Performance management is a process used in a variety of organizations. It may be put in place when leaders want to build an environment where employees perform at their best. It is used to ensure that all delivered work is of the highest quality.
There are two different approaches related to performance management. These include traditional performance management and continuous performance management. This article will explain what the differences are and give you insight into the benefits of the latter.
What is Traditional Performance Management?
Traditional performance management is something that most people are familiar with. A manager is tasked with talking to an employee about their performance over the last 12 months about once a year.
While this is a common approach to performance management, that doesn’t mean it is the best approach.
The issue with traditional performance management is that it has many limitations. Some of those include heightened anxiety near the reviews, single errors being the focus of the evaluation, and making it harder to rank performance.
What To Expect from Continuous Performance Management
Continuous performance management is a more modern method of keeping up with the performance of employees. Instead of having one long annual performance review that covers many months, continuous performance management implements ongoing, short check-in meetings over the course of a year.
In addition, continuous performance management offers real-time feedback for workers on a more regular basis.
As we learn more about human motivation and technology continues to advance, many organizations are moving toward continuous performance management instead of a single review each year. Ongoing performance management can motivate and align employees.
This performance management process helps raise performance since employees are constantly aware of how their work plays into company goals. It also allows workers to understand what current company priorities are.
Businesses are becoming increasingly aware of the many disadvantages of a single annual review. Continuous performance management eliminates those downfalls and ensures that employees are motivated and morale stays high.
Critical Factors in Continuous Performance Management
There are several critical factors involved in continuous performance management, including the following:
- Periodic discussions about goals
- Frequent conversations and performance reviews
- Prioritizing constructive feedback
- Plans for learning and development
- Performance improvement monitoring
- Real-time appreciation and recognition
Top Benefits of Continuous Performance Management
All of the parts that make up continuous performance management also create a series of benefits for businesses and other organizations. We’ll go through the most relevant of these below so you can understand why you might choose this type of performance management option.
1. The Creation of an Engaging Work Environment
When a continuous performance management system is put into place, it benefits both employees and managers. Each group will have an open environment for sharing, interacting, and discussing what they do in their roles on a regular basis. This can offer great help in finding training requirements and shortcomings.
Employees have an understanding of how they are performing and what steps to take to improve. It also gives workers the space to offer feedback to leaders and the organization as a whole.
Since both sides, workers and managers, can receive and give feedback on a continuous basis, each of these people will benefit. This creates a more effective performance management cycle.
2. Better Recognition of Employee Productivity and Achievement
When employees are happy, it makes them more productive. When productivity is high, employees work harder. One of the best ways to ensure this is through recognizing excellent performance.
When a continuous performance management system is implemented, it creates a platform for recognizing the performance of works on a more regular basis. All people want to be told when they are doing well.
Having achievements and accomplishments recognized can create an environment where workers push themselves to offer their best.
3. An Increase in Retention of Employees
Knowing what increases employee motivation and recognizing efforts can assist management with determining the optimal way to reward outstanding performance. This alone can lead to employee retention.
Experts indicate that the implementation of regular employee feedback creates nearly 15% lower turnover rates than with employees who acquire no feedback.
When workers feel they aren’t acknowledged and are poorly managed, that can lead them to find a new position elsewhere. Conversely, people thrive in areas where they find both recognition and challenge.
Incorporating regular feedback lets employees resolve and speak up about issues. If the conversations with management are ongoing, open, and fluid, that creates a positive work culture. Employees will feel free to express their opinions rather than holding them inside.
In addition, managers have a better understanding of team issues and overall performance.
4. A Drive Toward Employee Engagement
When performance is tracked on a regular basis, it’s easier to note early if an improvement is needed. Once a manager realizes improvement is required, the following question becomes why is improvement required? For example, it could be based on gaps within the organization or the need of an employee to learn new skills.
After identifying these things, organizations can implement training that helps workers develop skills so they have the experience and knowledge needed to be high-performing. Or the organization can choose to bring in new members who offer the required skills.
As a whole, this can create better employee engagement. In addition, continuous performance management offers good relationships between managers and employees so that improvements can be made regularly.
5. Allows Easier Goal Setting Activities
Implementing a continuous performance management system will help with updating and modifying goals based on the performance of an organization, team, and employee. The system is adaptable and changes based on the business environment. It offers a way to keep goals evolving as more information is provided.
It can take time to implement continuous performance management, but it’s well worth doing. There are tons of benefits that can help make your organization stronger. If the benefits above are desirable for your organization, learning more about continuous performance management is an excellent place to start.