Employee Performance Management: All You Need to Know

Some factors are crucial to improving employee productivity and ensuring good performance management. Organizational culture, work environment, work-life balance measures and physical and mental health are important aspects in improving their motivation and effectiveness. In addition, good day-to-day management, healthy working relationships, and training and development opportunities make all the difference in encouraging your employees to give their best all year round.

While 98% of organizations admit that performance management programs are crucial, 45% of managers do not think their formal performance review process brings value to the company. Accordingly, only half of the workforce understands their job requirements. These statistics show that there are major challenges to overcome if companies want to reap the benefits of an effective performance management cycle.

Thankfully, 81% of managers are trying to improve their practices in that regard, as they are aware that recognition and goal setting will positively impact productivity and employee happiness.

A strategic approach to performance management increases employee retention, helps identify training needs and define career paths and reduces risks of micro-management.

Effective performance management is not just about annual or quarterly performance reviews. You also need to work on the following aspects throughout the process:

• Setting clear goals: SMART objectives (specific, measurable, achievable, result-oriented and time-defined) are easy to align with your company goals and can be evaluated impartially. It’s important to consult with the employee to define clear expectations that will support their personal development.
• Continuous feedback: Performance must be monitored on an ongoing basis to avoid focusing on past performance. You need to show appreciate milestones and share feedback on employees’ day-to-day work.
• Evaluation methods: There are various performance evaluation methods you can implement and customize according to the reality of your organization or team. It’s up to you to choose between traditional reviews, objective-based evaluations or 360-degree appraisals to effectively manage your employees’ performance.
• Skills development: If employees’ performance needs to be assessed, they have to be given the means to improve it! Training and development opportunities enable your teams to acquire new knowledge or optimize their existing skills, thereby increasing their productivity and motivation.

If you are looking to improve your practices, it might be because you are experiencing one of the following widespread performance challenges:

As remote work remains a reality for many employees, performance monitoring techniques need to be adapted and diversified. This is the perfect time to question and modernize management and communication practices by using new tools and performance evaluation methods.

Different working situations mean different realities and needs. Managing hybrid and remote workers requires streamlined performance management processes and homogenous practices. Centralizing employee information is now essential to overcome this challenge.

Autonomy and self-development have become paramount for a positive employee experience. Encouraging career growth opportunities requires involving your employees in the performance management process by asking them what could be improved and using multi-rater feedback for your appraisals.

Employee recognition is a major factor in engagement. Expressing recognition for employees’ achievements and outstanding performance during interviews is always a great way to show appreciation.

The world of work is constantly evolving and companies need to keep up with the latest management trends. In that sense, using HR software solutions to manage and track performance is the best way to stay on the right track. Annual reviews are also loosing ground as employees are looking for real-time feedback and time-bound development plans.

Preparation is key, especially when it comes to performance reviews. Lack of preparation could result in unnecessary stress and frustrations for the evaluated employee, misunderstandings on both parts, and wastes of resources and time for the company.

Effectively preparing for performance reviews means following these steps:

1. Choose the right method and frequency: Standard evaluations, 180-degree or 360-degree performance reviews, 3.0 evaluations, 9-box grid… There are many evaluation methods to pick from, each with its own frequency. You should make sure that you pick the right fit for your organization’s reality and needs.
2. Collect reliable data: You can collect data by taking notes during one-on-one meetings or through KPIs (Key Performance Indicators). This will help you avoid biases and detect potential issues of productivity.
3. Schedule and communicate: You should schedule the meeting in advance and make sure that the time slot is lengthy enough for everyone to express themselves.
4. Rehearse your tone and your stance: Your words and comments should not offend the employees or make them feel bad about themselves. Be thoughtful when rehearsing your tone, but try to remain authentic.
5. Commit to the golden rules: The golden rules of successful performance reviews are respect, impartiality, transparency and honesty. If you stick to these values, you are sure to make the most out of the process.

In short, preparation will prevent miscommunication, so don’t come to the meeting empty-handed and unorganized.

Having a list of behaviors you should avoid and practices you should maintain is always helpful. Here are the dos and don’ts of effective performance appraisals (number 3 is simply indispensable!):

1. Gather and compile notes: We previously mentioned the importance of gathering notes when preparing for performance reviews. Facts and examples are key to constructive performance interviews.
2. Listen to the employee: Remember to ask the employee about the challenges they faced, their ideas and their feelings to empower them and make this a two-way conversation.
3. Support your feedback: Use the data you compiled to support your comments and feedback, and make sure to illustrate how productivity can support organizational goals.
4. Provide an action plan: Focus not on issues, but on solutions! Offering training, coaching or new tools to improve performance shows that you are fostering employee growth and that you are confident in their ability to improve.
5. Follow-up: Meet up during regular check-ins after the performance review to track progress and make adjustments if necessary. Ensure that there is a continuous improvement towards performance expectations such as predefined SMART goals.

If you follow this short list, you will already be one step closer to reaching your performance management goals!

