1. What Is Continuous Performance Management and Development?
Continuous performance management (CPM) or continuous performance development (CPD) is a modern, human-centered approach to promoting, evaluating, and improving employee performance. It enables organizations to create a trusted environment in which employees feel empowered to take control of their own growth and development. In a culture of true continuous performance management, employees support each other with a range of real-time performance feedback – celebratory, instructive, developmental, constructive, and more.
For those wondering what the difference between CPM and CPD is, look no further. For us at Workhuman, we prefer the term development over management. Why? Because management implies top-down, rigid control, while development implies growth and innovation. This bottom-up approach allows employees and managers to track progress, receive and give feedback, and adjust priorities and goals if situations change.
Regardless of what your organization chooses to call it, however, a continuous performance strategy should be about providing every opportunity for employees to reach their limitless potential – by connecting recognition, engagement, achievement, and purpose to the performance development process.
- Create a culture of connectedness, belonging, and trust
- Enable coaching
- Promote inclusion
- Support organizational values and behaviors
- Reinforce purpose and mission
- Encourage alignment and agility
CPM creates a culture where people are comfortable giving feedback up, down, and across an organization. It’s about helping employees – and organizations – realize their goals, reinforce purpose, and ensure diversity of thought.
The key elements of a continuous performance strategy include ongoing, crowdsourced:
Recognition: An effective performance development strategy begins with a foundation of trust and gratitude, generated through a strategic, comprehensive employee recognition program.
Check-ins: The employee-manager relationship is one of the most critical elements of the employee experience, driving engagement, productivity, and retention. And one of the primary tools for managers and employees to communicate and stay in sync is the check-in.
Feedback from colleagues: Who knows an employee’s performance best? It may not always be their leaders, but their peers. Peer feedback is often the most accurate because it can be direct without being threatening. Encouraging peer check-ins, or an open check-in, with teammates, mentors, or sponsors can add tremendous value to the performance development process.
Priority setting: Employees can set and maintain both short-term and longer-term goals that align their focus to the organization’s business objectives.
2. CPM vs. Annual Performance Review
Performance development is not an event. It happens every day.
Traditional performance management – a process during which employees only receive an annual performance review and small pay raise at the end of the year – is no longer effective on its own – in fact, it hasn’t been for many years.
According to “The Future of Work is Human,” a recent survey of more than 3,500 full-time workers from the United States, Canada, Ireland, and the United Kingdom, more than half of people say the performance management process is not indicative of all the work they do (53%) and that it does not improve their performance (55%) in the long run.
Even before the COVID-19 pandemic, forward thinking companies were moving away from the annual review toward a continuous performance management approach. In fact, many are now using continuous performance development as a way to complement the annual review, enabling them to weave in a consistent stream of feedback, check-ins, and priorities throughout the year. This strategy is a win-win for both the employee and organization. Now is the time for other organizations to get on board.
"Performance management was broken long before the COVID-19 Pandemic... But the pandemic has done what years of prior advocacy for performance management reinvention could not – change the focus from performance evaluations to manager-employee interactions."
3. How does CPM impact the bottom line?
The research proves it again and again. Creating a broad culture of peer coaching and feedback – one that lets every employee support, mentor, and reward one another – has a direct and measurable impact on an organization’s bottom line.
Research shows that continuous performance development demonstrably boosts employee engagement. And engagement leads directly to improvements to the top and bottom lines, such as increased productivity, customer loyalty, sales, and profits.
For example: Gallup found that employees who’ve had conversations with their managers about goals and successes in the last six months are 2.8x more likely to be engaged. And employees who get daily feedback from a manager are 3x more likely to be engaged.
According to Workhuman research, those who check in weekly with their manager as opposed to never are:
- More than 2x as likely to trust their manager
- Nearly 2x as likely to respect their manager
- Nearly 2x as likely to believe they can grow in the organization
4. The Why Behind the What
The Psychology of Feedback
One of the most challenging conversations for an employee or leader is giving and receiving constructive criticism and feedback. It can cause stress, anxiety, and general awkwardness if not done the right way.
Why does this occur? It’s simple. Feedback causes parts of our brain to shut off because we think we are under attack. Our body and mind turn defensive, causing a fight-or-flight reaction that makes it difficult to think clearly.
