What is Performance Management?
Imagine you needed to teach a kindergarten class to read. You divided the class into two cohorts, and used a different strategy for each.
One group of kids got hands-on time with a teaching assistant multiple times a week. They talked through all the learning materials in depth, exploring what they enjoyed, what they were struggling with, and what additional support they needed to develop a love of reading.
The other group was simply handed their workbooks and watched a few lessons. They had one big exam at the end of the year—and that was the first time they ever talked to their teacher!
It’s obvious which kids would become better readers.
Poor, outdated performance management—like giving feedback only in one annual review—means treating your employees like the second group of kindergarteners. It means expecting them to constantly improve all on their own, without any tangible support, resources, or even knowledge of how they’re already doing.
Great performance management is about building a culture where everyone is always striving to become their best professional selves. It means promoting open communication, continuous feedback, and career-long learning as organizational values.
What is performance management?
Performance management means analyzing how people at an organization work, and how they can learn to work better.
It’s the practice of proactively monitoring and assessing teams’ outputs and processes, and coming up with actionable goals and takeaways they can use to improve.
Performance management isn’t just about correcting issues, and it should never signal that an employee is in trouble. Every single employee can benefit from paying close attention to their performance, no matter how talented and high-achieving they are.
Effective performance management has a lot in common with coaching. Managers should be working with every employee on an ongoing basis, uncovering what their professional goals are, how they align with those of the organization, and what the practical steps are to realizing them.
Data-driven performance management
‘Performance’ is just how people work—an inherently human, subjective thing. How could data and metrics capture what makes someone a special employee?
But as part of a thoughtful, ongoing feedback strategy, HR metrics and analytics help managers understand and bring out the best in their people.
They also equip HR leaders to make informed decisions about their workforce more broadly, even without personal knowledge of every employee.
Metrics distill one-on-one, qualitative knowledge into hard data that can be easily shared, analyzed, and tracked over time. That means a smarter, more informed people strategy that drives better outcomes across an entire organization.
Top performance management metrics
- Goal attainment rate — what percentage of goals set are actually being met? How close is the employee getting to reaching these goals?
- Demonstration of values — to what degree is the employee putting company values into practice through how they choose to work?
- Demonstration of competence — to what degree is the employee showing the skills, attributes, and characteristics needed for success in their role?
- Check-in completion rates — how often are employees and managers completing regular, one-to-one check-ins? These meetings are crucial to building strong relationships that improve performance
- Employee engagement score — Engagement isn’t strictly a performance metric. Still, it’s crucial to understanding someone’s experience within their company and role and is often found through engagement surveys or questions during regular 1-1s.
Learn more about employee performance metrics in our guide, The Complete Glossary of Performance Management KPIs.
Ingredients for great performance management
Done right, performance management means truly understanding how a workforce is doing—and improving it in an intentional, focused way.
A thoughtful performance management plan, integrated into all organizational levels, is the only way to accomplish that at scale.
But that level of performance management is surprisingly hard to come by. Many companies fall back on cursory performance reviews and engagement surveys. These are often administered just once or a few times a year, a source of stress for employees, and don’t even result in concrete action.
Improving performance is a team sport
No one works in a vacuum. People cannot improve, or deliver better results, without support, tools, and resources.
Every time employees are assigned a new goal or area of focus, the question should be — what do you need to get this done?
Expecting more and more productivity without providing greater resources, or deprioritizing other tasks, is irrational, harmful, and a recipe for burnout.
Make feedback part of how you work
Don’t leave people wondering and guessing about how they’re doing—aim for continuous feedback, not annual or quarterly performance reviews.
Annual performance reviews feel intimidating, over-emphasize the past, and often don’t translate into meaningful improvement. Instead, make feedback an integrated part of the workplace experience.
Set goals with clarity
People must know what they’re working toward, and managers need to be able to measure whether they’re getting there. That’s why clear, time-based goals are such an important part of effective performance management.
Objectives and key results (OKRs) are 15Five’s preferred goal-setting framework. Because this system translates broad goals into smaller, measurable outcomes, it’s easier for everyone across the organization to understand what they’re working towards.
With 15Five’s OKRs tool, it’s easy to set and track your company’s top objectives and build OKRs that unify your team and inspire them to work toward the right goals, so everyone moves forward together.
Make it personal
Employees won’t be inspired or motivated by performance management if it doesn’t feel personally meaningful.
Instead of focusing on employees’ weaknesses as “opportunities for improvement,” double down on their strengths. What do they really shine at, and how can they do more of that?
Development efforts should also be connected to peoples’ own goals. Where do they see their career going, both within your organization and outside of it? How can they improve their performance in alignment with those objectives?
Recognize growth, success, and hard work
Make sure people feel seen and appreciated when they achieve great things and elevate their work.
Wherever they’re starting from, it takes commitment and dedication to reach new heights and develop professionally. Even if employees’ efforts aren’t translating into measurable results just yet, recognize how hard they’re working to get there.
Employee recognition shows people they’re not just a cog in the machine—they’re supported on their professional journey, and their success means something to other people.
15Five’s High Fives feature makes it a breeze to recognize employees’ contributions and the impact that they’ve made.
People-centric performance management, driven by data
It used to be time- and resource-intensive to provide continuous feedback at scale. That’s changed with 15Five’s performance management software.
Quickly and easily set up a review cycle, and start analyzing performance in our holistic system designed for fairness. HR teams can assess employees without bias, and equitably make workforce choices that empower career growth and uplift your entire company.
Get a demo and make flexible, insight-driven performance management a reality at your organization today.