Let’s take a minute to answer two simple questions: What is continuous performance management? And why are we talking about it now?
When you hear the phrase performance management, a few things likely come to mind. Maybe setting goals and OKRs, meeting KPIs and measuring productivity. Or maybe even (ugh) antiquated annual performance reviews.
Continuous performance management takes the best of those processes and transforms them from inorganic, anxiety-inducing events into positive, change-driving culture. This approach to performance management is so popular, in fact, that our recent trend report found only 7% of managers still only do reviews annually.
Ready to join the 93%? Let’s dive into what continuous performance management is, what it can do for your company, and specific examples of what this style of people management can look like.
Read on to learn:
- What is continuous performance management?
- Continuous performance management vs. annual performance reviews
- Why is continuous performance management important?
- 6 examples of continuous performance management
- How to transition to continuous performance management
Continuous performance management is a methodology that brings three important qualities to traditional performance management. These are being: continuous, timely, and multidirectional.
🔄 Continuous is what it sounds like. Your performance management processes, including goal-setting and tracking, 1-on-1 check-ins, feedback, and performance conversations, take place throughout the year and quarter, ideally every week. This has the important effect of transforming employee performance management into a seamless, ongoing conversation. Which allows your company to create a powerful feedback culture.
🗓 Shifting to a continuous management model also ensures that your feedback is timely. You’re able to provide employees coaching and direction in real-time, allowing them to shift, adapt, and introduce efficiencies as the need arises, rather than waiting until the end of the year or quarter when the project is long-forgotten. (Feedback on a project completed three months ago may be an interesting post-mortem, but the employee can’t do anything to put it into effect now — which is a frustrating experience!)
🧭 Finally, continuous feedback is most effective when it’s multidirectional. This means weekly check-in conversations between employees and managers focus on the manager’s performance as well as the employee’s, and what each can do to help the other. This also includes peer and team feedback. Think about it — this transforms the review process into an ongoing conversation, rather than a barrage of one-sided critiques.
Learn the 3 frameworks for effective 1-on-1s
Imagine a football team whose coach only offers direction and coaching once per year. Now imagine a team with a group of coaches actively involved in reviewing plays, planning strategies, and pushing players to improve technique. Which one is going to the Super Bowl?
Let’s not throw the baby out with the bathwater. The traditional annual review process is a model with good intentions. But it’s a poor fit for today’s workplace, leading to inefficiency, lost productivity, and a sense of dread that impacts your company culture’s psychological safety.
⌛️ Inefficiency: Annual performance reviews are a historical snapshot of the employee’s performance over the last year. They may not reflect the present, and feedback delivered comes too late for the employee to put it into effect.
💸 Lost productivity: There’s no disputing it — the American Psychological Association (plus hundreds of business thought leaders) cites that context-switching costs us in productivity. And the more complex and less familiar the task, the more time and energy it takes us to switch gears. Keep performance management integrated smoothly throughout the year and make it an automatic part of your company culture to avoid those lost dead weeks at the end of each year or quarter when managers must “stop working” to write reviews for their reports.
😱 Employee dread: Shifting to continuous and multidirectional feedback is the ultimate cure for performance review anxiety. If you’ve ever procrastinated on delivering bad news, you know that dread accumulates like debt. (In fact, the Harvard Business Review verifies it.) Having performance conversations continuously turns feedback from a scary annual event to an ordinary conversation. And removing that fear makes the feedback easier to hear, integrate, and make use of.
Read our ultimate guide to giving performance reviews
Why is continuous performance management important for your bottom line? Because it keeps your employees working collectively toward your company’s goals year-round, continually improving performance.
And the stats don’t lie. Gallup reports high-performing teams experience:
40% less employee turnover
37% reduction in absenteeism
48% fewer staff safety incidents than disengaged teams
Want to learn more? Our article Why Your Company Needs Continuous Performance Management unpacks the full argument.
Still having trouble imagining what continuous performance management looks like? No worries. Here are 6 elements to incorporate into your performance management process:
These 1-on-1 conversations, typically between an employee and their manager, should be held regularly. This is a casual, less-structured opportunity to provide real-time feedback, sync up on goals, and discuss blockers. So aim to have these once per week, though if you’re new to this mode, you can start with once per quarter.
We don’t recommend this lightly — employees in workplaces with regular check-ins are 400% more likely to report that their performance reviews were useful, compared with those receiving annual reviews only.
Here’s where the multidirectional aspect of CPM comes in. In a 360 review, an employee receives feedback not only from their manager, but also peer feedback and feedback from their reports.
This not only decouples “review” from “ack!” (because we’re generally more comfortable with our coworkers than our bosses, making the feedback we get from peers seem less threatening). It also grants employees a fuller picture of how they’re doing by offering a diverse range of perspectives.
Performance discussions don’t go away when you introduce continuous performance management! In fact, they become more useful, insightful, and accurate the more regularly they’re performed.
Doing performance appraisals quarterly (as we advocate in our Ultimate Guide to Performance Reviews) allows the conversations to focus on newly completed work, discuss ongoing challenges, and highlight growth — all while it’s fresh in the memory. That’s why human resources leaders at companies doing regular performance appraisals are 1.5 times more likely to say they’re helpful than those at companies doing annual reviews.
Recognition and rewards
Here’s a workplace tip we’ll give you for free. Take recognition and rewards out of the “nice-to-have” column in your performance process checklist and make it a “need-to-have” — if not now, then yesterday. Because appreciation is a key pillar of the employee experience, and there’s no more direct driver of employee appreciation than recognition and rewards.
Still unsure? As we note in our guide, the Science of Recognition & Rewards, 80% of employees cite motivation to work harder when their boss shows appreciation for their work. So start looking into the transformative power of recognition and rewards today.
Goal-setting and management
Goals are a fundamental part of any performance management program, and the key to alignment and productivity within your organization. So work with managers to ensure that individual employee goals are aligned with greater company goals and key results. Then, integrate goal-tracking into those weekly 1-on-1 check-ins to keep progress on track.
New to goals, or looking to revamp your approach? Check out our Definitive Guide to Setting Goals at Work.
Your performance management plan should be dynamic and responsive to the realities of your company and culture. So keep your finger on the pulse of that culture and solicit employee input regularly via surveys.
Surveys allow you to take the company’s pulse, asking your workforce to report on employee engagement, trust in leadership, productivity, and faith in company direction. Plus, they demonstrate to your employees that you’re listening, and you care about their ideas and opinions.
Even better? You can use survey data to drive decisions. We can show you how to get started with Kazoo’s Engagement Surveys.
Ready to make the change? We’ve identified 5 key steps in our comprehensive guide, 5 Steps to Change Your Performance Management:
- Outline reasons for change
- Identify the desired goals and outcomes of your new process
- Find the new solution
- Adopt a new mindset
- Roll out the new process to your team and company
Spoiler: One of these is harder than it seems! But we’ve got you covered. Find the full guide here.
Performance never stops. Neither should management
So there we have it. Continuous performance management is a gamechanger, with an indisputable impact on your company’s business outcomes, productivity, engagement, and more. So get started today — and watch the payoff continue.
Ready to get started with a continuous performance management? Kazoo’s Employee Experience Platform makes performance management a breeze — plus keeps your employees aligned and connected through rewards, surveys, and more, no matter where you’re working.