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What is Performance Management?

Practical tips for tough conversations

Updated: February 16, 2024

Want to increase productivity, employee engagement, and retention? Start seeing powerful results for your employees and business by developing a performance management culture in your organization that focuses on growth, development, and ongoing feedback.

When was the last time that you provided an employee with feedback about their performance? I’m not talking about “great work this week” but more so feedback that is concrete, meaningful, and actionable. If you and your managers struggle with finding the time, words, and steps to provide consistent support to your employees, look no further. In this article, I’ll explore how to prioritize supporting the performance of your people.

First, let’s get clear on what performance management is. Some may believe it is synonymous with the annual employment review. Yet, that is only a fraction of what it encompasses. The Society for Human Resources Management (SHRM) defines performance management as “the process of maintaining or improving employee job performance through the use of performance assessment tools, coaching, and counseling as well as providing continuous feedback.”

An important point to understand is that performance management is a process essential for all team members, not just poor performers or when employees are struggling. Performance management can and should seek to ensure everyone is able to perform their best.

When implemented well, it can help high performers continue to excel and feel supported as they do so. It can also help those employees not meeting expectations by providing additional support to improve performance. In many respects, it is a shift in philosophy, culture, and practices. Managers serve as coaches, ensuring that employees receive timely and meaningful feedback to help them do their jobs well, grow as contributing members of the team, and develop in their careers.

The following are some key ways to integrate performance management into your organization and ensure that every employee is given the opportunity to excel in their role.

Set Performance Review Examples in the First 90 days

The first 90 days are critical. Creating a 30-60-90 day plan for your new hires will set a foundation of clear performance expectations. It will also create a regular cadence of tracking progress and set up consistent conversations between managers and employees regarding successes and opportunities for development. And it starts on day one. Your effective performance management cycle should include goal setting, coaching, and ongoing check-ins on progress in your first 90-day onboarding plan.

Be SMART When Setting Goals

The first 90 days are critical. Creating a 30-60-90 day plan for your new hires will set a foundation of clear performance expectations. It will also create a regular cadence of tracking progress and set up consistent conversations between managers and employees regarding successes and opportunities for development. And it starts on day one. Your effective performance management cycle should include goal setting, coaching, and ongoing check-ins on progress in your first 90-day onboarding plan.

Setting goals helps employees identify key priorities related to their role. I’ve found that many managers and employees get stuck on what makes a good goal. Goals can fall into three different categories:

  1. Organizational: What are the organizational priorities and goals for the year? How will the individual help the organization accomplish them?
  2. Job-specific: Given your areas of responsibility and duties, what will you accomplish this year?
  3. Professional development: What skills, knowledge, and abilities will you improve this year? What types of experiences will support this?

These responses provide the basis for your goals. I suggest having at least one from each category and keeping the number manageable (three to five is ideal). The work really comes in when identifying the tactics and activities that will support the attainment of these goals.

In writing the goals, I support using the SMART approach.

  • S – specific key details that everyone understands and can be executed against
  • M – measurable progress and success that can be quantified
  • A – attainable
  • R – relevant to your role and the organization’s priorities and goals
  • T – timebound

This ensures that the goal has been clearly defined, is achievable, and both you and the employee will know when it’s accomplished. Goals can be set on both annual and quarterly intervals using a cadence that will maintain motivation and can be realistically achieved within that time frame. Because a year is a long time to be working on a goal, I’ve found quarterly goals to be effective, where specific milestones are planned for the three months or a few big goals get the bulk of the attention.

Check In Every Quarter

It is helpful to have formal quarterly check-ins with your people to provide more substantive feedback regarding overall performance and progress on their annual goals. This is a great opportunity to dig deeper into areas of strength and opportunity by reviewing what was achieved, improved upon, and learned over the past 90 days. It also helps reemphasize priorities or redirect efforts for the next 90 days.

A few of my favorite employee review questions you can pose to your direct reports during these 1:1 conversations include:

  • What accomplishments are you most proud of, and how have you grown as a result?
  • What projects or tasks have helped you grow the most these past few months?
  • When challenges have surfaced, and how have you addressed them?
  • What team members have been most helpful to you this quarter? In what ways?
  • Are there other areas of the organization that interest you that you’d like to learn more about?

