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ATD Blog

What Really Is Continuous Performance Management, Anyway?

Wednesday, October 5, 2022

Do you ever feel like continuous performance management is a myth, like Atlantis or the pot of gold at the end of the rainbow?

I’ve led performance management for several organizations of various sizes and industries. The common theme has been a zealous aim to embed performance management into the business flow. This continuous emphasis on performance management typically focuses on two levers: frequent (ideally measurable) interactions and a more enjoyable user experience. Technology has greatly enhanced continuous performance management processes, enabling activities like regular manager and employee check-ins, on the fly 360-degree feedback, and artificial-intelligence-informed nudges to drive specific behavior.

It’s also true that technology has made performance management a more engaging experience, especially for employees and managers who already get it (think, career-oriented employees and savvy managers). As a result, we’re better at measuring interactions and creating data. But how good are we at serving the actual needs of performance management? Given all the advances in the past decade, have we finally reached the pot of gold at the end of the rainbow?

Measuring and Improving Employee Performance

Not quite. Let’s compare the continuous focus with its origins—good old-fashioned performance management. My favorite definition of performance management is a process designed to measure and improve employee performance. Connecting this definition to continuous performance management, it’s clear that we are great at measuring performance. As a field, it is our strongest ability.

However, it is with improving employee performance that continuous performance management (and performance management overall) tends to struggle:

  • According to a recent Gallup survey, only two in 10 employees strongly agree that their performance is managed in a way that motivates them to do outstanding work.
  • In 2019, Gartner reported that less than one-fifth of HR leaders believe that performance management is effective at achieving its primary objective.
  • Willis Tower Watson found that 45 percent of managers do not see value in the review systems used.

In addition to leading performance processes from a center of excellence, I’ve also served as an HR director who witnessed performance management in the wild. I was surprised by what leaders counted (or didn’t count) as a performance-related activity. I learned quickly that most managers do a lot more performance management than they get credit for. While far from perfect, most managers were talking about development, giving some modest coaching, and, in general, managing the performance of their team whether they were thinking about performance management as a process or not.

Does this mean that most managers are already great? Of course not. Management is hard, and there is ample data proving many managers struggle to meet employee expectations. However, this experience shifted my perception around continuous performance management—specifically that continuous means a detailed process and that technology means an improved experience. Ultimately, I believe we should get back to basics and rethink the intended impacts of performance management. We must reorient around a system that enables assessment and improvement.


Performance Management as an Organizational Habit

To truly improve employee performance, we should embrace performance management not as a static process but as an organizational habit. Habits differ from processes in subtle but important ways:

  • Habits emphasize behaviors that can be used anytime (I know when to give feedback) while processes emphasize actions required at a specific time (I give feedback when asked for my 360-degree input at the end of the year).
  • Habits emphasize ongoing activity (coaching is part of a daily routine), whereas processes drive a specific goal or outcome (complete check-ins once a quarter).
  • Habits are naturally empowering (behaviors I’m entrusted to demonstrate) while processes are naturally constricting (complete these actions when it is time).

Habits are having a moment, with influential books being written on the subject in recent years. Atomic Habits, written by James Clear, offers one of the clearest insights on the benefits of habit-based thinking: You don’t rise to the level of your goals, you fall to the level of your systems (habits).

There’s good data to support the benefits of a shift from process-oriented to habit-oriented performance management. A 2019 MIT paper revealed that organizations which pivoted to a flexible, development-oriented approach to performance management have a clear edge. Gallup found that frequent feedback alone (from quick connects to recurring check-ins) can boost engagement threefold.


Building the Habit of Performance Management

So how do companies begin to take advantage of performance management as a habit? What can you do to begin building this habit within your organization?

Start by giving up some control in your process with the aim of reducing confusion for your managers. Performance management processes often appear complex to nonexperts and complicate intuitive managerial activities. We think we’re enabling better leadership, but ultimately we confuse and trip up well-intentioned leaders. For example, it’s common for managers to talk about development but not write down specific development goals (or keep their documented goals at a high level). This is OK; a discussion about development is still useful even if it isn’t documented in your development tool.

Next, challenge your organization to balance both the what and the how of performance. The what of performance is an employee’s output—the kind of material that we’re already strong at assessing. The how of performance is the behavior that drives success—the habits that ultimately lead to improved performance over time. Through clear definitions and accountabilities, you will lay the groundwork for new organizational habits.

Lastly, be broad in terms of your definition of performance management. A hallway coaching conversation—that is performance management! Mentoring an employee—that is performance management! I find it helpful to remember that performance management is an HR term designed to help HR professionals think about an HR process. Business leaders think about creating high performing teams and align their actions with this definition.

By embracing a broader definition of performance management, you’re giving more flexibility to the approach and encouraging managers to do more of what is already helping their teams be effective.

Additionally, consider reading a book about habits. These books contain simple, practical insights that can be applied not just to personal lives but also in the context of influencing the broader employee groups we serve.

Using a process that simplifies what we need to do, and when we need to do it, is an effective method for building a habit. However, overreliance on process breeds compliance, and in today’s organizations, compliance is not enough. For performance management, compliance is what keeps managers from truly improving employee performance instead of just assessing it. By reorienting our approach from heavily process aligned to a specific goal to embracing behaviors that create habits, we might just finally find the pot of gold at the end of the continuous performance management rainbow.

About the Author

Rick Rittmaster is a talent development professional who partners with individuals, teams, executives, and external resources to build a more capable and engaged workforce. Working in L&D and talent strategy, he enjoys the sometimes-tricky job of building people-centered solutions that advance enterprise business goals. Rittmaster also advises on innovation strategy, learning strategy, change management, and employee engagement.

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