Performance management has changed a lot in the last few years. What was once something you did once or twice per year has evolved into a continuous process that requires intentional application and ongoing refinement. That’s a good thing – it ensures you’re able to truly develop your employees and still move your business forward at the speed of the modern world. What we’re talking about here is agile performance management.

Not sure what it is or how it differs from conventional performance management. In this guide, we’ll walk you through agile performance management, what sets it apart from older processes, and even how to implement it within your organization.

Agile Performance Management

What Is Performance Management All About?

First, let’s define performance management in a broad sense. What’s it all about? It’s right there in the name. It focuses on refining company performance through upskilling employees and helping them overcome problematic behaviors.

There are myriad problems with older approaches to PM, though. In the past, employers reviewed employee performance once a year, or twice at most. They also used the “carrot and stick” model to firmly encourage employees to shape up or ship out.

As you can imagine, the results weren’t all that spectacular. Many companies saw little in the way of benefit while incurring costs and losing talent at an alarming rate. Agile performance management offers a stark difference, and, instead of hemorrhaging time, money, and skilled employees, it allows you to retain those assets and build a stronger business.

What Is Agile Performance Management?

You might be more familiar with APM under the term “continuous performance management”. It comes down to the same thing. You take a nuanced, shorter-term approach to managing employee performance.

Instead of reviewing performance once or twice per year, you would do so quarterly, monthly, or even weekly depending on the situation, the employee, the organization, and the goals/needs in question. Of course, you’ll find other differences here, too. They go deeper than just the frequency with which you review employee performance.

The entire process is different. It’s collaborative and constructive, rather than being one-sided and, often, punitive. It’s about building up, rather than tearing down.

Still, the hallmark of this process, and what makes it “agile”, is the frequent check-ins with employees. Rather than an annual nod of the head to performance improvement, you embark on an iterative process that builds on each check-in. There is no culmination point – it is continuous, and helps propel employees to greater and greater heights. With their success comes success for the organization.

What’s a Check-In?

To help answer the question of what agile performance management is, we need to delve into what a check-in is and the role it plays in the overall process. As mentioned above, the “agile” part of this PM method involves frequently checking in with your employees. Most businesses choose a monthly basis, but you can (and possibly should) do so more frequently. In some cases, weekly check-ins can provide immediate feedback that employees can use for real-time course correction.

So, what’s a check-in? In some ways, it’s the antithesis of the formal performance review meeting. Check-ins are:

As you can see, these are very different from the way that annual performance reviews are handled. That’s good news, because the infrequency, impersonal nature, and disengaged format of those reviews led to failure more often than to success.

The Need for Conversations in Agile Performance Management

The entire point of agile performance management check-ins is to foster conversations between management and employees. It’s not a once-and-done sort of thing. Rather, it’s an ongoing series of communications that build on each previous interaction, creating a cohesive, holistic whole that’s focused on development, learning, growth, and improvement.

What is the goal of performance management? We believe that it’s to encourage and reward good behavior while providing employees with timely feedback that allows them to change less-desirable behaviors. Doing that is only possible through ongoing conversations.

The ideal option here would be to have regular one-on-ones with employees – weekly meetings that resemble retrospective meetings in the world of agile software development (where the agile methodology arose). It’s about focusing on near-term goals and tying those in with long-term objectives. During these conversations, managers should ask questions that encourage employees to think about previous feedback, find ways to implement it, and then track their progress.

Examples of these questions include the following:

Agile Performance Management Focuses on Employees, Not the Business

One way in which agile performance management differs from conventional performance management is in its focus. With conventional PM, the business is the focus. What is the employee doing to benefit the business? Is a particular behavior hurting the business? How are your goals helping to move the business forward?

In agile performance management, the situation is reversed. It’s focused on the employee, rather than the business because there’s an understanding that if something benefits the employees, it also benefits the business. However, it goes deeper than cultivating altruism.

In the past, performance management reviews were one-size-fits-all. Everything was expected to suit everyone. Of course, we know the lie of that.

Everyone’s different. Each employee has different needs, requirements, personalities, personal and professional goals, and even work styles. Because of that, your performance management efforts need to be customized to each individual.

What this means is every check-in, every conversation, and every other meeting or decision should be based on information about the specific employee in question. Some of the things you’ll need to determine include the following:

Answering these questions is critical. With that information, you can help guide employees forward and their results will support positive business outcomes. Without that information, you’re flying blind.

Aggregating Information

In the conventional performance management paradigm, information is aggregated chaotically. It comes from different places at different times, and there’s very little effort made to organize, sort, parse, or cleanse it. That’s problematic to say the least.

You’ll get some information from an annual 360-degree review. You’ll get more data from random surveys sent out. Other information may come from a customer or client, and coworkers may offer yet more data.

Essentially, information is gathered here and there, and only occasionally. How well does that support informed decisions or help you create an accurate image of employee behavior and competence? It doesn’t.

In contrast, agile performance management focuses on creating organized streams of information so that you can update records regularly. It’s about creating an accurate, timely picture of employee performance through intentionally designed streams of data.

Agile Performance Management Helps Align Interests with Outcomes

All too often, performance management is focused not on helping employees change situations, but on punishing them for falling short. It’s punitive. Instead of finding ways to help team members, managers are focused on firing those who don’t meet performance expectations.

