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In an era where dynamic workplace demands are redefining employee evaluation, continuous performance management (CPM) has emerged as a progressive alternative to traditional performance management systems.

This article delves into how CPM can revolutionize performance management in your org and push team members to greater heights.

Key takeaways:

  • CPM contrasts sharply with the annual appraisal model, paving the way for more engaged, adaptive, and productive work environments.
  • Key benefits of CPM include enhanced employee engagement, better feedback, improved goal alignment, increased agility, and stronger manager-employee relationships.
  • To work, CPM requires real-time feedback, regular communication, and modern performance management software.

What Is Continuous Performance Management?

Continuous performance management (CPM) is a modern approach to employee appraisal and development that focuses on ongoing communication and feedback between managers and employees.

It’s a departure from traditional performance management systems, which often rely on annual performance reviews, toward a system of ongoing, regular feedback that’s instructive, constructive, and celebratory.

What are the benefits of continuous performance management?

graphic showing the statistic that 96% of employees agree that corrective feedback is effective

The above stat, courtesy of LinkedIn, tells us that the vast majority of employees recognize that feedback improves their performance.

People crave regular feedback, and it’s important for growth and development. Continuous performance management means people get the feedback they need. 

Related to this, the numerous benefits of CPM include:

  • Enhanced employee engagement: Regular feedback and discussions ensure that employees feel heard and valued. This ongoing engagement helps boost morale and job satisfaction.
  • Real-time feedback and development: CPM allows for immediate feedback, enabling employees to adjust and improve quickly.
  • Fosters a culture of continuous learning and development. When feedback is shared freely and regularly, learning and development will permeate through the culture.
  • Improved communication: Continuous dialogue between managers and employees enhances transparency and understanding.
  • Better goal alignment: With CPM, goals can be reviewed and adjusted regularly. This ensures that individual goals are always aligned with the changing needs and objectives of the organization.
  • Increased flexibility and agility: The dynamic nature of CPM allows for quick responses to changes in the business environment. Teams can adapt their strategies and goals more efficiently.
  • Faster problem identification and resolution: Regular check-ins help identify issues early, allowing for quicker interventions to resolve problems before they escalate.
  • Recognition of achievements: Continuous performance management provides opportunities for acknowledging and celebrating achievements.
  • Enhanced productivity: With clear, regularly updated goals and consistent feedback, employees are more likely to stay focused and productive.
  • Reduced stress and anxiety: The traditional annual review process can be stressful for employees. CPM's frequent interactions reduce the pressure and anxiety associated with performance evaluations.
  • Stronger manager-employee relationships: Regular interactions help build stronger, more trusting relationships between managers and their teams.
  • Data-driven decisions: Ongoing tracking of performance provides a wealth of data that can be used for making informed decisions about training needs, promotions, and other HR-related actions.
  • Facilitates personalized employee growth: CPM allows managers to tailor development plans to the individual needs and career aspirations of each employee.

How To Get Started With Continuous Performance Management

Companies like Accenture are already ditching annual reviews and looking forward. 

Implementing continuous performance management in an organization requires a strategic approach, commitment from leadership, and a shift in organizational culture.

Get leadership buy-in

Ensure that the leadership team understands and supports the shift to continuous performance management. Their commitment is crucial for driving the change across the organization.

Define objectives and framework

Clearly define what you aim to achieve with CPM. Establish a framework that outlines how often performance reviews will occur, the format of feedback, and the process for setting and revising goals.

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Train managers and employees

Educate managers and employees about the principles of continuous performance management. Training should cover how to give and receive feedback effectively, set realistic and dynamic goals, and conduct productive check-ins.

Establish regular check-ins

Ensure managers schedule regular one-on-one meetings between them and their direct reports. These should be structured to discuss progress, address challenges, and review short-term and long-term goals.

Nurture a feedback culture

Nurture a culture where feedback is frequent, constructive, and a regular part of daily work. This should include both positive reinforcement and constructive criticism.

Use technology to facilitate CPM 

Adopt technology platforms that support continuous performance management. These tools, such as goal setting software, can help track goals, provide real-time feedback, and document discussions and progress.

Shift to short, more dynamic goals

Where possible, shift from static annual goals to more dynamic, short-term objectives that can adapt to changing business needs. 

Ensure that these goals are aligned with the organization's overall strategy using the cascading goals method.

Case Studies: How Continuous Performance Management Can Improve Alignment, Retention, And Engagement 

Still doubtful that CPM can benefit your organization? Here are some real-world examples of CPM helping to transform organizations.

How Adobe’s switch to regular check-ins boosted employee engagement

Overview: Adobe realized its performance management system was ineffectual and consumed about 80,000 management hours each year.

Key Strategies: 

  • Replaced annual performance appraisals with regular one-on-one check-ins and frequent feedback.
  • Abolished forced ranking and performance ratings and refocused to how well employees meet their goals.

Outcome: There was a marked increase in employee engagement and a 30% decrease in voluntary turnover since the introduction of the check-ins, indicating enhanced productivity and a more motivated workforce​​.

How Fossil Group’s switch to regular performance reviews improved alignment

Overview: During their switch to a new digital performance management system, Fossil Group noticed a misalignment between individual and organizational goals.

Key Strategies:

  • Scheduled ongoing performance conversations and continuous feedback.
  • Created intuitive goal conversation templates.
  • Used recognition to keep performance conversations fresh.

Outcome: 92% of employees participated in goal-setting reviews, setting an average of six goals per employee, indicating a more engaged and aligned workforce​​​​.

Continuous Performance Management Best Practices

CPM will require some adaptation. Here are some best practices to ensure an effective CPM system

Regular and consistent check-ins

These should be consistent in terms of frequency and format, creating a reliable structure for ongoing dialogue.

Clear goal setting

Establish clear, measurable, and achievable goals aligned with the organization's objectives and adaptable to changing circumstances.

Objectives and key results (OKRs) is a framework I’ve been using for years. I like it because it provides a tactical and metrics-driven set of goals that we’re all working toward. 

That’s very helpful at the end of a quarter, half, or year for an employee's performance appraisal.

Create psychological safety

Open and honest feedback is dependent on an environment where employees feel comfortable sharing their thoughts and feedback. 

Psychological safety means creating an environment in which all employees feel comfortable to offer feedback and contribute ideas.

Provide training for managers and employees

Provide training on how to give and receive feedback effectively, set goals, coach, and use any technology tools involved in the process. 

Utilize technology

Implement user-friendly technology solutions like OKR software to facilitate goal tracking, feedback, and record-keeping.

Incorporate recognition and rewards

Acknowledging achievements, behaviors, and milestones goes a long way to boosting employee motivation and engagement.

Employee recognition platforms are useful tools for helping to automate this.

Get Started With Continuous Performance Management

As author Zig Ziglar once said, “The only thing worse than training employees and losing them is to not train them and keep them.”

If you only do an annual appraisal of your team once or twice a year, consider how you can track performance more regularly.

And if you can continuously do that, you can coach, give feedback, and manage performance continuously. 

It’s not an easy change but it’s the most effective thing you can do as a people leader right now.

For further support in perfecting performance management in your org, join the People Managing People Community, a supportive community of HR and business leaders sharing knowledge to help you progress in your career and make greater impact in your organization.

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Eric Grant
By Eric Grant

Eric Grant has 12+ years in Learning & Development managing programs and teams in high-growth environments at organizations such as LinkedIn and Coinbase. To add greater depth to his practice, he's currently pursuing his Masters in Analytics where he’s focused on how to leverage data science to unlock human potential.