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Continuous Performance Management is the Future of Employee Development

May 9, 2022| Reading time: 17min

BY Kate Super

Content Writer

5:1. That’s the magic ratio. Five positive interactions to one negative one helps develop a successful, happy, and motivated relationship. Data scientists have been publishing these findings for decades, including documentation of increased social and academic performance in schools and the ability to predict the stability in a marriage by just keeping this ratio in mind. 

So what makes it effective? Think: Increasing your positive touchpoints signals that consistent communication is worth your time. And the more the recipient realizes that “yes, this person is investing in me and my future,” the easier it becomes to receive criticism and grow from it.

It’s time to put this 5:1 ratio into practice to give employees the continuous performance management they deserve.

What is Continuous Performance Management?

As the name suggests, continuous performance management is the process of continually evaluating how individual employees perform according to the expectations of their role.

The definition of “continuous” varies from one organization to another, and in some companies,  from one department to another. (If you identify with the latter, it’s time to make a change. Alignment across teams is key to creating a fair and equitable workplace.) 

In short, the core concept of continuous performance management is frequent evaluations at regular intervals.

While continuous performance management styles may vary, you can think of the process as a cyclical loop. The idea behind this concept is surfacing real-time feedback to inform all aspects of your employees’ performance. 

For further understanding, let’s look at the hypothetical case of Antonio, a Talent Acquisition Partner. During a 1:1 check-in, Antonio and his manager discuss recruiting strategies for an open engineering position. Antonio spends the next week implementing those strategies to help fill the role. In the next week’s 1:1, his manager checks in with his progress and offers extra support to help Antonio reach his goal. 

Ideally, these regularly-scheduled 1:1s allow for continuous goal-setting, feedback, and assistance. This cadence helps Antonio feel valued and supported and allows his manager to celebrate successes, identify any areas of concern, and develop additional resources. Talk about a win-win.

Besides check-ins, your continuous performance management strategy should include:

  • Quarterly or Bi-Annual Performance Reviews: Traditional performance management only requires annual reviews, leading to recency bias and lagging engagement. By implementing more regular performance reviews, your managers and employees will be able to better set and measure objectives and goals, as well as put feedback to better use.
  • Setting and Monitoring OKRs and KPIs: This practice goes beyond setting yearly or quarterly Objectives and Key Results (OKRs) and Key Performance Indicators (KPIs). Managers and direct reports should continuously monitor their goals and align them with those of the company and their department.
  • Self-Evaluations: Self-evaluations provide employees the opportunity to highlight areas of success, provide context to decisions and metrics, and identify opportunities for growth. Empowering your people to evaluate their own performance gives them a voice in the review process.

Your performance management shouldn’t only be continuous. It should also be contextual. Learn more about how to achieve both.

Read about contextual performance management

Benefits of a Continuous Performance Management Strategy

If you want to make sure your people meet their goals and feel supported while doing so, then implementing continuous performance management is the best place to start. Read below for three benefits you’ll see after putting this strategy into action.

Greater Employee Engagement

Regardless of what field you’re in, your team is your most valuable asset. It’s therefore critical that you prioritize their happiness. And no, that doesn’t mean offering to pay for their Hulu account or the gym membership they’ll use once. 

Valuing your people looks like creating an environment in which they feel supported and can thrive, as well as offering benefits that provide the physical, mental, and emotional resources needed to be their best selves at work.

But what does employee happiness have to do with continuous performance management? Simply, when employees are happier at work, they are more engaged, productive, and innovative.

In fact, a landmark study found that engaged employees are twice as likely to be top performers than their less-engaged counterparts, miss 20% fewer days of work, and contribute as much as 26% in additional productivity. Studies published since have supported these findings, including one that found disengaged employees cost businesses between $450 billion and $550 billion annually due to increased rates of absenteeism and reduced output.

If you’re invested in your employees’ well-being, it stings a bit to think that, without continuous performance management, you could be overlooking hard work or not immediately addressing grievances. 

Forcing employees to wait months––if not an entire year––for the opportunity to meet with their manager and discuss progress isn’t just impractical from a management and business perspective; it’s also deeply unfair to the employee.

But with continuous performance management, your reports don’t have to wait to celebrate their wins or identify concerns. When you build a culture of ongoing feedback and learning, you can better recognize your employees’ contributions and provide clarity into their performance, which in turn makes them feel supported as they work toward their goals.

More Efficient Employee Evaluations

Want to create chaos in your workplace? Imagine asking Monica in Accounting to complete the entire year’s worth of bookkeeping in one month. Now consider her response: Shocked into silence? Panic? Curled up on the floor in the fetal position?

To continue this hypothetical scenario, Monica would spend the next month crunching numbers (and wiping away tears). She’d find engaging in other tasks impractical or nearly impossible. And unfortunately, with so much to do in so little time, she may even submit work that’s incomplete or inaccurate. 

This all sounds ridiculous and inefficient, but that’s what happens when you ask your managers to conduct yearly performance reviews. Cramming a year’s worth of feedback into one or two meetings increases the risk of unreliable reports and your people feeling frustrated.

Furthermore, problematic reviews can leave significant gaps in key data that your People team needs to make strategic business decisions. Let’s say, for example, that over in Sales John’s average deal volume drops significantly from June to July. However, John’s next review is scheduled in December. The sales team might potentially have to sustain five months of missed targets before identifying the issue, let alone addressing it. That’s a problem.