There are several problems with this. One of those is that employees see and understand this focus. It demotivates them. It frustrates them. It leads to disaffection, dissatisfaction, and employee defection to competitors.

Another problem is that this focus on punitive measures weakens the team. It promotes backbiting and infighting and doesn’t provide any support for employees who could be incredibly valuable allies if just given a little bit of help. Agile performance management takes a different approach.

Rather than focusing on identifying the lowest performers so they can be punished or fired, agile performance management focuses on aligning management’s interests with helping team members. When managers actively want to help, things change dramatically, and in a very short period. Employees also see this and it motivates them to perform better. That improves morale, mood, and even company culture.

Over time, it also becomes possible to align employee interests, talents, and future skills development with business goals and objectives. For instance, as a manager works with an employee to build their skill set, an understanding of their unique skill set and interests can inform their upward trajectory and allow them to enter new positions where their interests align with business objectives.

Does Agile Performance Management Really Matter?

For some business owners, decision-makers, and managers, the case for agile performance management might not be clear. After all, if the business is doing fine right now, why mess with it? Why change something that you might not believe is broken?

First, whether you see it or not, conventional performance management is broken. It’s business-focused rather than people-focused. Your business cannot succeed without dedicated, passionate people at the helm.

Second, there’s solid proof that agile project management can have a profound effect on businesses, even when they’re running well. It’s not just something that troubled organizations should consider. Instead, it’s a positive force for good in all organizations. Some of the key benefits and advantages include the following:

As you can see, agile performance management delivers critical advantages and benefits, increases profitability, decreases employee churn, helps you retain key talent, and even bolsters employee satisfaction. Those benefits have knock-on advantages. For instance, happier employees create happier customers or clients. Happier employees equate to a better corporate culture, which in turn attracts higher caliber talent.

It’s a win-win situation. So, what are you waiting for? There’s never been a better time to put APM to work in your organization.

Putting Agile Performance Management to Work in Your Organization

Interested in putting agile performance management to work in your organization? It can deliver critical benefits, foster a collaborative environment, and build a more positive work culture. However, there are a few things that you’ll need to know.

First, make sure that you have everyone on board. What we’re talking about here is a major shift in organizational strategy, and that requires adoption at all levels, from the rank and file to HR to the C-suite. Managers will need to understand the importance and value of the APM method, while employees will also need to know how things will affect them. Take the time necessary to foster clear communication with all stakeholders to reduce resistance and challenges.

You also need to understand the importance of training. Agile performance management implementation requires more than just a conscious decision. It requires training and education at all levels. Managers will need to be trained, HR staff will need training, new systems will need to be installed and employees will need to be trained in its use, and more.

Finally, you need to shift to allowing employees and their managers to set SMART goals that align with their immediate needs, rather than 12-month, long-term goals. Create systems that encourage regular check-ins and foster conversations. Provide opportunities for employees to develop themselves professionally and personally by tying your agile performance management system into your L&D initiatives.

Frequently Asked Questions about Agile Performance Management

While we’ve covered a lot of information about agile performance management, chances are good that you still have some questions. We’ve compiled some of the most frequently asked questions below.

  1. How do I implement agile performance management in my company?

While there are ways you can do it manually, our recommendation is to use agile performance management software. Ideally, this software will tie in with your learning management system, providing your teams with a seamless experience and helping to ensure there are optimum development opportunities for everyone.

  1. Why is there so much focus on conversations and checking-in with employees?

While to some managers and decision-makers, agile performance management might seem to take more time, the converse is true. By frequently checking-in and starting real, meaningful conversations with employees, you’re able to achieve some pretty critical goals. For instance, weekly check-ins ensure that employees can put feedback into action immediately, which addresses problem behaviors in real-time. By creating conversations with employees, managers can provide guidance, constructive criticism, and development opportunities when it matters most, creating stronger relationships and retaining and developing key talent.

  1. Why should employees focus on individual goals rather than team, department, or organizational goals?

In APM, there is a focus on setting goals for all levels, but individual goals are the foundation for everything else. Both managers and employees must understand how individual goals fit into the team and department goals, and how those goals tie into organizational objectives. Everything is connected, and by ensuring that your employees see those connections, you empower them, lift them up, improve their performance, and increase their sense of both self-confidence and capabilities. With agile performance management, managers work one-on-one with employees to set SMART goals and move the entire organization forward.

  1. Does APM do away with tying compensation to performance reviews?

Yes, most organizations that adopt agile performance management stop tying performance to compensation. One reason for this is that check-ins happen very quickly, rather than once or twice a year. Another reason is that when you take compensation out of the equation, employees generally feel freer (and safer) to do their best work. They take chances and push themselves in new ways. Plus, with ongoing, regular feedback from a manager trained to help them grow, those efforts are amplified in ways that older performance management methods cannot deliver.

  1. Can agile performance management work for my SMB?

Yes! Agile performance management can work in virtually any organization, although you will need to take a case-specific approach. Working with eLeaP can help ensure that you get the tailored approach necessary for success.

Conclusion

Agile performance management offers significant benefits when compared to the conventional method. Employees are free to push themselves, while management provides real-time feedback that informs immediate behavioral modification to drive optimum results. In comparison to the conventional performance management system, it’s more flexible, better able to help businesses achieve mission-critical objectives, and more sustainable over time. It can even help ensure that you’re able to develop talent in-house, promote from within, and build a culture of development within the business.