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The Fuel Your Performance Management Strategy Needs

Jason Diamond Arnold

August 30, 2018

Performance Management strategies are essential for any company. However, the traditional routes taken by business and organizations are dated and ineffective. These aged methods usually include an annual performance review which offers no constructive feedback or opportunities to improve until those are addressed.


Our recent webinar for HR.com was entitled “The Fuel for Optimal Performance Within Your Organization” and discussed what your company needs to make Performance Management a viable business strategy for your organization. The three main topics it covered were:

  1. The importance of modernizing your approach to performance management
  2. How to utilize performance analytics that align with your business analytics
  3. The use of effective language through feedback to boost performance and engagement

The Shift in Performance Management

In the past, performance management was merely a way to determine if an employee was deserving of a raise. There was no feedback or anything constructive about the meetings. In fact, along with annual reviews, traditional systems consisted of Key Performance Indicators (KPIs) and Performance Improvement Plans that were designed to either aid workers to get better or to escort employees out of the company.

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Performance management is not about simply checking boxes. New Motivational Science Research discovered that “laundry list” evaluations lead to more disengaged employees and less productivity. Which leads to the importance of a new way to manage employee performance. It is about continually monitoring and encouraging the performance of your employees so they become the best they can be. While in the traditional sense that reviews are an accountability tool, they must also be beneficial, customizable and collaborative for employees!

Only 21% of organizations have leaders who excel at effective performance management. But that number can improve because out of those companies that do not have an effective system in place, 45% of them believe they will introduce one or drastically change their ways! The question now is how do companies do so?

Modernizing Your Process

A major question that stumps managers is how to change a long-standing performance management method. In order to modernize your process, you need new tools and methods. Thankfully, technology has kept up with the ever-changing business landscape.

Here are a few statistics from HR.com regarding the use of technology for performance management systems:

  • 61.3% of companies use tools that are bundled into an HR management or information system
  • 31.3% use a stand-alone or single point solution
  • 69% said that it facilitates employee performance reviews or appraisal processes
  • 64.6% responded that it allows users to evaluate performance in relation to goals

Clearly, not all technology options work for every company as they all have varying needs. You must select the right technology for your company. Here are things to look for when determining the right tech for you:

  1. Facilitates collaboration
  2. Aligns with your learning and development programs
  3. Integrates with other business software
  4. Allows for flexibility to match your processes
  5. Easy to implement and use
  6. Produces meaningful data

How to Use Performance Analytics

No strategy is effective without a means of tracking and maintaining. Performance data must be examined by managers and leaders to pivot and move forward effectively.

The bottomline: employee performance has an impact on the performance of the entire organization. CEOs who ask for feedback from their reports improve the overall confidence in their executive team, leading to an increase in performance of their overall company. However, many managers cannot monitor performance effectively. Most companies use the traditional practice of annual performance reviews. Performance reviews are often viewed as tedious and a waste of time while potentially leading to a higher turnover rate. Despite some negative aspects, they are beneficial in terms of motivation and progression in your employees’ careers.

Most decision-makers realize traditional reviews are not working and they are searching for a new solution, sparking that shift towards a continuous performance system. Technology allows companies to capture analytics and use those findings to determine potential performance, barriers to growth and even predict what might be lacking in the current team to inform future hires. There are two key advantages to using performance analytics:

  1. Managers can use the data to determine which direction they should take to improve employee engagement.
  2. Managers can correlate performance and engagement data with business results.

A bright spot is that traditional annual performance reviews are going out of style. This frequency leaves HR managers scrambling to find solutions for slipping performance while high-performing employees feel undervalued. Real-time data provided by performance analytics highlights difficulties and accomplishments as they happen and before they can cause trouble or turnover.

Leaders are left with a clear picture on what is happening within their team. They are capable of building programs and acknowledging performance quickly and with evidential support, which is both helpful to compliance and important for future performance discussions.

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When these findings are recorded and organized in the right dashboard or technology, your hiring team can benefit from current and historic performance trends. And not just to understand what work values and skill profiles are most successful in the company, things like seasonal work increases, program and process rollout effects and productivity trends are all laid out in a way that helps your workforce management team better plan for the organization’s employment needs.

While 90% of companies believe predictive analytics can benefit your recruiting and performance, only 7% are on record using it. With business changing everyday, companies need a way to track performance in real-time and performance analytics can provide just that.

Conversations are the Key to Performance Intelligence

Conversations are where company goals start, it’s how they’re supported, it’s how employees feel engaged and it’s how your leadership guides productivity. After all, the top three goals of performance reviews, according to HR.com, are:

  1. Help employees learn and grow.
  2. Improve overall company performance.
  3. Boost conversations between employees and managers.

The correlation should be abundantly clear: Communicating committed corporate goals with employees is essential for effective performance development. Holding honest and transparent goal conversations with your employees will push them to perform well. In fact, 69% of employees say they would work harder because their efforts were better recognized. The collaboration brings an individual employee natural ownership in their performance and will inspire a connection to their work. Having a common leadership language is critical to effective conversations. It is the heart. Leadership language should be ingrained into the corporate culture, so it is part of the way people operate on a daily basis.

Think of it this way: people don’t like to be told their expectations, they like to be asked how their organization’s expectations of them can best be supported. All this, of course, leads to higher returns for your company.

Quantity and quality matter. It’s important for leaders to have quality performance conversations with their employees throughout the year. Career conversations with employees boost engagement and productivity. In fact, 80% of companies with an effective performance management process, make it a year-round process and have employee-manager conversations about performance at least four times a year.

Now What?

You know that collecting meaningful analytics will increase your company’s transparency and in turn increase speed and efficiency through more effective conversations. When you can understand what to look for in your performance data, you will know how to communicate your expectations and strategy to your employees so they work swiftly.

Analytics are used to transform your company, but collecting them can be a feat. If your organization has never used a software or proprietary system to gather performance trends, leadership is starting at square one. The employee surveys will help, but not in the way data can. And that’s why so many companies are welcoming Performance Management software.

Download the full presentation to learn more about the fuel your performance management strategy needs!