The widely predicted revolution in performance management, which was supposed to essentially eliminate the use of annual performance appraisals and rating scales, has not materialized.

Performance Management Infographic

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Instead, a majority of organizations are moving to frequent performance conversations and coaching to supplement formal appraisals, according to Brandon Hall Group’s 2018 Performance-Management Study.
In reviewing and analyzing the research data, we discovered five key strategies to make the performance-management evolution successful and become a contributor to business growth.

In this blog, we outline the Five Essentials of Effective Performance Management , but you can purchase the  full research summary in our store, which also includes exclusive insights and strategies to move forward with optimum performance management in your organization.

  • ESSENTIAL #1: Take Steps to Align Performance Management with Business Objectives. This may seem obvious, but only 35% of organizations said their performance management process is aligned with their organization’s business objectives.
  • ESSENTIAL #2: Ensure Managers Are Equipped to Succeed in The New Era of Continuous Performance Conversations and Coaching. The main driver of change in performance management is providing more feedback to employees so they can continue to develop skills and improve their performance. In the traditional system of annual appraisals with scant interim reviews, managers had little incentive to provide that feedback. But managers cannot be expected to magically become better coaches and mentors or have effective performance conversations simply because the new performance-management paradigm requires it.
  • ESSENTIAL #3: Fully Leverage Performance Management Technology. As performance management evolves, it is almost impossible to do it well without technology. The amount of data, analysis and instantaneous communications required to connect employees with each other and their managers simply cannot be done manually. All talent-management platforms either have a performance management module or the ability to integrate with dedicated performance-management software.
  • ESSENTIAL #4: Expand Performance Management to Teams and Hold Individuals Accountable for their Performance in Teams. Team-focused performance management is the next plateau in PM evolution. As organizations become flatter, more dispersed and more collaborative, cross-functional teams are increasingly used to complete projects and initiatives that transcend departments and geographies. Team performance must be evaluated along with individual contributions within those teams. Furthermore, individual team members should be accountable for their performance within teams.
  • ESSENTIAL #5: Continue to Evolve Your Performance-Management Approach Through Employee Feedback and Measurement. Many organizations clearly perceive a need to revamp their PM processes, otherwise we would not see the large-scale changes taking place. Overall, less than half of these organizations are gathering opinions and ideas from their employees on exactly what must be improved. The percentages are significantly better, however, among high-performance organizations and those in which performance-management and business objectives are aligned. These organizations understand the importance of feedback as a driver of continuous improvement and found a way to make it happen.

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