1. Use the word “but”: Compliments and encouragement should not be followed by criticism. “And” is always preferable to “but” for a constructive outlook on areas of improvement.
2. Only focus on things to improve: Appreciating achievements and positive attitudes is as important as tackling performance issues.
3. Do all the talking: Involve your employee in the process and envision problem-solving and decision-making as a team.
4. Listen only to reply: Don’t talk over your employee or ignore their feelings and ideas. Listening skills and empathy will help you create a constructive discussion.
5. Bad mouth: Avoid gossiping and bias. Performance reviews should be professional and as impartial as possible.
6. Be vague or digress: Don’t send mixed messages and make sure that your employee understands your points by being factual and open.

Some attitudes should be avoided at all costs during performance reviews. Try to be empathetic and always consider what it would be like if you were on the other side of the table, and you will avoid frustrations and misunderstandings!

Are you unsure of which points to highlight during your assessments? Here is a quick rundown:

1. Performance insights and areas for improvement: Information about productivity and how it could be improved should be the main focus of your discussion.
2. Soft skills: While productivity and hard skills are great, soft skills make for reliable workers and productive teams. Therefore, you should address values such as teamwork, flexibility and communication during your interviews.
3. Appreciation for achievements: If we said it once, we said it a hundred times! Achievements need to be highlighted and appreciated to encourage positive behaviors and good performance levels.
4. Organizational goals: Make sure that your employees know the business goals they are working towards to convey the impact their performance has on a larger scale.
5. Development opportunities: Performance reviews are crucial moments to foster growth and learning. You should think about offering training opportunities and discussing career paths throughout the conversation.
6. Motivation and expectations: Ask the employee about their motivation and their expectations for their future in the company. This will help you notice potential drops in engagement levels and identify their needs.
7. Future goals to reach: Define clear performance goals and make sure they are aligned with the company’s needs and the employee’s expectations.
8. Ongoing support: The discussion should conclude with offers of ongoing support and scheduling the next performance meeting to ensure that the process is successful in the long run.

Covering all these key topics is essential, but if the evaluated employee needs to talk about something else, we recommend that you stay open to new lines of discussion and remain ready to listen.

It can be challenging to ensure that you share constructive feedback. First, you need to make sure that you rely on facts and actionable insights by using notes from previous meetings, HR reports and KPIs. You also need to be open to dialogue throughout the performance review. Moreover, remember that positive feedback and recognition are essential to motivate your employees.

For more modern approaches to performance management, we recommend that you promote multi-rater feedback such as upward and peer feedback, or even set up 360-degree appraisals.

Here are some examples of 360-degree feedback to help you share regular feedback with your coworkers:

Strengths

“This person is a great asset to the team and has a collaborative vision of work.”

“This person has effective communication skills and knows how to share their point of view with the team.”

“This person has a positive attitude that supports teamwork.”

“This person goes above and beyond to complete tasks efficiently.”

“This person always has a kind word to share with coworkers.”

Weaknesses

“This person avoids new challenges and tasks and doesn’t change their schedule.”

“This person does not always complete projects on time.”

“This person sometimes has a negative attitude that impacts team morale.”

“This person has difficulties sharing ideas and tips with coworkers.”

“This person tends to work on their own without consulting teammates.”

Performance review phrases sorted by strengths and weaknesses will help you guide the discussion. Your words should be clear and factual and your attitude thoughtful and open. Having a list of points you want to discuss beforehand will be a great help. For instance, you can comment on teamwork and social skills by underlining participation in team meetings, willingness to help colleagues, or on the contrary, lack of participation and interest in team activities. Here are a few useful examples:

Strengths

“Positive attitude and outlook that benefits the entire team.”

“Ability to work on different tasks effectively.”

“Contributes to business growth and teamwork.”

“Is willing to offer help and share ideas with team members.”

“Is always on time and ready to work.”

Weaknesses

“Is easily discouraged by new challenges and lacks motivation to overcome them.”

“Lack of creative thinking that negatively impacts productivity.”

“Does not meet or barely meets expectations.”

“Never participates in team building activities or team meetings.”

“Inability to meet deadlines and stick to the schedule.”

Click here for more examples of performance review phrases to help you find the right words!

Of course, streamlining performance management requires solid tools. Performance management software solutions should be the backbone of your process, as they allow you to automate performance reviews and customize questions and evaluation criteria while letting you effectively track performance progression over time.

KPIs and HR reports tools can also be included in your HR platform, and they will provide reliable insights on productivity and other performance indicators.

You can also invest in project management tools and collaboration tools to boost your workflows and foster teamwork and productivity. They will help you assign and monitor tasks and keep an eye on your team’s progress.

Finally, having a performance review ebook on hand will be helpful in remembering the steps and practices you need to implement to optimize performance management in your organization.

With the right mindset and good preparation, you will ensure successful employee performance management throughout your entire company, while reaping the benefits of an effective performance strategy.

In 2024, a continuous feedback culture and an effective performance management system will make your company culture stand out as one that cares about growth opportunities and employee development!