February 4, 2019

What is Continuous Performance Management

BY: Marcus Lambert
white curved edge

Continuous performance management is officially A Thing. It’s not watercooler-whispers anymore. Many of the most forward-thinking HR departments in the world are huge proponents – and enjoy huge rewards.

What is Continuous Performance Management?

Continuous performance management is officially A Thing. It’s not watercooler-whispers anymore. Many of the most forward-thinking HR departments in the world are huge proponents – and enjoy huge rewards.

But what is continuous performance management?

How’s it different from what you already do? Why should you care? And how do you start implementing it?

Read on.

Continuous Performance Management: Your FAQs, answered

We’ve collated the most common questions about continuous performance management into this handy cheat sheet. Let’s go.

What is continuous performance management?

Continuous performance management is a performance management process that happens continuously. (To be facetious).

In other words, it’s when you manage performance on an ongoing basis. The tools of the continuous performance management trade are regular goal-setting sessions and regular check-ins to review progress, give feedback and offer support.

(Source: Bersin, Deloitte Consulting LLP, 2017)

The idea is, managing performance continuously tethers performance to business goals in a more meaningful, real-time way. And it helps to surface and overcome challenges faster.

So managers can nudge employees consistently in the right direction, to maximise productivity and performance. So employees can have a greater business impact (which is, after all, why you hired them).

How is continuous performance management different?

Continuous performance management is the antithesis of traditional performance management, which centres on annual goal setting and annual appraisals.

But it’s more than that.

Continuous performance management is not just traditional performance management done more frequently.

Rather, continuous performance management is a tectonic shift in how we understand the relationship between business and individual. It reflects our deeper understanding of workplace psychology, and of how to influence productivity.

Which means continuous performance management is really quite different indeed. We wrote about the six ways continuous performance management disrupts  traditional processes, but here’s an overview:

 

Traditional performance management

Traditional performance management is now completely out of date, where individual employees are seen almost as expendable. The inherent nature of traditional performance management is the tendency to look for what is not working or to stress the weaknesses of the employee.

Goals cascade down from the CEO, focussing on achieving business outcomes without recognising individual needs and aspirations.

Each employee likely has many goals, and their performance is managed annually, often based on complex formulas and percentage weightings.
 

Traditional performance management is largely a negative, backwards-looking process.

 

Continuous performance management

Continuous performance management, on the other hand, recognises the role people play in business success. It reflects the belief that inspiring, motivating and engaging the workforce should be major business priorities.

So to that end, continuous performance management focusses on setting goals that meet business needs and personal development needs. Goals aren’t dictated downwards; employees collaborate with managers to co-create a small handful of SMART goals that make sense for them – and the business.

Employees take ownership over the process, and regular check-ins help keep them on track, surface any issues, or allow for agile priority changes to reflect changing business needs.
Continuous performance management is a real-time, forward-looking process.

 

Why does continuous performance management matter?

Continuous performance management is fundamental to successful people management in 2019.

Only 8% of companies believe traditional performance management drives value, which should tell you everything you need to know [i]. And 75% of employees think annual appraisals are unfair [ii].

Compare this to the 90% of companies using continuous performance management who enjoy improvements in employee engagement. And the 91% who enjoy better data to inform their people decision-making [iii].

Or the 50-something percent who enjoy top-quartile financial performance [iv].

Put simply, adopting continuous performance management means you’ll have happier, more engaged people who are better empowered to pull their weight in a meaningful way for the business.

And managers love continuous performance management too, believe it or not. Which isn’t surprising, given 95% of managers dislike traditional annual appraisals. [v]

Because continuous performance management is a world apart from what’s come before.

It’s a new way, where managers have shorter, sweeter, real-time conversations that actually make a difference. Conversations focus on empowering, not reprimanding.

Who’s adopting continuous performance management?

Continuous performance management has been on the HR radar since the early 2010’s. So although many still lag behind, major players have been quietly adopting for years.

High-profile businesses like… Adobe. Deloitte. IBM. Dell. Microsoft. Accenture. GE. PwC. Adidas. Netflix. Equinix. NY Life.

High-profile businesses achieving high-profile results, like Adobe’s 30% decrease in turnover since introducing continuous performance management. Or like IBM’s double-digit improvements in engagement.

Companies that have CPM

(Source: Bersin, Deloitte Consulting LLP, 2017)

Overall Josh Bersin estimates that some 70% of multinationals are moving towards continuous performance management [iv], to give this thing some scale.

How do you implement continuous performance management?

Ah, and there’s the million-pound question. The thing is, businesses often hang back because they think implementing continuous performance management will be hard.

They worry managers will hate it. They worry employees won’t like, understand or use continuous performance management tools that are meant to make their lives easier.

And when they finally take the plunge, another big project comes up and continuous performance management goes on the backburner. (Because HR stuff always goes on the backburner)

Read more: How to overcome the three biggest challenges to implementing continuous performance management.

But getting started is easier than you think.

Yes, continuous performance management demands cultural change and cultural change is never easy.

But securing the executive buy-in that drives change isn’t impossible. Especially with a proven proposition like this.

And yes, you’ll likely face some initial scepticism from managers who see people management as secondary to functional management.

But reframing attitudes and driving adoption isn’t impossible. Especially with the support of technology to make continuous performance management friction-free.

Start small and continuous performance management can be very manageable. Small wins will bolster your confidence and your business case – and before long you’ll be guiding roll-out across the business.

Continuous performance management is the future

Continuous performance management is no longer a nice-to-have. It’s a business must-have.

Enterprises today must work harder than ever to future-proof against agile entrants into their space – continuous performance management is a crucial means of doing so.

TalTrack’s smart platform makes continuous performance management simple, fast and friction-free. See for yourself in this short video.

 

 

[i] Deloitte, ‘Performance Management is Broken’.

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

[iii]Deloitte, ‘Global Human Capital Trends 2016’, p65

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

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

[vi] Harvard Business Review, ‘The performance management revolution’, 2016.

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.