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Evaluating performance at work is an essential skill of managers, and this process is assisted by HR leaders who develop the methodology and cadence for performance evaluation and performance management.

Across organizations, different methodologies have been used to evaluate performance, with mixed results. 

In large, highly competitive organizations, rigid performance evaluation programs are commonplace, some of which result in a continuous attrition of low-performing talent. 

This “rank and yank” methodology rates employees and removes the lowest-performance portion. While this seems to some like the right idea, this is generally not a great model for performance management in growth-focused organizations.

Organizations looking to grow and develop their talent implement performance management processes and systems that focus on identifying strengths, developing people, and promoting performance among a diverse employee base.

I’ve worked in multiple organizations with varied and evolving performance management models. 

In this article, I’ll pull from my experience across performance management methodologies along with my focus on learning, motivation, and employee development to share five techniques to improve performance management in your organization.

We’ll cover: 

  • Effective goal setting
  • Performance reviews
  • 360-degree feedback
  • Continuous performance management
  • Performance-based compensation
  • Tools for managing performance

5 Techniques for Effective Performance Management

Quarterly goal setting

Managing performance within your organization requires a keen focus on creating systems that motivate employees to achieve both the individual and collective goals of the organization. 

In order to evaluate performance, it’s great to know what someone was trying to achieve! 

Performance, at its root, is the demonstration of goal-directed effort. Simply put, if you don’t set goals or expectations for delivery, it will be challenging to evaluate performance. 

When you evaluate performance, you should always look at the goals that were set and consider if they were achieved. To achieve goals is to perform, so goals should always be a consideration for performance. 

Personally, I happen to be a total nerd about goals. In fact, I have an organization-wide goals methodology that I live by.

Check out my article on cascading goals to learn how to set goals in your organization starting from the top-level organizational goals, and then cascading those goals down to teams and individuals. 

When evaluating an employee’s performance in achieving goals, consider some of these three items that might come into play:

1. Too long a time frame

If goals are set on too long of a time horizon, they may become irrelevant. Instead, set goals quarterly and, at the midway point of the quarter, check in on the goals to ensure they’re correct and relevant to the current organizational strategy.

Try not to set individual goals that span longer than one quarter. If you are tempted to do this, break a bigger goal into smaller parts and set the smaller parts as the quarterly goals.

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2. “Goals” that aren’t really goals

If goals are not really “goal-sized,” as in if they aren’t really goals just tasks, then it’s the manager’s responsibility to work with each individual and team to determine goals.

If a team is transactional, such as call center workers or support personnel, consider setting goals around quality, such as customer feedback, NPS or other key performance indicators (KPIs) or metrics.

Example of a bad goal: “Complete onboarding training” 

Example of a much better goal: “Complete company onboarding and become comfortable with work systems.

Complete all required onboarding training, document the main systems that are used in executing this role effectively, and publish the results to the team documentation space. 

Once fully onboarded, provide at least three suggestions for making onboarding better in the future for this specific role. 

Goal to be measured by the completion of training in the LMS, documentation of main systems in the team knowledge base, and submission of three suggestions for onboarding improvement to the team lead.”

3. Dependencies

People can share goals, and some individual goals will be reliant on others for completion. 

If you are in the position of evaluating goal completion where your employee did everything they needed to, and everything they could to try to accomplish the goal, but they were not able to because of lack of performance of someone else, a few tips come to mind for managing this situation.

Missing a goal because of a lack of delivery by someone else (not your employee) should not be a surprise. 

Managers should be having conversations with their employees about their goals throughout the goal delivery period, so if a goal is not going to be met because of a dependency, this should never be a surprise at the end of the goal delivery period (hopefully quarterly!).

People need to be taught how to handle others not contributing what they promised, and if that doesn’t work, there needs to be enough information about what is not happening to be able to approach the leader of the individual who is blocking goal attainment for your employee. 

Yes, this sounds somewhat political and managerial, but it’s important that managers know what’s going on, and it’s important that the manager of the person who’s blocking goal completion for your employee is aware of the challenge and has the opportunity to contribute reasoning or effort to achieve the goal.

It’s not fair to significantly negatively impact your employee’s performance evaluation because of a failure outside of their control. Once you’ve understood the blocker and talked with the manager of the individual that is blocking progress, it’s important for you and your employee to consider what happened, what (if anything) they could have done differently to achieve the goal themselves, and what is reasonable for their own goal attainment noting the challenge. 

In most cases, when I’ve done my diligence in confirming that my employee did everything they could have done to achieve the goal, I give them the performance credit for the goal.

Note: When goals are a primary focus for an individual and are a mechanism to direct the effort of employees, it’s essential to ensure that the things that are important for you and your team are known to other people and teams that will need to contribute to achieving the goals. 