Alternatively, continuous performance management makes for a more efficient, streamlined evaluation process. It provides managers uninterrupted insight into their people’s progress toward identified OKRs and KPIs. Frequent, ongoing evaluations also enable managers to think proactively instead of reactively and identify potential needs – whether it be addressing skills gaps or creating contingency plans – much faster.

In the case of John, continuous performance management would help determine patterns in the problem and identify the cause. With frequent meetings, John’s manager can address issues in a timely way and better support John moving forward. For the company, this not only translates to a positive employee experience, but it also reduces lost revenue.

Better Performance Data

The regular, cyclical nature of continuous performance management structures doesn’t just mean more data. It also means better data.

Continuous performance management involves gathering data from a range of sources to provide managers a broad, holistic view of an individual employee’s performance over time. This means drawing upon qualitative data, such as detailed feedback from 1:1 evaluations, as well as quantitative data, such as revenue targets or production output. 

Thus, the more data you gather from a range of sources, the more complete the picture of each employee’s performance will be. Your people deserve that.

With ChartHop, you can look at your performance reviews through a variety of lenses.

Viewing your team’s performance data helps leadership plan for professional training initiatives, develop missing skills, and identify specifics needed for future hires.

And with more information at hand, it’s easier to identify and close skill gaps in teams and across entire organizations, especially in fast-moving, rapid-growth sectors. Furthermore, knowing your team’s gaps will help you create a plan to fill future role openings with candidates that will shape, grow, and add to your team’s success.

Lastly, gathering data from multiple sources increases the likelihood that your performance data will be more accurate. That’s because when you only rely on a single source of performance data, there’s unfortunately an increased risk of making decisions based on biased or incomplete information. When you are equipped with multiple forms of data, you can better see the full picture of your employees’ performance and make data-driven decisions moving forward.

How to Implement a Continuous Performance Management Strategy

Think you can roll out new feedback forms, add additional meetings to your calendar, and call it a day? Think again. 

Continuous performance management is a mindset and a cultural value that is accomplished at an organizational level. When you establish an environment of accountability and transparency, you’ll advance not only your people’s development but also your company’s meaningful, sustainable growth.

That said, below are three tips for creating a thorough continuous performance management process within your own organization.

1. Establish a Standardized Process for 1:1s

The first step toward implementing continuous performance management is establishing a regular cadence for 1:1 meetings between managers and their direct reports. Ideally, this should be on a weekly basis, but if that’s not sustainable, aim for monthly check-ins.

In addition to setting expectations surrounding how often 1:1s should take place, it’s also important to standardize how those meetings are run. The answer is objective templates, which not only help standardize your check-ins, but also boost employee engagement, since those completing the form document their talking points and set the agenda. 

Employee profiles in ChartHop

Standardized 1:1 forms help direct reports and managers prepare before check-ins.

2. Quantify Goals and Progress

Unclear expectations and alignment don’t just result in lost productivity; they’re also major contributors to employee disengagement.

That’s why it’s vital for your people to understand exactly what’s expected of them, how they can improve, and how their improvement will be measured. 

Furthermore, employees should have a clear, quantifiable roadmap for how their growth will be evaluated, regardless of their roles and responsibilities. That roadmap should also be as objective as possible and should include measurable OKRs that can––and should––be tracked over time.

That’s not to say that subjective judgment shouldn’t play a role in the evaluation process. Not every aspect of an employee’s performance can be quantified objectively. However, these judgments shouldn’t form the basis or majority of an employee’s evaluation. 

Subjective assessments can be used to provide valuable context, but it’s important to objectively quantify and demonstrate an employee’s performance to decrease bias, especially when making decisions regarding compensation or promotions.

3. Implement a System to Gather and Analyze Performance Data

To assess employee data effectively, you’ll need the right People Analytics platform.

But your software shouldn’t be viewed as one more system you have to juggle. Instead, it should integrate with your existing HR tech stack to pull stats from a variety of sources so you’ll have one place to access data to make informed, strategic decisions. And when your data is stored in a centralized location, you’ll reduce time spent finding and navigating spreadsheets and spend more energy using your data to do what’s best for your people. 

ChartHop Integrations

No more juggling multiple spreadsheets. Choosing a People Analytics tool that integrates with your existing tech stack allows you to gather and view your data in a single place.

When all your data is stored in one place, you can make informed individual, team, and company-wide decisions. Comparing your data across the board will help you see a complete picture of employee performance, allow you to discover any intersectionalities, and help you create an action plan to provide a better employee experience. 

Guiliana Zara, Head of People at Aper, acknowledges the importance of data in making “more efficient and well-informed decisions.” In addition to looking at data to understand teams, she says the company “also needed data to highlight both the areas where we’re doing well and the pain points that we need to focus on improving. In this way, data guided all the changes we implemented.”

Ultimately, when you establish a continuous performance management strategy, you can collect data from multiple sources more often. Storing this data in one space for visibility and easy access allows for constant reflection and improvement for all. 

The Future of Performance Management

Continuous performance management isn’t just about increasing your company’s bottom line or maximizing individual productivity, though those benefits can (and should) go along with it. Rather, it’s about helping your people be the very best versions of themselves at work.

If you haven’t already established a continuous performance management strategy, now is the time. By doing so, you’ll create a more supportive, responsive working environment that will increase productivity and leaders’ responsiveness, leading to a stronger business model overall.

It’s important to stay focused on your performance management, especially when your company is growing. Make sure you build processes that will grow with you.

LEARN HOW

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