This is the same reaction our ancestors had thousands of years ago running away from predators. When we receive feedback, we react as if a lion is chasing us. Even giving feedback is challenging. Research from NeuroLeadership Institute found that giving feedback causes increased heart rate and anxiety.
But it doesn’t have to be this way. Here are five things managers can do to build trust and make giving and receiving feedback a more positive experience.
1. Establish relationships rooted in positivity.
The most fundamental way to build trust with employees is to connect with them. As the number of positive interactions managers have with their employees increases, the more trust grows. Research shows there should be three positive interactions with an employee before giving constructive feedback can be a learning experience. Positive interactions include recognizing good work when you see it or celebrating a career milestone or life event.
2. Embrace a coaching approach.
When users take a coaching approach to feedback, the giver of the feedback sets positive expectations and shows employees they believe improvements can be made. One way to drive a coaching conversation is through guided check-ins, which focus on learning and growth by asking specific, open-ended questions.
3. Create a safe environment.
When you encourage employees to be comfortable learning and making mistakes, trust and connection increase. This enables people to generate more ideas and collaborate more; feedback just becomes part of the routine of work. In a psychologically safe environment, feedback is an opportunity to grow, rather than a threat. Managers must set the expectation that they will give both positive and constructive feedback when appropriate because they want their employees to succeed.
Additionally, you can use feedback opportunities to discuss the more human side of your employees. Creating a safe environment allows employees to discuss personal wellness and mental health, two essential aspects of productivity and growth. These conversations can reveal if an employee feels supported by the organization and what management can do to better support their wellness initiatives.
4. Model vulnerability.
- Talking about similar mistakes you have made
- Acknowledging that you may not fully understand the challenge
- Being willing to own your part in the issue
When employees understand that feedback is not a personal attack, but an open dialogue with their manager, collaboration and trust grow.
5. Demonstrate the value of feedback.
Leaders can show they value feedback by asking others for feedback and then taking action based on what they hear. Leaders should be open with their teams about what they are learning and what changes they have made. When leaders ask for feedback from their direct reports and then take action, employees feel valued and heard.
Embracing Culture Change
Moving to continuous performance development requires more than processes and checklists. It often requires culture change, and the support to make it happen. Here are a few ways to create an authentic environment of feedback, learning, and growth.
Active involvement at all levels
Successfully building a culture of growth and continuous development requires that an organization goes all in. Everyone must be involved, from executive leadership to managers to individual contributors, and each have a unique role in the process. Having just a small part of the organization or one group learning how to give and receive feedback is not powerful enough to build support or momentum for the entire organization.
To build a culture of continuous performance, organizations must embrace a growth mindset, where all employees are seen as possessing potential, are encouraged to develop, and are rewarded for improvement. Only when individuals feel responsible and believe they are able to grow and learn can continuous performance development flourish. Here are some tips for building a growth mindset within your culture:
- Focus on one area of growth at a time, such as active listening or reflecting on mistakes. Discussing every potential area of improvement at the same time will likely discourage employees and lower engagement. We are all much more effective when we can focus on one area to reflect and improve on at a time.
- Make learning social. When projects are completed, ensure there is time allocated to reflect as a group on what went well and what could be improved for next time. For example, at the beginning of a quarterly meeting, have a "mistake of the quarter" where the team can discuss learning in an open and non-critical way.
- Embrace this mindset across various talent processes, including leadership development and hiring. For example, as part of the interview process, ask candidates about not only current skills, but which skills the individual is working on developing. Even further, ask how they hope to develop if offered the position. If this person is hired, use the information you gathered as a foundation for meaningful, personal professional development.
Reinforcing culture change requires ongoing communication and internal marketing, such as:
- Reward and publicly acknowledge teams that embrace new processes. Take the time to praise team members, whether it’s through social recognition or a special shoutout at a company meeting. In fact, many companies have found it becomes even more valuable for the company culture and meaningful to an employee when praise is delivered even in the case success is not achieved, but progress or learning has come out of the situation. Creating an environment where it is ok to make a mistake allows people to feel safe failing forward.
- Shifting culture takes time. Make sure you allocate budget for the resources required to execute on ongoing communication and marketing. And even more important, be patient as your employees adjust to this new process.
