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    6 Benefits of Continuous Performance Management

    6 mins

    More and more organizations are doing away with solely relying on a year-end review format and taking a more strategic approach to performance management. By turning evaluation into a year-round conversation, forward-thinking employers are creating a stronger company culture and a more engaged workforce. 

    Managers better know how their people are doing, and employees understand what their organization needs from them. Feedback flows more freely, and as a result, performance and productivity increase. Naturally, the bottom line follows.

    What is Continuous Performance Management?

    In brief, continuous performance management is an HR management style that emphasizes year-round effort to monitor and improve employee performance.

    By conducting regular one-on-one check-ins throughout the year, managers open a dialogue with their employees, creating a channel for timely, continuous feedback and coaching. Contrast that with the traditional annual review system, which relies on a single yearly meeting to go over the preceding 12 months' worth of work.

    Rather than using a flat rating system for past performance, the regular check-ins held in continuous performance management are more of a discussion. Employees and managers talk about current objectives and priorities, review overall progress, and touch on any achievements, issues, or concerns with current goals or performance. Feedback flows both ways, keeping both the employee and the manager in the loop, and more empowered to act and improve as a result.

    Now, this doesn’t necessarily mean you need to skip an annual review altogether - it can simply be a part of the greater picture of continuous feedback. Flexibility is the name of the game here. 

    Meetings can be held as frequently as needed. The standard is checking in every one to three months -- Adobe employs them quarterly, with additional check-ins available on a voluntary basis as needed -- but bi-monthly or weekly meetings may better serve your organization, your projects, and your people. 

    What matters in continuous employee management is that those check-ins happen often enough that managers are able to effectively track and respond to the changing workplace.

    6 Benefits of Continuous Performance Management

    1. More Collaboration and Teamwork

    A constant flow of communication and feedback between employees and managers creates more openness and, in turn, nurtures collaboration. Encouraging more collaborative forms of feedback where the team can communicate with each other also helps employees build more authentic relationships.

    Employees can feel greater belonging in the workplace because they feel like they’re genuinely contributing to the entire project, rather than just receiving directions and completing tasks that are given to them. They can feel more empowered to take more ownership of their work. This also opens the door to employee development, as there are more opportunities for mentorship and coaching.

    2. Adaptability Is Up Across The Board

    Flexibility is a key component of continuous performance management, and greater adaptability is a core goal. Regular check-ins ensure that managers can more accurately track and respond to employee needs, whether that’s acknowledging leaps in progress or addressing issues like competency gaps as soon as they happen. Objectives and milestones, too, can more easily shift to match the needs of the organization.

    With an open, regular dialogue, employees will be better prepared in the event of major change, whether in the organization or the world at large – a lengthy pandemic that shifts the way we engage with work, for example.

    two colleagues walking and having a conversation in a modern office space
    Kovaciclea via Getty Images

    3. Greater Employee Engagement

    Employees want feedback, whether positive or negative, so long as it is delivered appropriately. It helps them to better understand their objectives, their responsibilities, and their company’s culture. The end result is heightened engagement, and the research backs that up. A 2015 Gallup poll found that employees who meet regularly with their managers are almost three times more likely to be engaged than those who only receive an annual performance review.

    With continuous performance management, it's not just your fingers on the pulse of employee performance. It gives employees a channel to report their own needs and see management proactively respond. When employees know that they are heard and that their voices and work matter, their investment in the organization is bound to increase.

    4. Increased Employee Retention

    When Adobe tried out a continuous performance management style of quarterly check-ins, they saw a 30% overall reduction in the amount of voluntary turnover. Why?

    Continuous feedback results in timely recognition and appreciation of achievement and more swiftly addressed issues, which in turn results in employees having a better understanding of where they stand. An employee who feels heard and supported by their management is less likely to burn out and more likely to stick around.

    Positive involuntary turnover also tends to increase with this management style. When employees and managers are more actively communicating, it’s easier to spot an improper fit or significant skill gap.

    5. Greater Productivity

    According to Gallup, employees who understand what is expected of them are 5 to 10% more productive. Regular check-ins and the continuous feedback they provide ensure that employees are always up to date on both the organization’s needs and what is expected of them as individuals.

    6. Improved Bottom Line

    Greater engagement, improved productivity, increased retention, and better employee fit all add up to one thing, a great bottom line. Surveys have shown that organizations where HR and management review goals and objectives with employees on a monthly basis are much more likely to be top performers. 50% of those surveyed were in the top quartile in fiscal performance, while only 24% of companies who utilized annual reviews alone were in that bracket.

    Wrapping Up

    While it will take a conscious effort from the top down to make the switch to a continuous performance management style – not everyone will be comfortable with all that open dialogue overnight – the benefits of a successful implementation are obvious. This holistic approach to human capital management will help your employees to grow, strengthen their investment in their work, and keep your entire organization competitive.

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    Brent Roberts
    Brent Roberts
    Passionate about making benefits and insurance easy to grasp.
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