Continuous performance management is a modern framework to measure and manage people performance throughout the year at frequent intervals as opposed to an Annual or Bi-annual review.

What is continuous performance management?

It is a throughout the year ongoing process with emphasis on authentic and natural collaboration. The framework involves long-term goal planning using (OKR) methodology and periodic questionnaires that can be sent to gauge everyday sentiments of the people. Employees and managers give each other regular feedback, sort out discrepancies in separate one-on-one meetings while also praising each other for a job well done. The idea is to nurture an environment where collaboration, trust, and harmony drive the company growth with a strong sense of organizational culture and values. 

What is continuous performance improvement? 

When we are talking about performance management, we're addressing a set of scalable and repeatable processes that can be repeated to yield better performance. When we talk about performance improvement, we're discussing a much more fundamental pain of employee' not performing to their potential. It is about getting into a mindset that drives everyone in the company to keep growing and succeeding to get better every day. However, this is much easier said than done for real improvements are never a jump from one point to another but a systematic effort with continuous persistence which would yield micro improvements that one day results in performance improvement.

What is the meaning of performance management?

Performance management practices are defined as continuous communication between an employee and their leader to ensure they achieve the overall long-term and short-term objectives of their organization. It includes setting clear goals, providing clarity of expected results, providing feedback, and evaluating results.

Monitoring performance and giving feedback are not two separate activities as in the case of an Annual Review. In this process, everything is measured continuously with context, like a continuous cycle, with conversations changing as and when objectives differ.

The ongoing cycle has three components — planning, check-ins, and evaluations or reviews.

During the planning process, clear goals are set between the manager and the employee, which they both agree upon. Then an execution plan is drafted tied to specific milestones that indicate progress. 

Objectives are discussed year-round through frequent one-on-one conversations. This practice provides a common framework for everyone to succeed by leveraging mentorship and honest feedback.

At the end of a pre-determined timeline, the manager reviews the report's performance against expected results, while also taking into account all the factors that influenced the current outcome. Together, the manager and employee collaborate to repeat the process for the next cycle of a pre-determined timeline ( usually a quarter to a year) 

How can performance management system be improved?

Move away from traditional annual-review process and shift to continuous performance practices. Millennial employees are the largest demography of the workforce, and they desire quick feedback and mentoring to help them succeed. These employees have precise needs and vision for their lives and are willing to go above and beyond for employers who make them a part of their vision by engaging them in frequent communication.

Reward your best performers 

Modern-day employee recognition is no more about just monetary incentives. People need to be shown that their contributions are both acknowledged and valued by their employers. One easy way to do it is by providing them with a non-monetary incentive such as a rotating shield or a leader board.

Make performance management an opportunity for performance coaching

Performance management is about mutual give and takes between the employee and management. Your employee performance improves when you regularly engage with them on their plans and progress. By utilizing performance management as an opportunity to provide value, you will get multifold returns.

Provide employees with constructive reinforcement

To help people grow and succeed, they need to know where they stand. Nothing improves growth and performance over honest and critical feedback. By enhancing a culture of open criticism, your people become more driven and accountable. 

Schedule Regular Performance Check-Ins

When employee sentiments are heard regularly, it gives you actionable insights to make things better for your business and your people. By providing periodic questionnaires that address their common queries and issues, you can quickly make necessary policy and management changes that help improve performance.

Provide ample opportunities for learning and development

Upskilling is one of the primary requirement for modern employees. If you assure your people that you want to enrich their skills and provide them with regular learning opportunities, it not only improves their knowledge span but also gives them scope to assume greater responsibilities within the organization. 

 Provide feedback effectively

In modern organization, positive appreciation comes naturally for most people; however, the negative criticism that's equally important goes mostly unaddressed. Doing this could be due to a  myriad of factors that influence them, such as common courtesy or societal niceties and the unspoken convention not to hurt people's sentiment or ego. Using anonymous feedback or implementing a culture of honesty can quickly help you start running towards a high-performance fueled growth.

What are some definite advantages of doing periodic check-ins?

Doing periodic check-ins enables organizations to gauge the daily and weekly sentiment of all their employees. It not only helps managers understand the overall plans, progress, or problems of all their employee but also gives them actionable insights on how to go ahead and solve them. Outcomes are often tied to the right action at the right time. Regular check-ins will nurture a culture of open communication and publicly shared check-ins will help everyone take part in a transparent organizational culture. 

Why should I adopt Continuous Performance Management now?

With the advent of millennials workforce, many growth-oriented businesses are already seeing great results implementing it as a part of their practices. This underserved SMEs have the maximum potential for high-velocity growth. The earlier you start, the faster you get to optimize your processes and gain a foothold ahead of your future competitors.

Who has adopted it thus far?

The framework, ever since it's popularity as a much leaner and agile alternative to annual performance reviews, has fueled the growth of many modern organizations from nimble startups to large companies. It, along with OKRs, was the secret sauce of growth behind Google, Uber, LinkedIn, and the Likes.

