Creating an environment where employees can perform their best is paramount for any organization. But the old ways of evaluating employee performance (hint: the annual performance review) don’t quite hit the mark. They lack the clarity, connection, and coaching that your top performers crave.
Everyone—whether they’re working on the front lines, managing a team, or running the show—wants employees to perform well. But checking the boxes in a clunky and cumbersome performance management program won’t help employees get there.
How you set up your performance management cycle is crucial for building a workplace where everyone is engaged and can excel. The process needs to be simple, clear, and valuable. Think of your performance management cycle (and every process and initiative within it) as a culture enhancer. Ask yourself:
There’s no one-size-fits-all approach for building your effective performance management plan. You need a framework and tools that fit your organization and teams. In this blog, we’ll share some ideas for shaping your strategy into something that really works for you. It's important to remember that change is a process—not an overnight event! But the right start is critical. Let’s transform your performance management cycle into a powerhouse for employee success.
Your performance management cycle shouldn’t just be a set schedule of reviews. You want to create a rhythm of meaningful conversations and activities that drive performance, growth, and development. Your performance management program should help make employees better at their jobs. It should ensure their hard work matches up with what the company wants to achieve. It should empower, motivate, and boost employee engagement.
A good performance management plan focuses on goals and alignment. Performance management becomes less of an "HR thing," and more a part of the daily grind. Each activity has a purpose—one that your people believe is important and that gets them excited to participate.
The basic components of a traditional performance management cycle are planning, monitoring, reviewing, and rewarding. These steps help organizations set goals, track progress, share feedback, and recognize great work. They look different depending on the organization.
In a more traditional organization, the cycle likely centers around the annual review—paired with formal activities like goal setting or 360 feedback.
In an organization with a more continuous approach, it's less about formality and more about culture. It's a series of activities weaved into a performance tapestry, with evaluations and assessments happening at the end of the cycle. A performance management cycle rooted in continuous performance management might look like:
By folding in more of these elements, your performance management cycle can transform from having roots in the dreaded annual review to a dynamic, ongoing process that truly supports your employees and pushes the whole organization forward.
Performance management is at the heart of employee and business success. It's the systematic approach to defining goals, appraising progress, and offering coaching and feedback. The right strategy can inspire and engage employees to drive meaningful impact.
But the research is clear: there's a right and a wrong way to do it. Here's what some of the latest research says about performance management:
Employees are looking for a system that not only evaluates their performance—but helps them grow and contribute meaningfully. Managers are looking for a program that is easy to maneuver and a good use of their time. And leaders want visibility into employee performance in a way that helps them make informed talent decisions.
The purpose of a performance management cycle is to set goals, track progress, share feedback, and reward great work. This should be done in a way that aligns with organizational objectives and values. It should engage employees, improve performance, and foster growth. By incorporating continuous elements, the performance management cycle becomes an integral part of daily operations, rather than a once-a-year HR task.
Performance management has taken many shapes over the years. Many organizations are still using some form of the traditional performance appraisal approach. This looks at an employee’s individual performance by:
Employees are categorized as high, middle, or low performers, and contributions are measured by output versus outcomes. These traditional approaches were built to suit workplaces at the turn of the 20th century when work environments were much different. Enter the need for continuous performance management.
As businesses have evolved over time, so has performance management. Today, organizations are leveraging their talent as a competitive advantage and prioritizing innovation and critical thinking over execution.
This evolution has inspired a shift from annual appraisals and goal management to continuous performance conversations and feedback. Our research shows that 36% of employees prefer to have weekly one-on-ones and just 3% want to only have these conversations annually.
A continuous performance management approach allows leaders to capture real-time data and coach toward ongoing progress.
An effective performance management cycle should be rooted in continuous performance management. This is pivotal in harnessing the full potential of your workforce. When finely tuned, a performance management cycle can lead to:
By keeping a steady flow of check-ins and support, you can keep everyone aligned. Managers can help adjust course easily and celebrate employee achievements in real-time.
A well-crafted performance management program also boosts employee engagement. When employees know where they stand, they have the power to change and grow. They clearly see how their work adds up to something bigger, and they're more committed to tackling big goals. A continuous approach creates a conduit for ongoing communication between managers and employees, further boosting engagement and employee motivation. It creates space for real talk and provides opportunities to hash out goals, tackle roadblocks, and discuss next steps.
