escaped the Fund. Indeed, the evidence is extremely visible as one peers through the work aisles and cubicles which are completely bereft of paper (the Fund operates a 100% paperless environment having automated the entire workflow of customer and staff tasks). Innovation has no doubt played an important role in the Fund’s transformation and we often default to the STEMS when we refer to innovation. But when we unpeel the onion, we find that in most high-performance organizations, not just the Fund, human behaviour (culture) is what made the big difference. And it is down to very simple but crucial human interactions - prioritizing regular in-person meetings over Zoom meetings, for example, has proved to be more effective in fostering a sense of community and building strong working relationships. This has been validated across several industries and is well-exemplified by Zappos' unique "Holacracy" management structure.
Mentorship and coaching also remain irreplaceable. While AI-driven tools offer valuable insights, they cannot replace the wisdom and experience imparted by seasoned employees. Nurturing a culture that encourages mentorship, like Toyota's approach to developing future leaders, enriches organizational knowledge and perpetuates a legacy of innovation.
The Fund’s “Balanced Scorecard” application demonstrates how to integrate technology with critical human elements of performance management successfully. Central to the technology contribution is their bespoke software platform on which Balanced Scorecard is designed. It is uniquely enhanced by AI and data analytics tools to identify opportunities for improving performance and aligning efforts with priorities. This notwithstanding, NSSF recognized that technology alone would be insufficient. What makes the biggest difference is how teams interact and how managers manage. To start with, the culture goes to great lengths to collapse the hierarchy in a bid to promote communication. The Managing Director is known as just “Patrick” to everybody, and anyone can go to his office at any time to discuss a problem or solution. The Human Resource department is called “People & Culture” not for fashionable reasons but to signal that their main objective is to shape culture in line with the performance objectives. For instance, one of their guiding principles is to encourage performance conversations via face-to-face interactions and regular dialogues for personalized feedback and support. One of the hardest initiatives to address in performance conversations is feedback about oneself. The Fund has been quite bold in democratizing 360-degree feedback to ensure performance insights from supervisors, peers, subordinates, and even external stakeholders drive a culture of excellence.
Through a unique blend of technology, clarity of objectives, and a performance-driven culture, the Fund links results with its performance management system. The results over time seem to validate the system and the Fund is now on track to meet its strategic goal of UGX 20 Tr in Assets under Management (AUM), one full year ahead of the 10-year goal[1].
Figure: Individual staff performance vs Fund financial performance
The link between technology and performance is subtle and full of nuances.
In the Fund's case, technology helped establish credible and objective performance metrics and targets but also reduced bias in evaluations. But the culture of accountability for performance – which is inherent in the scorecard design, seems to be what has tipped the scale. The performance-driven culture is reflected in the remuneration structure where 30% of total reward is strictly based on the results one delivers based on their performance contract.
By skillfully integrating technology with a performance-driven culture, organizations can create a performance management ecosystem that cultivates individual and organizational growth while championing principles of fairness, transparency, and employee satisfaction. Striking the right balance between these elements will be instrumental in their success as they navigate the ever-evolving digital landscape. This comprehensive approach will pave the way for a future of performance management that transcends conventional boundaries, enriching both the organization and its workforce.
William LUTAAYA, Research and Insights Specialist
[1] In 2015, the Fund was UGX 5.5Tr in AUM and set out to achieve an AUM of UGX 20Tr by 2025. It achieved this target in February 2024.