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5 Reasons Why Continuous Performance Management is Driving Organisational Change

Editor’s Note: This is a guest post by Stuart Hearn – CEO of Clear Review. His opinions are his own.

As the years progress, HR has to reinvent itself and keep pace with modern thinking, business insights and psychological thought on what best motivates excellent performance. As such, certain trends, once universally accepted, are beginning to wane in popularity. A significant example is that of the annual performance appraisal. Companies left and right are ditching their yearly performance review in favor of a more apt performance management trend: continuous performance management, otherwise known as agile performance management.

Continuous performance management relies on more regular performance discussions, held weekly, bi-weekly, or monthly. Such frequent communication between manager and employee has a whole host of advantages, including reduced turnover and increased engagement.

In this post I will address the agility aspect of agile performance management. What exactly is it that makes continuous performance management so agile? And why is it deserving of such a huge organizational change?

1. Continuous performance management allows for more timely feedback

Everyone knows that in-the-moment feedback is more valuable than feedback delivered months after the event . Annual performance reviews might cover feedback, but it is likely to address behavior or habits exhibited months ago. Since then, unfavourable behaviour will likely have become habit, and favourable behaviour was never given the recognition it deserved.

This simply isn’t good enough for a 21st-century business. Today, employees are accustomed to real-time feedback, and they deserve to receive it in the workplace.

With more frequent meetings, managers have more of an opportunity to step in and address performance issues. They can also deliver much-needed recognition — something that has a huge impact on employee engagement. This fluid communication is exactly what continuous performance management is all about.

2. You can readily address areas in need of development

Increasingly, employees are seeing careers as development opportunities. Your top workers aren’t satisfied with remaining stationary; they want to improve. When they only have one meeting a year to address development needs, they are hardly likely to benefit as much as when such matters are discussed on a monthly basis. Simultaneously, these frequent performance discussions will also give managers an increased opportunity to detect areas that he or she believes the employee should work on. Ultimately, this agile attitude towards development benefits the employee and the company, who has the advantage of a stronger, more skilled employee.  

3. You’re able to react and adapt objectives when necessary

Traditionally, SMART objectives were set once a year. They were allocated by C-Suite and cascaded downwards to lower levels. This process has two significant flaws. The first being that objectives were rigid. If circumstances changed, and these changes required a shift in terms of objectives, this wasn’t possible. After all, all objectives need to be handed down from up high. This isn’t conducive to a dynamic, evolving workforce.

Secondly, when employees are simply given objectives, they don’t have as much ownership or pride in them, when compared to an employee who takes charge and allocates their own goals. Employees need to be given context for their objectives and talked through how all employee objectives help towards the achievement of company goals. With continuous performance management, employees are given autonomy over their objectives. They have the opportunity to discuss necessary alterations during frequent performance discussions.

4. You can quickly react to underperformance

There is a reason regular performance discussions have been named the most effective performance management tool.

When managers have frequent communication with their employees, they are able to more swiftly pick up on warning signs of underperformance. This gives ample opportunity to address these issues and turn performance around. This is fairer for the employee, who might be underperforming as a result of insufficient workplace processes, but it’s also best for business. It’s better to address and resolve inefficiency in employees than to simply dismiss them and spend time, money, and resources recruiting new staff.

5. Agile performance management capitalizes on software

The reason why continuous performance management is the way of the future is its willingness to embrace modern technology. In fact, agile performance management wouldn’t even be feasible without advances in modern technology. Such software allows in-the-moment feedback, scheduling of meetings, and the tracking of goals. Companies who are stuck in the mud with regards to their performance management processes are also more inclined to remain with inefficient means of tracking information, such as paper-based systems. In order to succeed and thrive long-term in this rapidly changing and competitive business environment, companies need to be open and willing to experiment with new technology.

Stuart Hearn

Stuart Hearn has twenty years of experience in the HR sector. He co-founded plusHR, a leading UK HR consultancy, and previously worked as International HR Director for Sony Music Publishing. Stuart is currently CEO of Clear Review, an innovative performance management software system.

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