What it is:
Performance management is how organizations assess and improve employee performance. Traditional performance management relied on annual reviews with a list of things employees needed to improve before they could go up a rung on the corporate ladder. This type of performance management leads to only 60% of employees who feel their performance is fairly assessed at their organization, and over 50% wishing they could have more conversations with their leader about their development.
Today modern organizations are switching to more continuous, personalized performance management. While the annual performance review is not dead, it’s being supplemented with other methods of performance management: quarterly reviews, one-on-ones with leaders, peer one-to-ones, and daily conversations. Annual reviews can feel too generic and impersonal. Talking about performance only annually is an ineffective way of assessing that entire year’s performance.
Instead, these ongoing methods of performance management can feel more personal and meaningful. They provide more up-to-date feedback and present current opportunities for development.
A holistic performance management practice provides mentorship and coaching in addition to assessment. It allows leaders to give resources and appreciation in real-time, and provides ongoing opportunities for development.
“We have them monthly just because the work we do is quite stressful. I find that if you don’t have them regularly, you’ll find that you have more problems. Sometimes, when it has been three months, morale in the team goes down. One-to-ones help address issues as we go along, not wait 12 months.”
How it impacts culture:
Receiving frequent performance assessments is important to helping employees feel successful at work. Research shows:
• When leaders provided two methods of performance management instead of only one, they saw a 44% increase in employee perception of success.
• When three methods of performance management were used, there was a 104% increase in perceived success.
• When only one method of performance management was used, there was a decrease in perceived success.
Continuous performance management also has an impact on the essential elements of workplace culture in addition to success.
When employees have regular one-to-one conversations along with more formal reviews, they feel more connected to a purpose, are presented with more opportunities for growth and development, feel more appreciated, and have a more positive perception of wellbeing, success, and leadership at their organizations.
How to do it well:
Ongoing conversations about employee performance should be frequent and personal:
1) Utilize multiple methods of performance management. This can include annual reviews, but should also include quarterly reviews, frequent one-on-one meetings with leaders, and daily conversations.
2) One-to-one meetings should be informal and co-created. One-to-ones shouldn’t feel too formal or structured, but instead be a natural conversation. Both the leader and employee should have input into what is discussed and prepare for them.
3) Peer-to-peers are another way of providing ongoing feedback to employees about their performance. They are one-to-one conversations between colleagues that are not overly critical but allow peers to give feedback and suggestions to improve. Peer-to-peers, when done informally in a psychologically safe environment, can deepen the connection between team members and help employees grow and develop.
Find out how you can future-proof your performance management program.
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