Companies are realizing continuous performance management is the most effective way to manage employees’ performance. Given the pace of business today, there are few processes your business will undertake only once a year, so why are you still doing performance reviews annually? When performance management is ongoing, productivity is improved. Managers who help employees regularly set goals and align those goals to what the organization needs see employee productivity increase by 56%.
What is Continuous Performance Management?
Continuous performance management or CPM is a performance management style that’s an ongoing, open conversation with your employees, unlike an annual performance review that only happens once a year.
The goal of performance management is to make sure your employees are performing at their best and to stay on top of any issues that might arise. You can’t do that with one conversation a year. The reward for implementing a CPM process is more productive and loyal employees.
Examples of Continuous Performance Management
Some performance management tools complement a continuous performance process more than others.
Management by Objectives
Management by objectives (MBO) is a technique that uses clearly defined objectives agreed upon by both managers and employees. With MBO, managers and employees work together to set clear goals and determine a path to achieve them. They also meet regularly to discuss progress and if the goals can be met.
The benefit of using the MBO strategy is that managers can help align employee goals to organizational goals. For example, if a company has a goal to increase revenue, an employee goal might be to set higher sales goals. Plus, since the employees participated in setting their goals, they’re invested in achieving them.
The success of this method hinges on set goals that are specific and measurable because once the review period is over, the employee is judged on the results. An employee who successfully meets the set goals may receive a bonus or salary increase.
360-degree feedback is a system that uses feedback from everyone who works with or around an employee. Managers, co-workers, direct reports, customers, CEOs or anyone who is in the employee’s circle anonymously gives their input, giving employees an idea of how their performance is viewed by others.
The benefit of using 360-degree feedback is it gives a well-rounded view of how an employee works with others and it can be done at any time. Reviews should be submitted anonymously with reviewers responding to direct questions. This can encourage team development as employees hold each other accountable and it can serve to improve communication within teams.
For the employee, it can eliminate biased judgment, especially if the employee doesn’t have a great relationship with their direct manager. The reality is, some co-workers don’t get along, whether it’s between manager and employee or employee-to-employee and having multiple opinions about behavior helps guide the decision-making process when it comes time for promotion or performance management. Remember to ask questions that refer to an employee’s leadership skills, interpersonal skills, the ability to problem-solve, motivation and efficiency. Encourage honest, objective feedback with constructive comments. And, 360-degree feedback should just be one part of your performance management process; don’t rely solely on it for decisions about employees.
The Objectives and Key Results (OKR) framework is a simple tool that helps an organization achieve goals by building specific and measurable actions as well as communicating and monitoring progress toward them. In terms of CPM, using OKRs directly aligns employee progress with company objectives. Short and inspirational but also ambitious objectives are set for individuals, teams or the organization as a whole. Employees work towards completing those objectives, showing managers the key results, indicating the level at which they’re performing their jobs.
The benefit of OKRs is they help employees stop working in maintenance mode and instead get into mission mode, where they understand they’re working towards helping the company meet its goals and objectives. For employees, maintenance mode includes the following.
· Doing busywork
· Being unsure their how day-to-day tasks relate to the organization and mission
· Doing things because “that’s how it’s always be done”
· Reading out a “to do” list in team meetings
· Feeling like their work is insignificant
· Managers not knowing what their employees are working on
By contrast, employees in mission mode:
· Know why they’re doing what they’re doing
· Understand how their daily activities align with organizational objectives
· Know they are contributing to the mission
· Are always constructively challenging themselves to make sure their work remains aligned with goals
· Can get clear answers from managers as to why they’re working on a particular task.
How Performance Management Software Can Help
A good CPM program requires a couple of things to be effective. First, the support of senior management is necessary as buy-in from the top is essential. Second, it needs to be fair and unbiased, especially when performance is tied to promotions or compensation. And last, it needs to be constructive. No employee wants to hear bad news but feedback needs to be objective, without being overly critical. These frank discussions about performance should revolve around actions that are measurable or at least specific. Here are a few examples.
· You didn’t meet last month’s sales goal.
· You passed on five customer complaints to other employees.
· You lost your temper with another employee yesterday.
Don’t “sugar coat” weaknesses with positives and keep any discussions about strengths separate to avoid confusion.
Performance management software can aid throughout this process. Performance management software systems, like Arcoro’s, simplify the process of setting goals, creating evaluations, and tracking employee progress.
If you’re interested in learning more about how HR tech can aid you in measuring employee engagement: Measuring Employee Engagement With HR Tech.