February 9, 2019

Continuous Performance Management: Why should you care?

BY: Marcus Lambert
white curved edge

Continuous Performance Management: Why should you care?

You’ve heard the hype about continuous performance management, of course. But what’s behind the hype?

Is this A-Another Hot HR Trend that’ll scuttle quietly off-radar over the next few years? Or are there real benefits to continuous performance management?

There are. Benefits worth shouting about, in fact. Benefits worth shouting from the rooftops about. And you don’t have to take our word for it. The likes of Deloitte, GE, IBM, Adobe, PwC and a host of others are shouting too.

Let’s look at what’ll happen when you adopt continuous performance management.

 #1 – Improve individual performance

 The first benefit of continuous performance management is this. It really, truly, genuinely improves performance. It helps managers nip potential problems in the bud. It gives employees the tools to navigate problems smarter. It’s timely, which means it’s relevant, which means it’s actionable.

 Take GE[i].

They replaced “scrubbed and anonymous 360-degree reviews” with continuous performance management’s regular feedback check-ins. And they moved away from labels, instead embracing forward-looking behavioural feedback to give employees actionable support.

The results were immediate. Like one engineer who reacted so positively to continuous performance management that he doubled the savings rate against budgeted project costs.  

 #2 – Improve business performance

GE’s engineer is one employee. One employee of around 315,000.

Imagine the effect on the wider business. Imagine all your people felt empowered to perform their best.  

That’s why more than half of companies implementing continuous performance management are top-quartile financial performers[ii]. Because continuous performance management gives real-time feedback that meaningfully impacts behaviour.

#3 – Improve collaborative problem-solving

Continuous performance management is a mindset shift that encourages adaptive, creative, cross-siloed thinking. Which is critical to the bottom line. 

Let’s look at GE again.

GE piloted continuous performance management in their Turbomachinery Solutions unit.[iii]

Navigating seven verticals across three P&Ls, 11 functions, 12 regions and 15 product lines – siloes prevented them from overcoming their major challenge: “to ensure continued growth while cutting costs rapidly”

GE needed to empower their teams to better collaborate, to come together in pursuit of that goal. “Something we knew year-end reviews alone could not achieve”.  

Enter continuous performance management. 

By shifting mindset from “’command and control’ to ‘empower and inspire’”, GE quickly found teams collaborating to develop creative solutions. Like, one team redesigned a cooling system to perform better while also cutting costs by 50%. 

#4 – Compete with disruptors

Enterprises typically struggle to adopt the nimble decision-making needed to evolve in a disrupted space. One big reason is the vast gap between individual employees and business needs.

Traditional performance management – and the old stalwarts, annual goal-setting and annual appraisals – widen that gap. The lag between identifying strategic business needs and communicating those needs to employees is huge.

So those businesses can’t evolve at the needed pace. Which left untreated, will threaten your ability to hold off disruptive competitors. 

Then there’s continuous performance management.

Continuous performance management closes the gap through continuous, real-time feedback and goal-setting. So business leaders can react faster to developing trends.

#5 – Boost employee engagement  

Another benefit of continuous performance management is the impact on employee engagement.

In fact, Deloitte find 90% of companies using continuous performance management see improvements in employee engagement. Like IBM’s double-digit increase after implementing continuous performance management.[iv]

The thing is, people hate annual appraisals. Like, 75% of employees think annual appraisals are unfair[v].  And 95% of managers think they don’t drive value[vi].

It makes sense that scrapping annual appraisals would make people happy.

And replacing them with continuous feedback check-ins (or touchpoints, or conversations, or whatever you call these regular discussions) makes them happier, because they know where they stand.

Fewer than one third of employees know whether their performance is where it should be.[vii] That’s awful.

Continuous performance management understands that most employees want to do well. They want constructive criticism to help them grow.

That’s why continuous performance management is such an advantage. Because you give your people what they want and empower them to grow.  

#6 – Reduce turnover

This benefit of continuous performance management comes hand-in-hand with the above. Engaged, empowered, challenged employees don’t churn. Disengaged, disgruntled, demotivated, disheartened employees? Exactly.

That’s why Adobe found voluntary turnover decreased by 30% after implementing continuous performance management[viii]. Not surprising, given managers described their traditional performance management processes as “soul-crushing”[ix].