The last thing you want is for you not to hit your goals because you needed something from another team, but they were too busy with their own goals to help you out. 

This problem is addressed in the cascading goals method and always benefits from some good ol’ communication and cross-functional planning.

When you get into cadence with this method, you might even find yourself having a pre-goal delivery period meeting with the teams you work closest with to ensure everyone knows what is most important for each other and can align on how to get it all done! 

Once you have set goals and are ready to evaluate performance against them, the other elements that you would bring into performance reviews are skill and behavior.

I recommend focusing on either skills or behaviors in individual performance reviews because blending the objective (skill) with the much more subjective (behavior) has a tendency to introduce significant opportunities for bias. 

Across all performance evaluations, be sure to check yourself for bias. If you’re an HR leader, it is your job to both teach and practice effective performance management while mitigating bias.

Bi-annual Performance reviews

When you think of performance reviews, you probably think about a process that happens periodically in your organization where formal feedback is given and received. You’re right! 

That’s exactly what we’re talking about here. 

Performance reviews are probably the most formal evaluation exercise your company conducts with individual employees, and they typically happen annually (annual reviews) or once every 6-months (semi-annual reviews, also my preference).

When performance reviews are conducted, managers and employees document and discuss the employee’s performance during the review period.

In many cases, employees are given a rating for their performance during the review period. 

Rating scales can vary across companies and performance review methodologies (more about that later). 

Building a performance review system typically involves these elements: 

1. Cadence

For most companies, the review period is 6 months or 1 year, though some companies have implemented a quarterly performance review cadence.

The trick here is balancing the time it takes to complete performance reviews and the frequency which formal feedback needs to be provided. 

My personal preference is a 6 month review period, meaning performance reviews happen in mid-July and late-January.

2. Format

Performance reviews often include both a self-evaluation (everybody does this, and reflects on their own performance and contributions in the review period) and a manager evaluation (manager evaluates their direct reports). 

The best organizations I’ve been part of also use peer feedback (aka peer reviews) to give managers a clear picture of the individual’s performance, and that feedback is typically incorporated into the manager’s review of the employee.

3. Visibility

In many cases, an employee completes a self-reflection which is then sent to their manager for review, and then the manager writes their evaluation of the employee. 

Personally, I don’t like this method because it enables managers not to have to really think about an employee’s performance because the employee submits their self-reflection for review as an input to the manager’s evaluation. 

Instead, I much prefer double-blind performance evaluations where both the manager and employee create their performance review by themselves, and the results are displayed to each other at a set time/date, typically just before the live conversation about performance. 

What’s neat here is that this method clearly identifies when managers and employees are in or out of sync on perceptions of performance, and each party is challenged to really think critically about the individual employee’s performance in the review period without the influence of the self-reflection feedback.

In other words, this method can mitigate bias and help employees feel like their manager actually cares about and notices their performance rather than just taking what they wrote in the self-reflection and adding comments or re-wording it. 

4. Questions 

The questions that are included in a formal performance review vary widely company-to-company and should be aligned with the culture, spirit, and goals of the organization. 

The questions included in a review will vary depending on whether employees need to do a self-evaluation or not, along with what managers are looking to focus on and give feedback about. These questions should be growth-focused and company-values-aligned. Questions on the performance review are typically set by the HR team.

5. Ratings

Often, ratings are used in performance reviews to help clarify the perception of performance for each individual and provide a consistent way to identify the overall performance of employees within the organization. 

Often performance rating scales are built into performance management tools, but they can be home-grown. Some of my favorite scales include rating scales such as: 

  • Scale 1 (low to high rating): Needs improvement, successful performance in some areas, successful performance, excels in some areas, exceptional performance
  • Scale 2 (low to high ratings): New to role (not bad, just new), improvement needed, brings it home, rising star, game changer
  • Scale 3 (low to high ratings): Needs development, often meets expectations, sometimes exceeds expectations, always exceeds expectations, and sets a new standard of performance

Which scale you select should depend on the culture and values of your organization. 

One thing is consistent, however, whichever scale you pick, you must provide training for both employees and managers on what the scale ratings mean, including providing examples of performance at each level of performance. 

6. Discussions

Expectations for what to do after reviews have been written should be set across the organization for each and every employee/manager relationship.

A best practice is for each manager to set a 30-60-minute meeting with each of their direct reports to review the performance feedback, answer questions and, if necessary, build action plans for the next review period. 

As a manager, these are some of the most important discussions you will have with your direct reports, and they are also the discussions that make direct reports most nervous. 

If you need help considering this conversation, or if you are a manager getting ready to complete performance reviews for your team, I created a performance review guide to help you get to the point with your feedback while mitigating bias.