Similar to individual goal-setting, focus on one habit at a time across the organization. Build excitement, momentum, positivity, and community around one aspect of continuous performance development. For example, encourage managers to start having monthly check-ins with their employees – at a minimum. In fact, many organizations recommend weekly check-ins as the speed of business and need for agility require frequent communication.
Do not just tell employees and managers to have continuous development through check-ins. Guide them as to how often and what should be discussed. Be prescriptive about the types of questions managers should ask employees and what type of feedback they should ask for.
Moving to a continuous development process takes time. You are changing behaviors and mindsets and helping people navigate an intrinsically uncomfortable process. Do not expect changes overnight. When you do finally see the change, however, make sure to point it out. Employees throughout the organization want to see that what they are doing is working.
5. Example: Qlik’s Performance Management Journey
Meet one company who has transformed their culture.
Qlik, a data analytics and integration software company, understands that organizational agility is essential to growing its business and operating efficiently. That’s why the company recently underwent a complete performance management transformation. Some of their key goals for this transformation included:
- Ability to adjust individual and organizational goals as business needs change
- More frequent, authentic conversations that are two-way, not top-down
- Crowdsourced feedback from across the organization
Additionally, Qlik needed a solution that could be used by a global workforce in which 30% of people managers have direct reports in different time zones.
Based on feedback from across Qlik, the new performance framework and solution, Conversations®, was introduced in 2018. “Qlik Conversations aims to drive continual and natural conversations so we stay aligned and perform at an optimum level,” explains Michelle Supple, program director, global talent development.
While Qlik is in the early stages of its performance redesign journey, this year the team saw the highest ever percentage of employees saying they understand their priorities and 98% of employees say they value feedback as support for their learning.
Data from the new solution is also proving invaluable in helping Qlik make better decisions. Qlik sees this rich data, generated by peer-to-peer connection points, as a unique view into Qlik’s culture. Reports show where, when, and how work gets done, creating a lifelog of the company’s history.
"Workhuman has provided us with a hub for our people to connect to what they need – goals, feedback, recognition – captured in their own dashboard."
- Karin Rossi, Director, Global Talent and Organization Development, Qlik
6. Applying These Principles to Your Organization
Ten steps to get started.
As organizations begin transitioning to a continuous performance culture, they should consider using a phased approach to get buy-in across the organization.
1. Start with a foundation of trust through positivity and social recognition. Think of positivity as a protective foundation wherein constructive feedback can become a learning opportunity. In a culture of positivity and trust, employees feel safer in both giving and receiving feedback from colleagues or managers, and even to reach out to ask for it. Creating a foundation of trust begins at the top of the organization. Leaders must be authentic and transparent about their expectations and visions to gain the trust of their people.
2. Get clear on what performance development is at your company. For some companies, it is about growth and development. For others, it is about creating a culture where people are comfortable giving feedback up and down the organization. For others, it’s both. Approaching this transition in a systematic way with clear goals and expectations will make the change easier for everyone.
3. Define continuous. Think through how often the various components of continuous performance development should be performed. For example, how often should check‐ins occur? This may be different for various departments across the organization – and that’s okay, as long as each group knows what is expected of them and how to get there.
4. Establish a baseline and define success. Make sure you, and the rest of the organization, understands the driving forces behind changing your performance development process and set realistic goals for where you want the organization to go.
5. Establish guiding principles. Consider which culture guidelines will fuel your continuous performance development process and provide guideposts that are easy to access and understand. Principles such as feedforward and growth mindset can provide insight into how processes and values drive a culture of feedback.
6. Create alignment through goal setting. When transitioning to a culture of continuous learning and growth, create greater alignment by empowering employees to set their own priorities that contribute to company-wide goals and initiatives.
7. Redesign the check-in. A check-in is one of the most critical interactions between a manager and employee. Evaluate how check-ins could become more collaborative to drive engagement and trust, and understand that what might work for the marketing or sales team may not be the same as the R&D team, and vice versa.
8. Embrace peer-to-peer feedback and coaching. Not all leaders happen to be managers or executives. Not all coaches and mentors are managers, either. Leadership and motivation can come from any level of the organization – and smart performance development is able to tap into it by creating a broad culture of peer coaching and feedback.
9. Take action, even if it is small. If organizations aren’t careful, they can end up in the world of analysis paralysis for months. We recommend you review the steps outlined here and perhaps pick one element, like establishing guiding principles or redesigning check-ins, to start your journey. What is important is that you start moving forward and learn what works and what doesn’t.
