6 Performance Management Best Practices Backed by Research

what is organizational cultureUsing outdated approaches to performance management doesn’t help employees reach their full potential. In fact, flawed performance management hurts employee engagement levels and hinders business success. Employees crave fairness, transparency, and ongoing coaching and feedback. When leaders prioritize these things, employees feel connected to the rest of the organization and can do their best work. Our research shows what an engaging performance management approach looks like. 

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What is performance management?

 

Performance management is the process leaders use to measure, develop, and motivate employee performance. The process should be ongoing to keep a constant pulse on individual, team, and company-wide performance. With continuous performance management, you can empower and engage employees to drive goals and objectives critical to business success. Here’s how: 

 

Helps managers address obstacles and opportunities as they come up

When managers keep a pulse on employee performance, they can tackle problems and get their teams back on track. They can also outline opportunities that align with each employee  to capitalize on strengths and close skill gaps. 

 

Makes employees feel heard, valued, and recognized

Recognition makes employees feel valued in their role. When employees feel valued for their efforts, they’re likely to continue the key actions and behaviors that drive success. When employees don’t feel valued at work, they’re likely to lose motivation and eventually burn out.  

 

Connects employees to organizational goals and purpose

Regular performance conversations help leaders outline the bigger picture. When employees understand how their daily initiatives make an impact, they feel more connected to their work and its purpose. When employees feel connected to a purpose, they’re more likely to make an impact.  

 

Supports a healthy company culture

Your company culture is all about the way you get work done at your organization, and your approach to performance is a key part. When you coach employees in a way that motivates and engages them, with ongoing feedback, recognition, and goal alignment, you’ll foster a culture that employees can thrive in. 

 

Promotes employee growth and development

A good performance management strategy helps employees grow to reach their full potential. Leaders can use performance management to address skills gaps, outline growth opportunities, and bolster employee strengths. It helps managers understand when an employee might be ready for a new project or role. It helps employees feel like the organization is invested in their development and career growth.

 

Shapes strategic people decisions

When you understand the big picture behind employee performance, you can make decisions that empower employees across the company. An effective approach to performance will help you identify performance impact, growth potential, and retention risk. When you keep a pulse on these metrics, you can give your employees the tools they need to succeed. 

 

Drives employee retention

Your approach to performance makes all the difference in the employee experience. And the employee experience is a key indicator of whether your employees decide to leave or not. Performance management can be used as an ongoing tool to strengthen employee retention and keep your key players. 

 

Top performance management trends for 2022

 

Considering the benefits of an effective approach to performance, it’s key for all leaders to shape a strategy that works at their organization. But with the ever-changing nature of the workplace, it can be difficult to know what is most effective when it comes to performance management. We’ve collected data from 32,000 employees around the nation that outlines their preferences. Here’s the top trends in performance management for 2022:

 

1 in 3 employees want weekly 1-on-1 conversations

When employees were asked how often they meet with their manager to discuss priorities, performance, and development, most said they meet weekly—and prefer it that way too. In fact, over 1 in 3 employees want to have a 1-on-1 conversation with their manager every week. Gone are the days of annual or quarterly performance conversations. Employees want to meet with their manager regularly.

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Continuous 1-on-1s are associated with elevated engagement levels

Your employees are more likely to be engaged when you meet with them often. In fact, over 70% of employees who have weekly performance conversations are highly engaged. As 1-on-1 cadence decreases, so does employee engagement.

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Hybrid and remote workers prefer to have more frequent one-on-ones with their managers

Different work environments require different approaches to performance. In fact, hybrid and remote workers are more likely than their onsite counterparts to want weekly 1-on-1s. 43% of remote workers and 37% of hybrid employees prefer a weekly cadence, compared to 27% of onsite employees. 

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Frequent and collaborative goal setting is associated with higher employee engagement levels

When employees said their team sets goals collaboratively, over 70% were highly engaged. Plus, of the employees who said goals were set weekly, roughly 80% were highly engaged. As collaboration and frequency decreases, employee engagement levels follow suit. 

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Recognition, fairness, feedback, and alignment are the top drivers of employee engagement

The traditional aspects of performance management, like ratings, rankings, and pay-for-performance don’t engage employees. Recognition, fairness, and goal alignment are the true drivers of engagement. The way you approach performance management has a major impact on the workplace experience, strongly influencing employee engagement.

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6 Performance management best practices 

 

The performance management research above can help leaders across all industries create an engaging approach to performance. Keep these performance management best practices in mind when shaping your strategy.

 

1. Conduct continuous performance management conversations

Employees want to have frequent one-on-ones with their manager. When one-on-ones happen frequently, teams are more likely to be aligned, efficient, and engaged. While weekly one-on-ones are preferable, ensure you’re holding these conversations at least monthly. With a high meeting frequency, managers and employees can address challenges, questions, and concerns as they come up. 

 

2. Prioritize collaborative and frequent goal setting

When goals are set collaboratively and frequently, employee engagement increases. Managers should set goals with their teams or individual employees—managers and business leaders shouldn’t set goals alone. Aim to set these goals every week to every month with your people depending on current business objectives.

 

3. Recognize employees for their efforts

Employee recognition is associated with strong employee engagement levels. That’s why leaders should always provide recognition for employee contributions. Acknowledge employees when they achieve goals, showcase increased effort, and practice valued behaviors. Not only will your employees' engagement levels increase, but they’ll have the motivation needed to continue their efforts in the future

 

4. Give regular performance feedback

Employees need feedback that helps them improve. Employees are likely to be engaged when they receive effective feedback from their managers. That’s because helpful feedback fosters a culture of trust and supports employee growth. Ensure your feedback outlines tools and strategies for employees to improve.

 

5. Evaluate performance fairly

Research shows that fair performance evaluations are a top driver of engagement. That’s why leaders should prioritize honest and inclusive feedback. Ensure you communicate the “why” behind each evaluation and give employees the opportunity to voice their opinions too.

 

6. Align employee and organizational goals

Goal alignment is a key indicator of employee engagement because employees need to understand how their efforts contribute to the big picture. Outline why each goal is set and how it contributes to business outcomes. When employees understand why their efforts are important, they’re much more likely to give their full effort day-in and day-out. 

 

How technology supports your performance management strategy

 

Less than one-fifth of HR leaders believe their approach to performance management is effective right now, and 81 percent of leaders are changing their performance management system. A large shift is happening, and the best leaders leverage tech to navigate it. Here’s how performance management tools can help you:

 

Goals

A robust goal feature helps teams set, track, and elevate goals to the entire organization. That way, every employee can see the big picture behind business objectives. 

 

Recognition

An effective recognition tool will help people across the organization celebrate each other. The right software will connect recognition to key goals and values, motivating employees to continue important behaviors. 

 

1-on-1s 

One-on-one meeting software facilitates employee manager conversations, increasing clarity and communication. Leaders can launch a 1-on-1 anytime, from anywhere, and integrate goals and feedback for better conversations. 

 

Feedback

A two-way feedback solution will help your employees become better team members and managers become better coaches. With flexible frameworks, employees and managers can ask for or provide feedback to grow in their role. 

 

Talent reviews

To make strategic people decisions, leaders need to understand the overall state of their talent. With an intuitive talent review tool, leaders can elevate top performers and talent risk to take the right action and grow. 

Consider these performance management trends and best practices when shaping your approach. By coaching performance with employee engagement in mind, you’ll help employees reach their full potential and drive consistent business outcomes. 

 


Ready to maintain business success through performance management? Download our ebook, The Business Case for Modern Performance Management and learn how to conquer your challenges. 

Business Case for Modern Performance Management