Note: Often, calibrations are part of performance reviews. This is typically done by HR teams or high-level managers in the company. 

360-degree feedback

360-degree feedback is a performance management technique that allows employees to better understand how they are viewed and valued by others in their organization, at any level, and within any department.

This is done by using confidential, anonymous feedback from managers, peers, and direct reports.

In this process, individuals are typically asked to identify 4-10 people they feel they work closely with and would be able to give an effective review of their performance. 

These people, in addition to the employee’s manager and any direct reports, are then asked to complete a 360-degree feedback questionnaire.

There are some pros and cons to this approach. 


Employees can select anyone from any department of the company, at any level to give feedback. Hierarchy, reporting relationship, and tenure don’t always matter here. 

Note that employees with direct reports should always include their team and the individual employee’s manager should always be included. 


Employees can pick people they know like them, or people that they have only had positive interactions with. 

AKA, they pick the people they are friends with, making the feedback significantly biased. You could say that managers or HR would catch when people just pick people to review them that they are friends with, but you would be wrong. 

What happens is that either the manager or HR rep doesn’t catch that the people selected may be biased, or they don’t want to challenge the selections and have a hard conversation. 

What can be done about this? Lots. 

There is a better way to select people to participate in 360-degree feedback than just asking the person who is being reviewed. 

Instead of asking the person being reviewed to submit names, think about the projects they work on, who they interact with, and who they collaborate with at work to achieve the goals of the organization. 

If you’re close enough to this person’s work to be able to determine a diverse group of colleagues to include in the feedback round–great. If not, you might want to consider a data-driven approach to selecting 360-feedback participants. 

At Invitae, a publicly traded biotechnology company, they fixed this problem by building a system that used work collaboration data to identify who works closely together. 

In other words, they looked at the tools they use as a company to communicate and collaborate such as Google Workspace (Emails, Meetings), Microsoft 365 (Teams, Emails, Meetings), GitHub, Slack, Salesforce, and Jira to identify links between team members e.g. through them sending emails or chats to each other, participating in meetings, working on deals or checking code in and out of the same repositories. 

Because they were able to systemically identify which employees collaborated together most often, they were able to identify who should really be included in 360-degree feedback evaluations in real time. They tested and saw amazing results with this methodology for soliciting feedback. 

Most notably, they found that by leveraging this work network-informed feedback method, they were able to uncover the stealth influencers in their organization, those that might otherwise be overlooked because of differences in self-promotion, friends at work, or other factors. 

These stealth influencers were highly productive and highly influential; many have become leaders in the organization, and the majority of stealth influencers turned out not to be white men.

If this is of interest to you, you can learn more about this by checking out a Podcast with the former CHRO of Invitae, the creator of this system, or check out this Harvard Business Publishing Case Study about Invitae’s success with network-informed feedback. 

Today, the system and methodology that enabled Invitae are available as a performance management suite with Performica.

Once you have your participants sorted out, each person who’s giving feedback completes an assessment and typically the HR representative and/or manager goes through that feedback with the employee it’s about, it might also be an input to performance reviews. 

Peer feedback can provide a better all-around insight into employee performance. However, as with other performance management techniques, it must be implemented in an overall performance management system to be effective. 

Also of note is that 360-degree feedback is used as a one-time development tool, but it is best utilized on a continuous basis.

Continuous performance management

Performance management is a continuous process, and continuous feedback helps bring about faster pivots and better outcomes. 

One of my favorite sayings related to feedback is: “I can’t fix what I don't know about…and I’d like to know about it now so I can fix it now instead of later when the opportunity is gone.”

Continuous performance management is a best practice for managers and leaders. What this means is not sitting on feedback, good or bad, but finding ways to weave feedback into conversations with employees continuously. 

When I teach graduate students how to be good managers and leaders, we spend an entire week talking about how their #1 job as a manager of people is to give feedback continuously and consistently, both good and bad. 

We get into this to the point where we set feedback targets for each employee, to be executed by their manager.

Each week, every employee needs at least one piece of feedback, good or bad. This feedback, both positive and constructive feedback, needs to be more than “good job” or “that email could have been better.”

It needs to be specific, focused on the task, related to the expectations of the role, and supported by what you can do to help them.

One of my absolute favorite books on managing people is Radical Candor by Kim Scott. Learn with Kim about how to give actually helpful feedback in this article: 6 Tips for Giving Helpful Feedback.

In small organizations, continuous feedback practiced consistently might be able to replace formal performance evaluations, but this doesn’t scale and won’t support the organization as it develops and needs to represent the performance of employees consistently for succession planning, merit bonus allocation, etc.

