5 Best Practices in Performance Management That Will Help Employees Thrive

In 2023, economic uncertainty means performance management is more important than ever before. As economists predict hiring slowdowns, human resources experts are doubling down on upskilling, internal talent mobility, and other "quiet hiring" tactics to help drive growth.

A successful performance management strategy will help your organization build an empowered and skilled workforce. Common performance management problems include:

Although these issues may seem small, they can collectively have a major impact on your company culture and your organization's overall success.

Instead of avoiding tough conversations or waiting for an annual review, it's time to level up your organization's performance management strategy. Read on to discover five best practices—and three common mistakes that might be holding your organization back.

In 2022 alone, BambooHR helped businesses complete nearly 847,000 self assessments and 768,000 peer assessments. Our award-winning software empowers HR professionals to level up performance management with smart automations, research-backed templates, and the ability to customize the process. Learn more today!

5 Best Practices in Performance Management

1. Provide Frequent Checkpoints

Across the board, experts agree that frequency is vital to improving performance management.

From Borysenko: “Forget the annual review or even quarterly reviews … to really improve, employees need to see frequent, consistent, ongoing progress. That’s momentum. The more momentum they build, the better they are able to achieve their goals.”

Brad Stultz, Human Resources Coordinator at Totally Promotional, offers his experience: “We discuss employee performance on a daily basis. As we see an employee stepping up to the plate, we look toward raises, promotions, and bonuses. This also encourages supervisors to deal with performance-related issues more quickly.” Managers can use employee management software to consistently follow up and improve performance feedback.

Ongoing performance reviews can be hard, as it requires more of managers and supervisors. As Pennington points out, “The focus on more frequent or ongoing feedback, coaching, and development is not new.”

It’s an incredibly simple concept that has only been overlooked because it can be hard. But it’s important to remember that it is worth it. When employees are happy and receive consistent feedback, it can be felt through the company, down to the customer level.

Adobe famously scratched all of their performance reviews, because they believed it was time consuming and labor intensive. Though many may have assumed this would become a performance management failure example, Adobe rose up with a solid performance management system. It entailed something called a “Check-In,” which is “a two-way, ongoing dialogue between manager and employees.” This continuous feedback loop has helped Adobe achieve higher engagement and retention among its employees.

2. Leverage Performance Management Software

Employee performance management software brings about performance automation, which paves the way for improvement in almost every area. Thomas Grobicki, CEO of Avilar Technologies, breaks down the best performance management tools new technologies have to offer like this: “Automation to handle the mundane aspects of reviews is a given. Reviews are being conducted all year long with highly individual and tailored approaches. Employers are using activities like performance journals, performance planning, performance coaching, peer reviews, as well as competency management to expand the picture they have of the employee.”

With automation, business leaders can do more to improve performance in less time than they used to. Enterprise performance management software is available to almost all company sizes and can work to any company’s advantage. Pennington: “The benefit [of technology] is that it provides a more efficient and effective tool for capturing and sharing information. Performance management technology will continue to evolve to match the needs and preferences of users.”

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3. Strive for Balance

To avoid the unbalanced review processes—and its negative ramifications—Wiedman recommends 360-degree assessments: “In a 360-degree assessment, customers (as well as supervisors, colleagues, and subordinates) would have a direct voice in an associate’s appraisal. So it is a good bet that smart associates would be cognizant of the concerns of multiple constituencies. Further, a strong performance in one area … might offset a marginal performance in another.

Thus, the 360-degree assessment gives a much more balanced view of an employee’s contribution to the success of the organization.” When employers identify those areas where the employee is successful, it will build employee morale. At the same time, performance reviews can be used to improve weak areas by implementing strategic plans for each employee’s further success.

4. Follow Up With Action

From Dr. Islam: “Technology also allows for easier collection of data. An employee can now receive more feedback from more sources than ever before. Technology now allows for a more objective view of actual performance on a project, and this can result in more effective behavior change. Technology also improves the record-keeping of performance feedback so more effective follow-up can result.”

5. Focus on Relationships

It comes down to these two things. If you have relationships with the people you work with, positive growth in performance will happen. As Borysenko puts it, “Really smart companies are going to understand it’s about managers developing real relationships with their team and empowering them every single week to see the progress they’re making and what’s possible in the future.”

Or as Pennington put it, “Forms and technology are the tools, not the goal. The goal of performance management is to build superior performance for the individual and organization. That happens best when leaders take an active interest in people.” It happens when performance reviews are continuous and ongoing. There’s simply no way around it.

Whether the term “performance review” still causes you fear and anxiety or not, it’s comforting to know that someday it will probably take on an entirely new, positive meaning.

3 Common Mistakes That Perpetuate Performance Issues

1. Using Outdated Performance Management Methods

Karyln Borysenko, Principal at Zen Workplace, reminds us that the old ways of handling performance still permeates too much of the business world. “I think it’s important to note that although a few high profile companies have gotten rid of the traditional annual performance review questions, the vast majority of companies still utilize it. But here’s the thing: The annual review has very little to do with performance management—it’s simply paperwork. Since no one buys into it, it does nothing to actually manage performance.”

Effective or not, it may take time before the old model is gone for good. But according to Randy Pennington, President of Pennington Performance Group, there is hope. “Some organizations will hang on to their traditional annual review processes for many years to come; some government agencies are required to do annual reviews, for instance.

But even those will move to an approach that emphasizes performance management as an ongoing process rather than an isolated event.”Data-driven analytics aren’t everything, employers should be focusing on the well-being of employees. Ongoing performance reviews can provide necessary feedback at crucial times. A more modern, continuous review process gives employees the tools they need to progress quickly and efficiently.

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2. Pleasing the Boss Instead of Helping the Employee

According to Timothy G. Wiedman, Associate Professor of Management & Human Resources at Doane University, too many performance reviews focus on making some happy—at the expense of others.

“A boss-centered appraisal system runs the risk of focusing employees’ attention on pleasing the boss—possibly at the expense of achieving some other important goal," Wiedman says. "Employee behavior that may ultimately harm the organization might actually be rewarded by an appraisal system that does not capture vital information.”

This type of performance review can infringe on an employee's rights to do what they feel would best benefit the company in lieu of attaining the boss’s approval. Top employers create strategic plans to aid their employees in using their agency and creativity to work out solutions.

3. Investing in the Wrong Technology

Technology is revitalizing and reinventing performance management for good, but it’s not the be-all and end-all. “Technology is both a benefit and a curse to effective performance management solutions," Pennington points out. "The curse is that technology can become a crutch or something managers and supervisors hide behind to avoid meaningful interaction. We see that today.”

Instead of chatting in-person regarding an issue, employees might use the company’s messaging platform or phone to communicate with colleagues even when both parties are based in the office. Both of these methods can get the job done, but it inhibits the growth of valuable and personable relationships that are necessary to produce quality work.

Next Steps: Make Managing Employee Performance a Strategic Priority

Despite recent advances in software and strategy, performance management is still a huge stumbling block for many organizations, and it can be an anxiety-inducing process for both managers and employees alike.

The good news: Innovative performance management solutions can make the challenges of performance management much easier.

With BambooHR's user-friendly HR software, you'll gain access to research-backed performance management questions, time-saving automations for gathering feedback, and the ability to easily surface data-driven insights.

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