Continuous performance management | What, why & how!

Performance management isn’t just a set of boxes to check. When done right, it can help motivate and align team members toward common goals, as well as create a culture of growth and development within your organization. 

However, just two in ten employees feel that their company manages their performance in a way that motivates them to excel in their roles, and only 14% strongly agree that their performance reviews inspire them to grow.*

Clearly, we’re doing something wrong here. If you’re still taking a traditional approach to performance management and running annual reviews with little to no feedback in between, it’s time to rethink your process.

Continuous performance management enables you to better engage employees and motivate them to work toward both individual and company goals. Here’s everything you need to know about continuous management, as well as two examples of organizations that have effectively implemented this approach. 

‍*Gallup, 2023

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What is continuous performance management?

If you’re wondering what continuous performance management is, it’s a modern, people-centered approach to performance evaluations. This kind of continuous management encompasses an ongoing, holistic process rather than holding reviews on a one-off basis. It also contains more elements than a traditional performance management — such as goal setting, exchanging feedback, and casual check-ins with reports. 

Therefore, one of the biggest differences between a continuous performance management cycle and traditional performance management is how many touchpoints it provides between managers and team members. Some common elements of a continuous performance management system include:  

• Feedback — Go beyond giving and receiving feedback and aim to create a broader culture of feedback within your organization. That means prioritizing continuous feedback in your company values and facilitating praise and spontaneous, constructive comments. For example, create a wins channel on Slack to share public praise or use a Praise Wall to give employee shoutouts more visibility.‍

💡 Our 2023 Workforce Trends Report revealed that 75% of professionals want more feedback and recognition from their managers. A third of participants also noted that they weren’t satisfied with their organization’s performance review process and wanted more frequent assessments. This just goes to show that investing in a dynamic, well-rounded performance management system that goes beyond traditional evaluations is a worthwhile investment that results in happier, more motivated employees.

• Competency frameworks — These give team members clear, professional roadmaps for growth within your company. You can also reference them when you write performance reviews, which makes the criteria you have for employees to excel and get promoted to the next level explicit and actionable.
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• ‍360° reviews — Continuous performance development is about looking at people holistically. In a 360° review, managers and leaders gather feedback from many different colleagues that work with the reviewee. That makes these performance appraisals a much more effective and unbiased way to consider how team members are doing, especially when compared with traditional 1:1 performance reviews.
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• ‍Self-assessments — These give employees the chance to think critically about their own performance and development by taking the time to self-reflect, identify areas of strength and areas for improvement, and derive personal growth goals. A performance objective example might involve asking team members to review their individual OKR progress and come up with actionable next steps.
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• 1:1 check-ins — To monitor and support employees, encourage managers to hold informal weekly or biweekly 1:1 meetings. These only have to last about a half hour and give managers and reports a time and place to take a proactive approach to issues as and when they arise. Check-ins like this are the basis for close, trusting professional relationships.
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• Goal-setting — Use cascading goals, OKRs, or SMART goals to align employee benchmarks with overall company objectives. Then, share comments and feedback on goals in order to track progress and make sure everyone’s on the same page, as well as check goal progress during 1:1 meetings and performance reviews. ‍
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• Analytics — Collect and understand the data behind what’s boosting and what’s stifling team members’ progress. Performance analytics give you insights into how you can best support employees, and a comprehensive manager dashboard gives you an overview of how you can build a high-performing team.   

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The why: 5 top benefits of continuous performance management

Almost three-quarters of professionals receive a performance review once a year or less. Continuous performance management is a better way to assess and inspire employees than the traditional annual review method. 

As noted by Michelle Link, Chief Human Resources Officer at Maximus, “annual performance reviews have been the standard since the Greatest Generation and Baby Boomers entered the workplace.” 

She goes on to elaborate on what motivated Maximum to implement a continuous performance management approach: “As Generation X and Millennials have entered the workforce, managers realize they want more frequent feedback. The same goes for Generation Z, but they also want more future planning. CPM is less time-consuming and allows managers to check in more frequently.”