How to Conduct a Performance Review

If you have been regularly meeting and providing feedback to your employees and completing quarterly check-ins, then the annual performance review becomes a straightforward review of the year and prep for the upcoming year.

Where many struggle is when feedback hasn’t been consistent up until this point. It is awkward to discuss how an individual’s performance has consistently been poor for the past six months if it’s the first time it was ever explicitly discussed. On the other hand, telling an employee that they are doing well and to keep up the good work without providing details and concrete examples of where they excelled, areas for further development, and what is possible for future career growth can become a demotivating experience.

To improve your annual performance review, consider:

  • Utilizing it as another touchpoint in an ongoing discussion on performance and development.
  • Providing a fuller picture of the person’s contributions by using self, manager, and 360 review methods.
  • Centering most of the meeting on a future-focused discussion, understanding what aspects of the role are exciting, career goals, and how you and the organization can support their continued growth.
  • Acquiring performance management tools and software that establishes and tracks continuous and meaningful performance metrics and aligns individual goals to those of the organization

A once-a-year review of performance is not enough. We are doing our people a real disservice when that is all our performance management processes consist of. Instead, integrating performance-related and career-planning topics in the 1:1s that we have every week and month keeps it front and center, ensuring our people are supported as they develop in their roles and as contributing team members.

But Wait, There’s More…

A great compliment to the more formal performance evaluation touchpoints (quarterly check-ins and annual reviews) is frequent and ongoing feedback. As Gallup asserts, “feedback is pivotal for engaging employees: Gallup data shows that when employees strongly agree they received “meaningful feedback” in the past week, they are almost four times more likely than other employees to be engaged.”

I encourage you and your managers to have ongoing conversations with your employees about progress, where they need additional support, and connecting what they are contributing and accomplishing to the broader work of the team and organization. Your weekly/bi-weekly/monthly 1:1s are great opportunities for this to happen.

A few questions to include in your 1:1s are:

  • What is currently bringing you joy?
  • What is one thing I can take off your plate to help this week go smoothly for you?
  • Last week you mentioned you were working on X. How did it turn out?

Additionally, these times of connecting should facilitate two-way communication, where employees can share with managers feedback on the support and leadership they are receiving and identify where more support is needed. As a leader in your organization, you can proactively seek out that feedback utilizing various strategies (check out a few we gathered in Effective Ways To Get Employee Feedback).

The Bottom Line

Performance management is a great way to support each of your employees in performing their best. An effective performance management process will prioritize ongoing feedback that is frequent, actionable, and focused on development and future growth. Key points during the year where more formal feedback is provided can provide impactful touchpoints for tracking progress, identifying strengths and areas for improvement, and determining future plans.

Just as important, utilizing weekly and monthly 1:1 sessions to discuss specific performance concerns and accomplishments are helpful in maintaining engagement and motivation. Finally, by adopting the role of “coach,” you and other managers in your organization can provide just-in-time support, remove obstacles, address challenges, and help employees excel in their roles as they ultimately contribute to the success of the organization.

Pros & Cons of Performance Management

  • Consistent, clear, and frequent feedback can increase employee engagement and other factors impacting business success
  • Two-way feedback between managers and employees helps uncover strengths and opportunities for growth
  • When employees know how they are doing and how to improve, they can then take action
  • Inconsistent or general feedback can be demotivating and result in employees disengaging
  • Without the support of HR software, it can become difficult to maintain up-to-date performance data on employees

Performance Management Frequently Asked Questions (FAQs)

Performance management is the process of supporting your employees in performing their best in their roles. This includes utilizing strategies and tools that ensure they are achieving goals related to their role and organizational priorities and supporting their development and growth.

Many HRIS, such as Gusto and BambooHR include performance management modules. Or, you can select HR software, like Trakstar that focuses exclusively on employee engagement and performance management. Learn more about how to select an HRIS for your specific needs here.