Why Managers Love Continuous Performance Management
Conducting performance reviews every year as a manager is not easy. Remembering a year’s worth of work of multiple people is an almost impossible task for countless reasons. The result is usually vague feedback, empty phrases, and an inaccurate evaluation — in summary: a very uncomfortable year-end conversation.
Luckily, this is going to change for the better as performance management is transforming from a yearly event into a continuous process. The concept of continuous performance management is based on the idea that the most helpful feedback comes from real-time interactions. Whether the feedback is encouragement or constructive criticism, offering it at the moment allows managers to give higher quality assessments of their employee’s performance and to help them improve throughout the year.
Without further ado, here are the top eight reasons why managers love continuous performance management:
1. Timely and actionable feedback motivates employees
Giving feedback once a year almost guarantees that it will be vague and largely irrelevant by the time employees hear it. Apart from that, saving up a year’s worth of critiques is also detrimental to morale and often hurts engagement and productivity. These are rather discouraging results considering that the manager, according to Adobe, spends on average 17 hours per employee preparing for a performance review. The outcomes are demotivated employees and managers who wasted their time and energy.
By receiving feedback when different situations arise, employees can perform at their best and do not lose motivation by a wave of negative feedback. Whether it’s praise or coaching, delivering a timely response will help employees adapt to regular feedback. Through ongoing, real-time feedback you can communicate your expectations and your vision to the team in a transparent and continuous manner.
2. Constant development of employees
Imagine if a sports coach waited until the end of the season to provide feedback to his team. The very idea is absurd, right? How can he expect his athletes to develop their skills if he only gives them one opportunity to grow a year?
Leading a team within a company is no different. Yes, yearly reviews are “the way it has always been done”, but that doesn’t mean it’s an idea that should persist. Let’s drop this habit. Giving employees feedback only once a year prevents them from being able to improve all year long. Employees that receive feedback consistently have a chance to enhance their performance permanently. It’s simple but powerful.
3. Forward Focus
You’ve probably noticed that annual performance reviews can get tense. Often, it’s because it’s a natural human response to become defensive when we’re exposed to a stream of critiques. It feels more like a judgment and less like a conversation. In traditional performance reviews, there is a major focus on past performance and mistakes. But how is an employee, a team or a company supposed to move forward and adapt to future changes, if their reviews are only based on the past?
The beauty of continuous performance management is that it shifts the focus from past mistakes to future opportunities. Rather than a year-end judgment, managers and employees now engage in a year-long conversation. Feedback focuses on minor adjustments instead of overwhelming course corrections, which leads to better outcomes. As a result, the employees’ goals are aligned with the company’s objectives and ensure a progressive movement.
4. Managers Enjoy a Richer Picture of Employee Performance
According to the research firm CEB, roughly 77 percent of HR managers believe that the traditional review process doesn’t paint an accurate picture of an employee’s performance. For managers conducting performance reviews, it can be a quite unpleasant situation if their counterpart seems negatively surprised by the given feedback. The employee feels as if his performance is not taken seriously and is not documented in an individualized way.
In a continuous performance management process, the collected feedback is from the different sources an employee interacts with in his everyday work. This 360-degree feedback data is collected and accessible throughout the year. Consequently, managers enjoy a much more comprehensive picture of an employee’s actual performance.
5. More Meaningful Interactions
Every leader knows how stressful it is to go through all of the administrative work that comes with annual reviews. The extra paperwork and planning can make it difficult to focus on having a substantive conversation, which misses the point of the exercise.
When feedback is exchanged and collected throughout the year, a substantial amount of review is basically already over with by the time you sit down. Furthermore, all this feedback is readily accessible and therefore provides managers with a real-time cockpit of their employees’ strengths and areas for improvement. Managers can now help employees grow and work towards their goals.
Cisco has stated that the new performance management process has dramatically improved communications and feedback, enabling managers to touch base with employees on a continuous basis using new tools and check-ins that take very little time. In fact, according to a survey conducted by Deloitte, 83 percent of the companies that redesigned their performance review process reported that the quality of conversations between employees and managers increased.
6. Improved Ability to Close Skill Gaps
According to Deloitte’s Human Capital Trends, executives view shortage of skill as one of the most critical roadblocks to executing business strategies. Moreover, they realize that they cannot just recruit the ideal talent for the job, but must develop talent internally. Hence, identifying and closing employees’ skill gaps is a pressing priority.
In a continuous performance management process, feedback flows freely throughout the year, and the corresponding data is always available. This allows the manager to get the most out of the talent of employees because they now have a real-time view to spot and tackle skill-gaps immediately. Therefore, managers have the perfect tool at their disposal to evolve from task managers to active coaches that help their employees succeed.
7. Finally Worth the Investment
According to Adobe, 55 percent of office workers and 66 percent of managers wish that their companies would get rid of or change the current performance review process. They consider performance reviews an unproductive use of their time. CEB comparably concluded:
- 95 percent of managers are unsatisfied with the traditional performance management process.
- 65 percent of employees view the process as irrelevant or hindering their productivity.
So the old process not only costs a lot of time and money but also has no positive effects for either party.
As we discovered above, the continuous approach leads to much more meaningful conversations. The consequence is that employees’ motivation increases as they always know where they stand and they receive the opportunity to improve:
“The impact of these new performance practices is high: 90 percent of companies that have redesigned performance management see direct improvements in engagement.”
— Deloitte University Press
Continuous feedback can save a lot of time and money when implemented. With this new approach at the end of a review period, a manager merely needs to summarize the actionable and timely feedback into an accurate performance review.
8. Tools Used Are Easier and Simpler
96 percent of companies reported that the new tools in their redesigned performance management process were simpler to use.
Traditional performance management software tools were developed for the outdated once-a-year model and rarely loved by managers. The new tools used in continuous performance management are designed for the specific purpose to make the exchange of feedback as easy as possible, provide instant people analytics and support career development.
The results are tools that are geared to make the lives of managers more comfortable and more efficient in driving their team’s performance.
Summary
The new performance management approach does not take up as much time as the previous process did. Managers are now able to use that freed-up time to communicate with their employees and build meaningful and positive relationships with them. Additionally, the company saves a lot of money on the conduct of performance reviews by collecting timely feedback all year long. The process aims to make a manager’s work easier and the employee’s engagement more advanced.
If you want to know how to make your managers happy with continuous performance management, feel free to contact us. We’re offering a cloud-based application enabling ongoing, real-time feedback and frequent conversations between managers and employees. The result is a powerful process that engages, empowers and aligns employees to deliver on your organization’s top priorities.
