6 Best Practices for Modern Employee Performance Management

Is your performance management program really moving the needle on employee performance? Research shows that many organizations (more than half by some estimates) are falling short.

in a McKinsey and company survey, 54% of respondents said that performance management in their organization had not had a positive effect on performance. (if not for improve employee performance, what exactly is the point of “managing” it?)

Today’s workers need more than many companies offer in terms of goal setting, feedback, coaching, and career development. Read on for six proven best practices for developing a performance management process that gets results.

What is employee performance management?

The best known (and sometimes hated) lever of performance management is the annual performance review. For employees and their leaders, this review process sets goals and expectations while reinforcing accountability. The problem is that many organizations define their employee management process solely through annual reviews, missing out on some key components of a complete program.

Effective performance management requires more than just a look back at an employee’s performance—it must look forward. Holistic performance management is based on clear goals interwoven with continuous learning, two-way feedback, and opportunities for growth.

How does employee performance management help employees and the organization?

Performance management should be a two-way street (well, more like a multi-lane highway). Employees must have ongoing support from their managers, peers, and the organization, while managers must receive the training and coaching they need to lead effectively.

High performance is a team sport. Each individual and team must be held accountable for achieving shared company goals that move the business forward. But people cannot be expected to perform at a high level without the right tools, processes, and support from their leaders. The entire organization thrives when every employee is fully empowered to do their best work.

6 Best Practices for Continuous Performance Management

Every industry and company is different, and HR strategic leaders are in the best position to know which performance management strategies work best for their organizations. That being said, there is plenty of good industry research (including 15Five’s) that demonstrates the effectiveness of some tried-and-true best practices.

Trade Annual Performance Review for Continuous Feedback

In a 15Five survey, 35% of individual contributors reported that they only receive valuable feedback during their annual performance review. Once a year; that’s all! Imagine waiting 365 days to find out if you are doing a good job or not.

Company culture significantly affects how often employees give, receive, and even request feedback. If the highest-level leaders in the company prioritize real-time feedback, the rest of the organization will typically follow suit. Operationalizing the experience with the process and technology also makes it possible to incorporate feedback mechanisms into daily work.

Clearly communicate expectations and goals.

You can’t improve performance without measuring it, and you can’t measure it without clear time-based goals. Setting objectives and key results (OKRs) can help align efforts across the organization and improve individual and team performance.

Visualizing OKRs on an easy-to-read OKR dashboard can give managers and employees more visibility into progress, wins, and roadblocks, and increase personal accountability and teamwork.

Acknowledge and show gratitude for good work.

According to an investigation of gallup, only one in three workers receives recognition or praise for doing a good job. Employee recognition by peers and managers drives engagement, productivity, and higher performance.

Recognizing employees, both in public and in private, reinforces positive behaviors and actions. Research also shows that gratitude at work can improve well-being, reduce stress, and build resilience. (At 15Five, we make recognition easy and fun with High Fives.)

Help employees discover their strengths

A strengths-based approach to performance management can yield tangible results for employee development. As Marcus Buckingham, head of people and performance research at the ADP Research Institute, writes for Harvard Business Review:

“Even though we label weaknesses ‘areas of opportunity,’ brain science reveals that we don’t learn and grow more in our areas of weakness. In fact, the opposite is true: we develop the largest number of new synapses in those areas of our brain where we have the largest number of pre-existing synapses. Our strengths, therefore, are our true areas of opportunity for growth”.

By aligning their strengths with critical roles and responsibilities, employees can unlock their true potential and focus on the areas that feel most natural and energizing to them. Help employees discover their strengths so they can thrive in their current roles and pursue new career opportunities.

Support the career ambitions of employees

Supporting employees’ personal and professional goals, even those unrelated to their current job, is the responsibility of every good manager. Unfortunately, 48% of the employees in our manager effectiveness study said they had yet to even one conversation with your manager about your career vision.

Career planning conversations are nothing to avoid and can actually improve employee performance in their current roles. Give your employees the tools to create a career vision so they can discover an exciting path forward, whether within your organization or outside of it.

Turn managers into coaches

Instead of “managing” performance, managers should be training he. In the McKinsey study, researchers found that when managers work to develop their employees through coaching, performance management systems are 74% more effective. In scenarios where respondents do not see their managers as effective coaches, only 15% report more effective performance management.

What if managers don’t know how to train effectively (or at all)? Well, they too can benefit from training! Consider a management development program that focuses on both training and coaching and happens in the workflow.

Ready to start improving performance management?

15Five Perform takes a flexible, holistic, insight-based approach to the performance management cycle, with an easy-to-use platform that HR teams can tailor to their needs.

Learn more >