Here are some of the advantages of this modern, people-centered approach:

1. More engaged employees — A vital part of continuous performance management is telling team members what they do well through instant feedback and praise. As reported by Gallup, when team members feel recognized, they’re five times more likely to be connected with the company culture and four times more likely to be engaged. ‍
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2. Higher retention — Effectively managing and tracking employee performance makes people more likely to stay with organizations because of how it contributes to their career growth and professional development. Indeed, companies that share regular feedback with team members have a 14.9% lower risk of turnover.‍
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3. Increased employee well-being — Getting team member performance and recognition right significantly reduces rates of burnout. It also gives people a sense of accomplishment and appreciation for their work rather than feeling stressed and makes professionals ten times more likely to feel a sense of belonging with their organization. ‍
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4. Greater productivity — When employees feel good at work, they’re more motivated and effective contributors. Organizations with a sound approach to performance management are 1.25x more likely to report higher productivity than their competitors.‍
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5. Better financial performance — Continuous performance management isn’t just good for your people — it’s good for business. Companies that manage performance effectively are 1.48x more likely to report better financial results than industry peers. 
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How to launch a continuous performance management process

A manual approach to goal-setting and reviews is cumbersome and hard to track. It gets even more complex if you’re trying to implement a continuous performance management method. Manual processes are hard to scale, and siloed reviews and feedback don’t give employees what they need to feel motivated and thrive.

Given that there are so many elements that make up a continuous performance management system, you need performance management software that enables you to bring everything together under one roof.

That’s where Leapsome can help. With our platform, you can monitor employee progress, set goals and benchmarks, share feedback and praise, and create custom learning paths for all team members.

• Reviews lets you set up performance and 360° reviews using our best practice templates and frameworks — or create custom appraisals to fit your needs.
  
  

• Instant Feedback helps you build a culture of feedback and praise. Prompt people to share their perspectives more naturally and celebrate employee wins by giving high performers public shoutouts on Slack or a Praise Wall.
  
  

• Meetings is a free out-of-the-box tool that makes it easy to build an agenda for your calls, summarize your conversations, and assign follow-up tasks, so performance reviews and check-ins are more effective and actionable.
  
  

• Competency Frameworks give you criteria for evaluations and feedback and help direct your employees’ career and development planning.
  
  

• Goals enables you to track individual, team, and company objectives, which keeps everyone aligned and creates a sense of ownership.
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• Learning guides employees toward personal development goals with top-quality third-party content or custom learning materials.

Most importantly, these products fit together perfectly to keep everything connected, from the goals you set to the criteria you use to evaluate performance.

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2 examples of successful performance management systems in action 

1. SIDES

Through continuous performance management, SIDES helps managers make more informed decisions about team development. “We wanted to help our leaders be the career mentors they wanted to be and give them a tool that facilitates the detection of their team members’ strengths and areas for development,” explains Tara Todorovic, People Development Manager.

SIDES has built a successful continuous performance management strategy using Leapsome that helps managers be as objective and unbiased as possible. This approach has also helped to create a more positive workplace at SIDES, fostering a culture of feedback and praise. 

“Before, we ran feedback cycles during employees’ probation period. However, SIDES plans to also set up biannual feedback cycles with Leapsome, ensuring every employee receives regular skills assessments and can further optimize development strategies.” 

‍— Tara Todorovic, People Development Manager at SIDES

2. CHRONEXT

CHRONEXT is a growing organization that needed to find a better way to manage performance, so they turned to Leapsome. “The tool provides us with a comprehensive overview of performance and behavior and consistently helps us develop and improve our individual performance and hence, the company’s overall performance,” Team Lead People & Organization Leonie Stratbüker describes.

By running 360° reviews and goal-tracking as a part of their continuous performance management process, the CHRONEXT people and culture team has seen an increase in their eNPS score, as well as a positive impact on employee development and performance.  

“If you’re looking for a comprehensive feedback tool enabling your organization to profit from further modules — including surveys and goal tracking — and you’d like to use one efficient tool rather than several, I encourage you to use Leapsome.”

‍— Leonie Stratbüker, Team Lead People & Organization at CHRONEXT

Help team members thrive with continuous performance management

Long gone are the days of one annual review and radio silence in between. To engage your employees, make them feel better in their roles, and increase their chances of sticking around, turn to continuous performance management. 

This approach is about being holistic, consistent, and people-centered. Implementing feedback, a competency framework, 360° reviews, self-assessments, regular check-ins, goal setting, and performance analytics can all help you run a successful cycle of continuous performance management. 

Leapsome connects all these processes in our comprehensive people enablement software. Plus, all our products are integrated, eliminating knowledge gaps and empowering your managers to make fair evaluations and decisions that help employees progress. 

💥 Great performance management sparks creativity and innovation 

Leapsome brings all your performance management processes under one roof and helps you create a thriving culture of continuous feedback.

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