Benefits of continuous performance management

Nowadays, modern organizations function as a single unit, where employees have a strategic expectation of their career and knowledge accrued. These businesses now have the need to align objectives, provide feedback, and invest in performance improvement that is throughout the year while being flexible enough to adapt to dynamic changes. 

Continuous performance management is now garnering much attention as:

The workforce is now distributed - The idea of remote work has picked up much traction, and there are now companies that have a truly global workforce. With such distributed teams all over the world, managing and coaching for performance become hard without a straightforward framework that is repeatable across all employees. 

Different demography of modern workforce - Modern workplaces host employees from at least five different generations, this wide range of employees have to be managed, aligned, mentored and coached with all their similarities and differences taken into account. Organizations can no longer afford to take a lackadaisical approach with a blanket policy.

Cloud and SaaS advantage - with the advent of cloud-based software to easily monitor, record, and improve employee performance through feedback and recognition. It has become much easier to shift to modern continuous performance frameworks from old and hard to lose legacy systems. 

Modern workers want more - People from the millennial and gen Z generation are no longer motivated by a paycheck alone. They seek a higher purpose, a mission that they've taken upon to achieve and are actively working towards. They expect the organization to also invest in their dream by providing them with everyday decision making autonomy, regular criticism to improve their work, and mentorship to help them achieve their goal.

This change in the paradigm has paved the way for the success of continuous performance management practices. People officers get to set agile objectives and help people through personal feedback and also help them succeed. When all these are done throughout the year, this also makes employee performance soar.  

What are some common impediments for companies to adopt the CPM framework?

  • A large number of big enterprises are still tied to legacy systems due to various factors.
  • Some enterprises want to keep their data safe and in house, and hence they don't trust their employee data being held in a third party software.
  • Some HR dinosaurs are still living in the pager era and hence are stubbornly averse to change as it translates into more work for them.
  • Lack of proper tools that address a largely underserved SMB market. Upfront Annual contract lockdown demanded by most enterprise tools.
  • The problem of adoption from the employee side, and the leaders not wanting to come across as dictators by "enforcing" a performance software.
  • Lack of education on the reliability of continuous performance management framework. Lack of Knowledge about many practical examples which are success stories.

Are Annu­al Per­for­mance Reviews sill viable?

Any change in a complex management process needs to be rolled out slowly. However, Annual performance practices have been revoked by many of the major organizations like Deloitte, PWC, Oracle, and more. Google has been using OKRs ever since 1999 and has shot to a rocket ship growth. Annual reviews have proven to be mostly detrimental towards company growth as they bring in Bell Curve comparison and other forcible segmentations, which ultimately lead to talent attrition. 

The significant impact of the bell curve was most prominent in employee  Performance ratings. The entire organization is divided into swaths of High, medium, and underperformers. This voluntary subjection to a group removes the incentive for the slow ones to grow while also bringing in a glass ceiling for the hyper performers to push harder. With continuous performance practices, performance rating is now holistic and rewarding that helps modern organizations genuinely help their people succeed.

How to implement continuous performance management? 

Implementing performance management is a continuous process, and it cannot be subjected to an instant change. For a large organization that's currently using annual performance reviews, they need to start educating the importance of OKRs within the team-members and get buy-in from the leadership. However, in case of a growing SMB business, all you need is one quarter to set up and experiment with the OKR process and quickly scale it across the company once your team has integrated it into their workflows.

What constitutes the continuous performance model?

The Continuous Performance model includes

 

Objectives and Key Results - Come up with quarterly or annual goals with your teams, and assign milestones to help them evaluate their progress. 

Check-ins - Send periodic questionnaires that help gauge daily or weekly employee sentiments

One-on-Ones - Have meaningful conversations with employees that benefit both them and your organization to succeed over the long term.

Feedback - Develop a culture of honesty which does not shy away from constructive criticism. 

Recognition - Celebrate every kind of victory through non-monetary incentives such as badges and medals. 

Employee Engagement - Run company-wide surveys that seek employee opinion on management measures and take action based on the responses.

360 Performance Reviews - Conduct year-round employee performance review, and evaluate performance with context, awareness, and the employee attitude demonstrated based on their check-ins and one-on-ones.

What are some of the best practices in continuous performance management? 

  1. Have 360 feedback
  2. Align goals regularly 
  3. Provide upskilling and growth opportunities 
  4. Have regular conversations with your people 
  5. Provide non-monetary incentives
  6. Limit to 3-5 key-results per objective
  7. Ask and provide feedback

What is continuous performance management software? 

A performance management software will provide you the tools that you need to engage with your employees daily. Through an intuitive performance management solution, you'll be able to set goals, provide regular feedback, schedule one-on-one conversations, and celebrate your success in one single place. Selecting a software solution that's the best fit for your team may come across as a challenge, it needs to solve all your current business cases while also being flexible enough to adapt to different process changes. Ensure you do enough research or opt for a free trial before you start paying for the solution.

Upshotly is continuous performance management software that helps small and medium business leaders mentor, manage and align their workforce to get the best out of their teams, every day.