A Virtual Workforce: The Challenge of Performance Management

The number of self-employed people in the United States increased by 14 percent from 2001 to 2012, according to research by EMSI. Some of this increase can be attributed to mass layoffs stemming from the 2008 recession. In the wake of job loss, many people tried to go it on their own, setting up shop in their home to offer goods or services on a small scale.

While many of those entrepreneurial efforts did not pan out, these self-reliant go-getters offer a lower-cost option for hiring employers as virtual full-timers. With equipped home offices and a work-life balance discipline in place, it may be easier to hire experienced former self-employed workers to work offsite than it is to send employees home and hope they can maintain their level of productivity.

But with the new crop of virtual employees and expansive use of contractors comes a new challenge: How to manage performance in a way that is on par with onsite employees. Performance management is always a tough issue. Many believe that the traditional performance reviews and formal performance appraisal systems, which are often tied to compensation, contradict the values-based philosophy many companies have come to adopt.

In fact, because the performance review typically requires extensive completion of forms and face-to-face interviews, it does to some extent, refute the purpose of an offsite employee – who is expected to work more efficiently, less distracted by meetings and paperwork. And while on the surface it seems only fair that offsite employees should undergo the same rigorous performance review as someone in the same role onsite, consider that the scope of their job skills may be somewhat different.

For example, virtual work tends to require more independent thought and the willingness to take initiative. Someone who works internally, however, may be proficient at seeking out answers from co-workers and establishing collaborative relationships. The two may do the same job, but the skills they need may be different based on their location and resources. That's why it's important that performance management be flexible to help each of them specifically develop and hone the skills they need for their particular job performance.

Also consider any bias or prejudice an onsite manager may have toward virtual workers. Regardless of the relationship or productivity of a direct report, some people are born micro-managers. For a micro-manager, not having control and oversight over the day-to-day tasks of a virtual team of workers can create a conflict that may not exist with a more laissez-faire manager. With a virtual workforce, performance objectives need to be weighed more against deliverables than activities or attitude. In other words, you may not be able to judge if someone is a "hard worker," but you can measure if he is an effective worker.

When managing the job performance of mobile workers, developing a relationship can be even more important than with onsite workers – where interaction may be routine but it is at least persistent. When communicating with an offsite worker, it's not like you just call to shoot the breeze, the way you might stop by someone's desk to talk about last night's football game. It's important, therefore, to develop some form of informal dialogue when you do communicate – be it by email or phone.

Likewise, instead of more traditional performance management, you may wish to establish a less structured way of communicating with mobile employees about their performance goals and personal development plans. Bear in mind that, as with all direct reports, this may take on a different approach based on the personality and extent of your relationship with each virtual direct report to match his or her needs and preferences.

There is one caution, however, when it comes to managing workers in similar positions on and offsite. Be careful not to vary performance management standards and metrics in such a way that may be perceived as incongruent – leading to a potential legal situation. While your approach may alter, the measurements for performance should remain on equal footing.

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