Although it's widely accepted that engaged employees perform better, the relationship between continuous performance management and employee engagement is often overlooked.
And we're not talking about a once-a-year performance review because research shows that those. Do. Not. Work. We're talking about continuous performance management.
What Exactly Is Continuous Performance Management?
Continuous performance management is an approach to appraising, improving, and empowering employee performance that emphasizes regular, meaningful interactions over a single annual or bi-annual event.
It's the difference between staying on top of your studies throughout the semester or cramming at the end. Here the end goal might be the same, but the journey (and often the results) are entirely different.
It consists of a cycle of:
- The employee reflecting on their progress towards goals, achievements, role satisfaction, and any blockers they're facing or support they need
- The employee and leader documenting notes on #1
- The employee and leader connecting to have a conversation on #1 and #3, map out the next actions, plan and set new goals.
How Does It Engage Employees?
Continuous performance management is characterized by frequent, ongoing touchpoints with team members to check in on goals, projects, workload, challenges, professional development, general satisfaction, and well-being. It's also an opportunity for the employee to give valuable, continuous feedback.
When you're caught up in the day-to-day of getting stuff done, taking the time out to send messages to all of your team or have one-to-ones can seem like unnecessary busywork. It's essentially a time-suck with little impact.
But with research from Gallup suggesting that employees who meet regularly with their managers are almost three times as likely to be engaged, continuous performance management is simply worth the investment of time. Here's why.
Regular conversations and interactions between an employee and manager help build a stronger relationship based on trust, transparency, and reciprocity.
There's a caveat to this, though.
Trust can only grow if the employee feels validated and supported.
If the touchpoints are more negative than positive, if they feel vulnerable and intimidated, or if they provide feedback to a manager and it simply goes unheeded, the relationship will suffer.
Don't forget to always provide positive feedback about what the employee is doing well and points for improvement.
If an employee has a strong, trusting relationship with their manager, they are more likely to be engaged and want to do good work for them.
In fact, managers and their leadership styles account for 70% of the variance in employee engagement, according to Gallup.
2. Timely And Accurate Feedback
Sometimes I struggle to remember what I had for dinner last Monday, let alone what my team did a week ago! Extrapolate that back three-six-nine months, and we have a problem.
In comparison, regular performance check-ins help to capture thoughts and feedback while it's still fresh in employees' and managers' minds.
And when these thoughts are shared as close as possible to the event or activity they relate to, it'll be much more effective in engaging employees and more likely to lead to action as it gives employees accountability.
If you wait too long, either it will turn irrelevant, or you will be confronted with a more firmly ingrained habit.
4. Issues Can Be Identified (And Rectified) Earlier
In a similar vein, if you have an employee facing a barrier or challenge – whether they're underperforming or high performing – and you wait until annual performance review time to address it, one of two things is likely to happen.
- The problem will have escalated, and you'll have a much bigger job trying to fix it, or
- The problem won't be there anymore, either because it's (hopefully) sorted itself out or because the employee isn't there anymore either.
The average cost of replacing an employee can be upwards of 30% of their salary.
Thus it's much more cost-effective to identify issues early and provide coaching, training, and support to help them improve rather than rehire.
Plus, employees will appreciate the open, honest, and constructive feedback that allows them to grow and develop.
5. Workload And Stress
Lack of clarity, unclear expectations, or unmanageable workloads can lead to increased stress. If left unaddressed, it can lead to eventual burnout and disengagement.
That's why checking in regularly through continuous performance conversations is vital so that you can pick up on potential stressors and help prioritize or reshuffle work tasks.
Involvement in this way has a huge effect on engagement, with Gallup reporting that employees are seventeen times more likely to be engaged when managers know what they're working on and help them set performance goals.
Different employees are motivated by different things. Some are motivated by the work itself, some by the relationships and human interaction, and others by rewards and recognition.
If you're in the latter category, a year is a long time to be recognized for this work, whether it's through a pay rise, public recognition, or your boss simply saying, "thank you, you've done a great job."
Continuous performance management ensures that wins are not missed and that success and excellence are recognized and rewarded in real-time.
It's worth figuring out what personally motivates each of your team so that you can ensure you're motivated and providing them with what speaks to them
7. Opportunities To Grow
All too often, your high-performing employees don't get the attention they deserve.
Managers are typically caught up in fixing problems and putting out fires elsewhere. The danger with this is that your top talents might feel underutilized, bored, or underappreciated.
If you have frequent performance talks, you will be able to deliver the acknowledgment that top performers need while also allowing them to stretch, grow, and develop, which will, of course, lead to higher engagement.
Why Continuous Performance Management Isn't Just For The Employee?
When I worked in a job where performance was only reviewed annually, I would start making notes of any important points, ideas, or issues I wanted to raise in the months leading up to the performance review.
I essentially saved it all up until that one day. This meant that not only was around 6-9 months of feedback missed, it also meant that my company only had the opportunity to act on my feedback once a year.
Imagine how much the company could have improved if they were aware of all the issues and opportunities as they happened?
Take, for example, team members who are unhappy about an unrealistic workload. Suppose the company is made aware of this. In that case, they can fix it by adjusting deadlines, re-allocating work, or increasing resources.
This has a direct impact on the team in terms of fixing their workload issue. Moreover, it also makes employees feel valued, committed, and engaged when they feel that opinions are being heard and addressed.
And that in itself flows back into the business in the form of increased productivity and performance!
How To Do Continuous Performance Management?
Suppose you're switching to continuous performance management from a lower-frequency review cycle. In that case, you might notice a bit of pushback from managers and employees at first.
Managers tend to think that annual reviews will take them a lot more time. But in reality, taking 1-2 notes about employees each month can save up to half the time in prepping and nipping issues in the bud before they snowball.
Employees might initially see it as micromanaging, but when they realize the check-ins come from a place of care, trust, and support, they will quickly see the benefit.
You'll want to set up regular meetings with your employees to find out:
- How is the person feeling (sentiment, satisfaction, stress levels)
- How are they tracking towards their big goals?
- What went really well?
- What didn't go so well, or where is support required?
- What else do they need to achieve the results?
We also recommend sending a pre-1:1 pulse survey to inform and facilitate more productive, structured conversations when you catch up face-to-face. This also gives your employees time to reflect on and consider their responses, rather than feeling rushed or put on the spot.
Although you can keep track of your performance conversations in documents or spreadsheets, it's useful to have a performance management tool like intelliHR, which can not only schedule and send these pre-check-in surveys but captures and houses all feedback, goals, achievements, and diary notes in one place, providing a Performance Summary report at the click of a button.
In today's workplace, annual reviews simply aren't enough to keep up with the rapidly changing and uncertain environment, both internally and externally, and they don't have that much of an impact on performance.
Continuous performance management is a smarter way to encourage performance and enhance engagement. Your people, leaders, customers, and bottom line will all thank you for it.