10. Empower your employees. Create an environment where employees feel comfortable and want to own their growth and development. If they are the one booking check-ins, asking for feedback, and creating goals, they are more likely to follow through and keep the continuous performance process top of mind.
The Connection Effect:
Trust is a form of relational currency that can be leveraged during times of change and uncertainty at work.
According to research by MIT Sloan, “Digitally transforming enterprises are revamping their performance management systems not only to accelerate their own transformations, but to rethink how to get the best from their people.”
The good news is that HR leaders now have an array of technology options that are not build with the traditional performance management strategy in mind. Instead, Consider leveraging an agile, employee driven feedback and goal-setting system, such as Conversations®, to help you drive this process.
These systems can help you create a culture of engagement, trust, and connection by facilitating:
- Frequent, high quality check-ins that build trust between employees and their managers, mentors, coaches, and peers. Check-ins should occur with anyone you work with.
- Continuous peer and manager feedback that enables multichannel learning, individual growth, and inclusion.
- Ongoing agile priority setting to create alignment and purpose among teams and departments.
- Project and time-based assessments that complement day-to-day development and measure progress over time.
- Social Recognition to celebrate individual success and achievements while building positivity.
Over time, these systems can measure and directly show the impact continuous performance development has on your culture – iterating and evolving your culture to one of engagement, trust, gratitude, and growth.
Based on your success metrics, determine which of these features you want to approach first. As you seek to motivate and empower your employees, which of these will help kick-start this process?
Tracking and analyzing
As you look to build a culture of performance and growth, make sure you understand the driving forces behind changing your current processes, and set realistic goals for where you want to go.
Define and measure success.
Define success metrics for both the short term and long run. Some metrics to consider, gleaned from employee surveys, include:
- Social connection
- Relationships between managers and employees
- Comfort with giving and receiving feedback
Establish a baseline for where the organization is today for each of these elements, enabling you to measure progress in an accurate and realistic way.
Leverage data for insights.
Every year, performance reviews, assessments, surveys, and feedback programs provide terabytes of data for companies. Most of them inform some level of compensation, succession planning, or performance improvement, but the data is not leveraged as extensively as it could be. Like recognition data, performance development data can offer organizations significant insights into culture.
By tracking and slicing aggregate data and looking at outliers, you can understand how goals are being set and achieved, how managers are interacting with teams, how much self-directed energy is being expended, and even where some hidden potential may be lurking undiscovered.
Continuous performance systems provide not just an annual snapshot, but a continuous flow of data for you to measure culture and the effectiveness of your performance development efforts.
When performance data is combined with an array of data from other applications such as social recognition and engagement surveys, you can get powerful insights that allow you to truly measure and manage your culture and growth trajectory.
7. Bring it All Together with Conversations®
The data shows if you put human connection at the center of work, your people and your business thrive.
With Conversations, Workhuman offers a continuous performance development solution with a full spectrum of feedback, mentoring, check-ins, and priorities to develop your talent.
Combining agile performance development with structured assessments, Conversations provides forward-thinking organizations, their managers, and their employees with a complete set of easy-to-use tools to help stay connected, motivated, and growing.
- Check-ins: Drive more frequent, natural conversations by easily creating and capturing agenda items, progress updates, and discussion points between employees and managers, teams, and other working groups.
- Crowdsourced, Real-time Feedback: Easily request and receive feedback from managers and co-workers, whenever you want or need it.
- Goal Setting/Priorities: Set and document short-term priorities that employees can work towards - and connect them to company values and objectives to drive better business results.
- Performance and Project-based Reviews & Assessments: Measure employee growth and performance at the end of a project, on a regular cycle (e.g., annual, quarterly), and when PIPs are needed – all in one place. Managers can choose from a configurable set of project and employee-based templates, request input from others, and easily access all of the feedback, updates, and conversations in the relevant timeframe to make evaluations easier.
- Performance Development Feed: Employees and managers can see all of their check-ins, priorities, feedback, and assessments in a single place, making it easier to create a common understanding, stay aligned, and reflect on priorities and development plans.
- Manager Dashboards: Easily view, filter, and comment on all of your – and your employees’ - check-ins, feedback, priorities and recognition in a single place.