A streamlined performance management cycle is also essential for organizational growth. It ensures that employees are not only cognizant of their role in the larger picture but are also equipped and inspired to excel. A continuous approach is key for culture that value high performance and accountability. It can propel everyone toward success, including individual employees and the organization.
An optimized performance management cycle helps cultivate a culture of excellence, stimulates growth, and lays the groundwork for sustained success. It can help you create a workplace where every individual is empowered to do their best work.
Organizations often view a performance management cycle in separate stages. But the most impactful programs incorporate a web of integrated performance activities that work together to boost employee and business success. Quantum Workplace likes to think of the performance management cycle in five phases.
This phase sets the organization up for success by identifying priorities and aligning individuals, teams, and the entire organization.
Goal-setting is at the heart of your performance management cycle. Your managers and employees should come together each quarter to define and align key objectives. Employee goals should not be set in stone. They should be living targets—revisited and refined as new challenges and opportunities arise within the business.
Weekly check-ins are the connective tissue of your performance management cycle. Research shows that employees prefer weekly 1-on-1s—and they're most engaged when they have them. Weekly check-ins ensure each employee has the attention and direction they need to excel. The frequent touch points ensure weekly priorities are clear and progress is on track. And they help managers and team members troubleshoot obstacles and capitalize on opportunities.
Monthly 1-on-1s position managers as coaches, not critics. Saving performance conversations for the end of quarter isn't ideal. You want your teams to be able to adapt and adjust as business needs change. Each month, managers and employees should come together for dedicated 1-on-1 conversations. These sessions should focus on immediate priorities, personal accomplishments, and coaching and support. They serve as regular pulse checks to help maintain steady progress and engagement.
As each quarter wraps up, managers and employees should gather and review. Quarterly performance check-ins are not just for looking back—but also strategically forward. These conversations are pivotal in setting direction for the coming months. Data from quarterly performance check-ins can inform promotions, succession plans, and development priorities.
A few times a year, managers should also set aside time for career development conversations. These are deeper conversations that delve into each employee's career trajectory and long-term goals, including personal goals. Development conversations serve as strategic deep breaths in your performance management cycle. They allow for big picture reflection and recalibration of development goals and paths.
The annual performance review has gotten a bad reputation in recent years. But it's still a valuable piece of the puzzle when it's used with more continuous activities. It's helpful to take a step back once or twice a year to review employee performance over a longer period. This should be a comprehensive reflection on the year's achievements; an assessment of areas for growth in the coming year; and an opportunity to gather data for strategic talent decisions.
Follow our 10 performance review best practices to level up your teams.
Frequent feedback and recognition keep your performance management flywheel spinning smoothly.
Feedback keeps your teams and initiatives vibrant and informed. It should come in many different forms like project feedback, peer feedback, or customer feedback. A continual stream of thoughtful, regular feedback helps employees keep a 360-view of their performance. Real-time recognition helps nurture a culture of appreciation and motivation. It helps employees feel valued and motivates them to do their best work.
By integrating all of these activities into your performance management cycle, you can create a consistent, supportive environment that promotes high performance, fosters employee development, and drives organizational success.
Learn how Benesch used 1-on-1s and continuous feedback to improve engagement and retention
Performance management programs can present a variety of challenges that organizations need to address to ensure efficiency, effectiveness, and engagement.
When employees are unsure of expectations or don't see how their work contributes to the larger picture, it can hinder performance and engagement. Work to:
By sharpening the focus on clarity and objectives, you can pave a clear path for employees to succeed.
Traditional performance management systems place too much stake in the annual performance review. This approach can be problematic for several reasons. Instead:
Transitioning to continuous performance conversations keeps everyone nimble and growing all year long.
Timely and constructive feedback is essential for effective performance management. But for many organizations and managers, this is a skill that needs practice. Focus on:
When feedback is a steady stream, employees can quickly adapt and excel.
When there is a lack of clear communication between managers and employees, it can lead to misunderstandings, confusion, and a lack of alignment. To address this challenge, organizations can:
With clear and effective communication, organizations will see alignment and performance soar.