If you’re considering continuous performance management instead of a more formalized system, consider these pros and cons, and keep a watchful eye on the horizon of growth for your company.

Pros: Lightweight, easy to manage, potentially speeds up delivery of feedback.

Cons: Hard to track, likely lacking documentation, potentially inconsistent, often more biased.

The often more biased cons are especially important to note here because continuous performance management and continuous feedback is entirely reliant on the manager in giving feedback.

This means that all managers need to be exceptional at giving feedback, which is an unlikely reality in any organization. 

Worse yet, if managers are responsible for providing continuous feedback in a lightweight way with little oversight, it is likely that the feedback delivered will be impacted by the common traps of performance feedback, including those where some individuals receive different feedback from others based on the behavioral or skill archetypes associated with different individuals. 

Said differently, managers risk giving different feedback to different people based on their individual expectations of the person, which may include factors such as their gender, race, socioeconomic background and more. 

Further reading: Continuous Performance Management: Why + How To Do It

Performance-based compensation

Compensation is a loaded topic in most organizations, and performance-based compensation is even trickier to navigate.

Performance-based compensation is a methodology that aims to reward high-performance employees for their hard work, such as going above and beyond the requirements of their role. 

There are many different types of performance-based compensation models, some of which are more impactful than others. For example, individual incentive plans such as sales commissions are very common.

Bonuses based on company and individual performance are also common, where individual performance is typically measured by goal attainment. Merit pay increases, while seemingly routine, are also typically influenced by performance.

The idea behind performance-based compensation is, of course, to motivate employees to achieve results and demonstrate certain behaviors.

However, it requires clear, documented performance feedback and a solid performance management strategy that is implemented across the organization consistently.

While high-performers may enjoy the incentives brought about by performance-based compensation, this methodology is often flawed as performance evaluations that are not data-backed are inherently subjective and potentially littered with bias. 

Consider again those stealth influencers that Invitae identified in their journey to reducing bias in peer feedback. 

Under a performance-based compensation model, it’s possible that people who self-promote better than others will receive more pay because of an inflated perception of their performance which may or may not be the reality. 

At the same time, those who consistently deliver results but don’t boast about it as much as others may not be noticed as uniquely and may not receive adequate compensation for their real contributions to the organization.

Under this model, competition brews and becomes core to the culture of the organization. Some organizations might benefit from this, but, over time, this competitive culture will change the average employee profile within the organization.

In an environment where self-promotion is essential to receiving more money, self-promotion ramps up, bad news is minimized (even worse, sometimes ignored or hidden) and the organization’s lived values shift from doing the right things to grow the business to doing the things that will make the individuals within the business look good.

One note about creativity and innovation in performance-based compensation environments: it’s especially hard to be creative, innovate, and take risks in an environment that celebrates and incentivizes competition and avoids failure.

Innovation and creativity require failure, meaning you have the potential to minimize innovation and creativity if the compensation methodology does not support people taking risks and learning from their mistakes.

My view, of course, is just one of many. In some cases or departments such as sales, a performance-based compensation structure is expected, and employee engagement and retention depend on it. 

For this reason, this might not be a one-method-fits-all approach. Before considering implementing a performance-based compensation system, consider how you want your organization to act and interact, both with each other and with your customers. 

Use the appropriate tools

There are many different approaches and tools that can be used to measure performance.

At the most basic level, performance management can take place on paper, through an online form, or in a simple database. 

These methods are potentially effective, but they don’t scale well. If you’re a team of three, it probably makes sense not to over-engineer a performance management system. 

But, if you’re a group of ten or more, it’s time to consider what tools might help to enable your performance management process to be more consistent, fair, and effective.

If you’re just getting started, consider what can help managers in your organization provide feedback early and often, with documentation and clarity for employees. Employee morale is heavily influenced by the type of feedback they receive, so help your organization adopt a culture of frequent feedback and professional development.

Templates are a great way to start adding value to managers trying to practice good performance management.

Next, you might consider ensuring performance standards are known and documented across the organization such that they can be referenced in the organization-wide review process. 

Beyond setting expectations and giving managers tools to facilitate employee performance management, there are a number of software tools that can help out.

By Liz Lockhart Lance

Liz is a strategic leader focused on the intersection of people, process and technology. In her day-to-day she works as the Chief of Staff at Performica, an HR Software Company revolutionizing how people give and receive feedback at work. She also teaches an Operations Leadership course in the MBA program at the University of Portland and is working towards completing a Doctorate at the University of Southern California in Organizational Change and Leadership. Liz is certified as a Senior Professional in Human Resources (SPHR) by HRCI and has 15-years of experience leading people and teams across education, consulting and technology firms.