- Social Recognition Tie-In: Identify and act on recognition moments through the act of more frequent and productive check-ins, peer and manager feedback, and progress towards employee goals.
- Insights and Analytics: Go way beyond the simple results and usage data by combining in-product reporting with access to the Workhuman research team to uncover the business impact of your program, how change is happening within your organization, and areas to improve on.
8. Glossary of Terms
A critical element of building a human-centered culture is focusing on the manager-employee relationship. And at the center of that relationship is the check-in. Each check-in is part of an ongoing conversation between managers and employees. Check-ins have evolved from just being focused on project status and deadlines to driving ongoing employee growth.
In order to create a positive employee experience, managers and HR leaders must support three types of check-ins.
Goal-setting check-in (1-3x per year at minimum):
The goal-setting check-in is focused on aligning the employee’s goals, projects, and tasks to organizational goals. This helps keep the employee growing throughout the year and drives collaboration between the employee and their manager. It helps employees understand the impact their work has on the organization’s broader goals.
At the beginning of the year, employees and managers should sit down and define their overall goals and align those goals to the organization’s main objectives. Then, they collaboratively break down these goals into focus areas for Q1. Managers should allocate time each quarter to enable employees to focus on learning and growth.
Goals should be:
- Easy to recall. Keep goals simple and meaningful. For example, a goal such as "increase customer engagement year-over-year by 15%" may be challenging to remember. A simpler goal to recall could be, "ensure customers are 15% more delighted."
- Coherent. Goals must fit together and not compete. For example, the goals “executing flawlessly” and “acting with urgency” conflict with each other and may be challenging to meet at the same time.
- Challenging but possible. Make goals measurable and attainable, but also stretch the employee.
Ongoing check-in (weekly or biweekly):
The ongoing check-in is focused on continuous growth and course correction. It should not be an interrogation during which the manager grills the employee about projects' statuses. Status updates can be shared through other channels, such as email. This check-in should be collaborative, trust-building, and growth-focused.
Career check-in (1-2x per year):
The career check-in focuses entirely on the employee. The goal is to support the employee in their short-term and long-term career progression. The manager should brainstorm with the employee about potential future opportunities, any new skills they might need, and where the employee sees themselves down the line. The outcome should include setting goals that help drive employee development.
Spectrum of Feedback: Consider, Continue, Celebrate
A key component driving employee development is frequent feedback to enable continuous learning and growth. But giving feedback can be a stressful process. Here are some helpful tips for cutting down the stress and anxiety for everyone involved.
Every employee needs to feel respected and have a strong sense of self-worth to be motivated and committed. When an employee feels valued and trusted, they are more willing to learn from the feedback rather than immediately reject it. Before you give feedback, make sure you have a positive relationship with your fellow employee. In general, you need to have three to five positive moments with a peer before you can give them constructive feedback. These moments form a basis of trust.
Come from a place of kindness.
Give feedback from a place of caring for your colleague’s learning and growth. Make sure you know why you are giving feedback and how best to translate it to the employee.
Listen to their reaction.
Listening is one of the most powerful ways to build trust and improve communication. You need to not only listen to what someone is saying, but also pay attention to their body language, tone, and emotions. Adjust based on the other person’s response. You want feedback to be a two-way conversation.
Clarify the actions and behaviors that you are providing feedback on and their impact. The more the individual can relate to the specific event, the more likely they are to learn from the feedback. Do not give feedback about a specific event months after it happens; give it as close to when the incident occurred as possible.
Focus on the behavior, not the person.
Focusing feedback on just the situation rather than the individual separates the problem from the person and the receiver is less likely to feel personally confronted.
Use “I” statements.
Give feedback from your perspective. Do not try to give feedback on behalf of others. If you have not observed or noticed the behavior, it becomes difficult to explain what is and is not working. When you begin, “I’ve heard that you,” you have lost the opportunity for the feedback to be heard, since the other person is thinking about who you heard the information from.
9. Final Thoughts
Let’s face it, traditional performance management isn’t effective now, and hasn’t been for many years. In the ever-changing world we are living in, organizations need an agile, flexible continuous performance development strategy to truly thrive.
Luckily, after reading this guide, you now have the knowledge and expertise to take your organization’s performance strategy to new heights. All that’s left is to get started.