Everything you need to know about performance management

There’s a lot of buzz in the HR space around the term performance management. But what is it, and how can companies use it to gain a competitive advantage?


Performance management is actually a segment of the broader HR discipline, talent management. While talent management encompasses everything from recruiting and onboarding to compensation and succession planning, performance management is focused on optimizing the workforce you already have by:  


  • Delivering continuous feedback
  • Setting and tracking goals
  • Recognizing employees for their efforts
  • Providing ongoing development opportunities


At its core, performance management is about improving employee engagement and productivity. And feedback plays a major role in making it happen.


Continuous feedback: performance management’s cornerstone


The annual review is quickly headed for extinction, thanks to the speed at which technology, work, and life as we know now move. Instead of waiting 12 months to address an issue, tweak goals or even recognize achievement, managers should give feedback on an ongoing basis.


Not only because it makes sense from a timing perspective. But also because the soon-to-be-dominant players of the modern workforce — millennials — need constant feedback from managers. Weekly feedback is the desired cadence for these digital natives who are used to the instant gratification of online gaming and the internet.


However, if weekly meetings with each team member are out of the question, monthly employee check-ins, or 1:1s can also deliver:  



Whether monthly or weekly, these 1:1s should do more than cover the tasks at hand. To maximize effectiveness, include these topics:


  • Goals
  • Recognition
  • Current work
  • Future roles
  • Feedback
  • Tasks


But feedback from the manager alone only gives employees half of the story.


Extra points (and motivation) for comprehensive feedback


Some performance tools empower managers to collect team feedback on individual players through peer assessments. And in a study by employee motivation firm, Make Their Day, 76 percent of employees found that positive feedback from their peers was very motivating.


The results of these peer assessments can also be used to determine areas of improvement for the team as a whole — helping identify any skills gaps that can be addressed with additional training, or even new hires.


No matter how glowing peer feedback may be, employees will still need concrete goals to help them do their best work for your organization.


Where to start? Performance goals for managers


While performance goals will need to be tailored to each individual team member and role, there are ways to easily set, track, and review performance goals.


  • Start with the overall company goals - to truly be effective, you must first know where the company wants to go. Then drill down on how your team fits into the big picture. From there, define goals for your team as a whole.


  • Assess where you are now - before setting individual goals, it’s best to see where your team currently stands in competencies, skills and output. Use peer assessments and quizzes to test worker knowledge, and historical data to gather output metrics for individual players. This information can help ensure that when setting goals for each employee, you are delivering on the “realistic” and “attainable” components of S.M.A.R.T. (specific, meaningful realistic, attainable, timely) goals. Your performance management software should make it easy to set these goals in ways that are easy to track.


  • Communicate these goals clearly (and often) - setting these goals isn’t enough. You’ll also need to communicate them regularly during employee 1:1s. Your performance software should provide constant visibility into what their S.M.A.R.T. goals are and how they are progressing.  


  • Track progress weekly or monthly - employee check-ins are the perfect platform for assessing progress and making any necessary adjustments. Your performance management software should also be used to:


  • Adjust goals based on the circumstances - being realistic about goals can only get your team closer to attaining them. Use performance management tools to increase or decrease the goal as needed.
  • Recognizing and reward progress - 69 percent of workers said they would work harder if they felt recognized. Recognition doesn’t have to be a big ordeal, a simple “great job!” during a 1:1 can go a long way.  
  • Providing additional support as needed - whether it’s a tweak to the sales process, reinforcement of company goals or even additional training, give employees what they need to reach the finish line.


  • Keep your eyes on the big picture - having the ability to look ahead as well as backward into performance history can be very telling on the team and individual levels. These insights into the entire team’s employee timeline can inform a range of business decisions, including staffing moves, promotions or even future goal-setting.



Tools of the trade: Performance management software


Countless performance management tools are available with various bells and whistles. But what does your organization really need? That all depends on your goals and HR processes. However, the key functions of any performance software solution should be to increase employee engagement and productivity.


When evaluating multiple performance software providers (which you should), be sure you’re comparing apples to apples by focusing on these key features and benefits.


  • User-friendliness / ease of use - no matter how much the software is capable of doing, if it’s too complicated, it will not be used. Look for options that have simple interfaces for all users — from HR leaders to managers and employees.


  • Robust reporting - when done properly, analyzing performance data can lead to improved business decisions across the board. Make sure your solution supports easy reporting on the metrics that really matter to your organization.


  • Integration with other needs / platforms - while not every app or component needs to integrate, having the capability to sync goals to Salesforce and other sources is key, as well as having the ability to link learning and development to individual goals and 1:1 meetings.


  • Superior support - of course, questions will come up from time to time. How responsive will the customer service team be to your specific needs? Some providers offer a dedicated account manager in addition to tech support to offer strategic support as well as tech-specific situations.


  • Continuous innovation - search for a performance management software partner that will evolve along with your organization’s needs, without charging you for costly upgrades to receive the latest product features and innovations.


Whichever performance software partner you choose, make sure it’s more of an ally than adversary in helping you track, measure, report, and engage your workforce.


There’s definitely an art and science to effective performance management. Fortunately, performance management software can do much of the heavy lifting for company leaders, providing the structure, accountability, visibility, record keeping and consistency required for effective feedback conversations. This allows managers to remain focused on what they can most effectively bring to the table — planning, feedback, recognition, adaptation, and most importantly, trust.