Inconsistent application of the performance management system can undermine its effectiveness. When performance standards and expectations are applied inconsistently across different teams or departments, it can create a sense of unfairness and demotivate employees. To address this challenge, organizations can:
When consistency rules, employees feel more secure, more committed, and more likely to do their best work.
Without the right training, even the best performance management plans can stumble. When managers and employees are not adequately trained on the performance management process, they may struggle implement it. To address this challenge, organizations can:
Armed with knowledge and resources, everyone can engage in the process more effectively.
A rigid performance management system can stifle a diverse workforce. To address this challenge, organizations can:
When the system adapts to the individual, engagement and performance naturally rise.
An "outside-looking-in" approach to performance management can leave employees disengaged. To address this challenge, organizations can:
When employees are drivers, not just passengers, their motivation and performance rev up.
Out-of-date tech can drag down the whole performance management cycle. To address this challenge, organizations can:
With cutting-edge tools in hand, organizations can streamline processes, making the performance management cycle a breeze for all.
The future of performance management is a more continuous approach. That doesn’t mean you have to change your strategy immediately. Many organizations fall within what is the middle ground of performance management.
Quantum Workplace coaches to evolution over time. If you follow a more traditional approach to performance management, you can use our performance pathways to identify strategies you use and make small changes to transition to continuous performance management.
Employees say that their organization’s approach to performance management could improve. The question is, what do employees want and what strategies will help the organization meet its goals? The 2024 Employee Engagement Trends Report has some insights.
What do these insights tell us? More organizations need to empower their managers and employees with technology. Robust tools help them connect their work back to organizational success. And have frequent, meaningful coaching conversations between employees and managers.
Performance management is a critical function in your organization, and it deserves the right technology to support it. But with a sea of solutions to choose from, navigating the tech landscape can be overwhelming. Here, we'll guide you on selecting the right technology to enhance your performance management system. Here are a few key guidelines to get you started: 
Performance management should inspire, engage, and connect your teams. If your teams feel bogged down by administrative tasks, you're not doing it right. To understand what your biggest pain points are, assess your current solutions—and make sure to involve your key stakeholders in the process. Identify what's working and what's not with your current tools. Look at adoption rates, the quality and accuracy of information, and how well leaders use the data for decision-making.
HR should not be the primary driver of your performance management cycle. They should be focused on the strategy, the frameworks, and coaching your people leaders to implement the system well. Don't make your HR team suffer and struggle with bare minimum tools. Let technology ease the administrative load, so HR can spend more time on strategic initiatives. Your investment will only compound over time.
Your managers do not have time to navigate clunky processes and tools. If your tools are not easy to use, they will cut corners or avoid the process altogether. You need to equip your managers with a system that makes coaching to performance easy and impactful.
Managers and employees should be able to easily access and use your performance management system. Look for tools that integrate with the systems you already use, so performance activities become part of their flow of work—not a series of additional tasks and steps. Take the time to understand the unique needs of your teams. Conduct focus groups, surveys, and interviews to gather insights from those who will be using the system. Their input is invaluable in shaping your decision.
Don’t just settle for a tool, even if that tool gets the job done. Seek a partner that understands your goals and is committed to supporting your journey towards a more effective performance management system. Consider your organization's future needs. How will your requirements change over time? Select technology that can adapt and grow with you.
To optimize the performance management cycle, it is important to make it user-friendly and accessible. This includes using HR software and performance management systems that are intuitive and easy to navigate, ensuring that employees and managers can easily access and utilize the tools.
Integration is essential for optimizing the performance management cycle. This includes ensuring that the performance management software seamlessly integrates with other HR systems, such as HRIS, learning management, and talent management systems. Look for:
Customization and flexibility are key considerations when selecting performance management solutions. Every organization has unique goals, needs, and workflows, and it is important to choose a solution that can be customized and adapted to meet these specific requirements. Consider:
Optimizing your performance management cycle is important to employee engagement and performance. By leveraging a continuous approach, you can overcome common challenges and ensure a more efficient process. Choosing technology that integrates with your current systems can enhance your success. And training your leaders to implement your performance management program and tools is key to strong outcomes.
Ready to coach your employees toward success? Learn how Quantum Workplace can help you optimize your approach to employee performance.
Published November 4, 2021 | Written By Kristin Ryba