Soul-crushed people aren’t loyalists, it turns out.

#7 – Save time

This benefit of continuous performance management seems counterintuitive. Surely if you have more feedback more often, it’ll take longer?  

But continuous performance management doesn’t mean traditional annual appraisals more often. It’s a new approach.

Let’s look at Adobe again. That “soul-crushing” process cost 80,000 hours each year. 80,000.[x]

And it wasn’t working. People hated it. 80,000 hours wasted on something ineffective that drove employees to competitors. Not good.

So they adopted continuous performance management instead. A “far simpler but far more effective system” with three-month check-ins. Before each check-in, continuous performance management software collated feedback from other employees, about that individual.  

The resulting check-in was a short, focussed coaching conversation, without hours wasted on paperwork and planning. Just fast, targeted, relevant feedback that’s truly constructive.

#8 – Save money

Where there’s time, there’s money. CEB estimates that a 10,000-employee-strong company spends more than 35 million dollars on traditional performance management.[xi] Every year.

That’s a staggering investment into something that’s proven not to work.

And then there’s the knock-on cost savings that come from having better data to guide people decision-making.

Take L&D.

You hopefully spend a decent chunk developing employees. Continuous performance management gives more data about your people – like who needs training. So you can allocate resources more efficiently and cut wasteful spend.

#9 – Treat employees fairly   

A big benefit of continuous performance management is reducing bias. Remember how 75% of employees think traditional evaluations are unfair? That’s because they are.

Recency bias often means managers give feedback according to recent feelings, not the bigger annual picture. And subjective opinions threaten fairness.

That’s where complex formulas and rankings were meant to come in, to introduce objectivity.  But they’re often shown as demoralising and not constructive.

Continuous performance management offers such an advantage because you collect feedback continuously. You gain a diverse range of perspectives.

This nuanced understanding is much truer to reality – and much fairer. It’s a smarter way to make people decisions.

That’s why 70% of GE’s employees thought performance management discussions were the same or better without ratings. And 80% of managers found salary and differentiated bonus planning was achievable without ratings.[xii]

#10 – Future-proof the business

Less than a third of business leaders believe their workforce capability is sufficient to execute their future strategy, Deloitte report[xiii].

Skills shortages are a major concern. Developing internal talent ais crucial, to equip the business with needed future skills.

But traditional performance management makes that difficult. You don’t have the same visibility over your people. It’s like using a photograph from last year to guess what clothes are in the wardrobe now. That’s why continuous performance management is an advantage. It helps you keep your finger on the pulse so you can spot and fill skills gaps – to help future-proof the business.

Continuous performance management is crucial for business success

Continuous performance management is a better way of managing people. It’s that simple. It’s a more effective way to manage performance, for starters. It makes everyone happier, for seconds. And the biggest benefit of all?

Continuous performance management closes the gap between your business and your people. So the business can execute strategy with the pace and agility to stay competitive.

TalTrack is a smart continuous performance management platform that your people will love. Drop us a line for your free trial and start experiencing the benefits of continuous performance management yourself.


[i] Harvard Business Review, ‘GE’s Real-Time Performance Development’, 2015.

[ii] HRZone, ‘From performance misery to performance joy?’, 2015.

[iii] Harvard Business Review, ‘GE’s Real-Time Performance Development’, 2015.

[iv] Bersin, Deloitte Consulting LLP, 2017.

[v] Willis Towers Watson, ‘Performing in Performance Management’, 2015.

[vi] SHRM, ‘Is it time to put the performance review on a PIP?’, 2015.

[vii] Forbes, ‘Fewer than half of employees know if they’re doing a good job’, 2016.

[viii] Bersin, Deloitte Consulting LLP, 2017.

[ix] Deloitte, Global Human Capital Trends 2014, 2014.

[x] Deloitte, Global Human Capital Trends 2014, 2014.

[xi] The Independent, ‘Accenture to scrap annual performance reviews’, 2015.

[xii] Bersin, Deloitte Consulting LLP, 2017.

[xiii] Deloitte, Global Human Capital Trends 2015, 2015.

About the author Marcus Lambert

Entrepreneurial and commercial CTO. For over 20 years, Marcus has built a global reputation as a technology innovator. Today, he architects and delivers world-class products and projects that solve real business problems.