How to Build the Perfect Performance Management Process

Nov 18, 2021 | Performance Management

Preparing for the new year? Consider how you can improve your team’s performance management process. A strong performance management program often takes companies from stagnation to new heights.

Today, many employees prefer a continuous performance management process, one that fosters ongoing growth. In fact, PwC found that 60% of employees want feedback on a daily or weekly basis. For employees under 30, that number is 72%. In contrast, traditional performance management reviews are often annual. Employees don’t always receive enough in-depth feedback between these reviews, if any at all.

Let’s dive into how to upgrade your performance management process. We’ll start with how to implement each of the three core steps.


1. Master Each Step of the Performance Management Process

2. Training Managers to Excel as Coaches

3. Monitor Overall Success and Engagement

1. Master Each Step of the Performance Management Process

The performance management process contains three main elements: planning, coaching, and reviewing. By using the right approach and tools for each of them, you’ll gain the best results. Read on to learn how to implement all three stages of the process.

Woman doing performance reviews on laptop video call from home
Credit: Ketut Subiyanto/Pexels

Planning Throughout the Performance Management Process

Set employees up for success with a thoughtful planning process. Keep these points in mind to ensure successful outcomes.

Key Components

  • Discussion of both expected behaviours and results. Interpersonal skills are just as important as subject-matter skills and outcomes achieved, notes SHRM. State performance standards for both in writing so the employee can envision what success looks like.
  • Setting specific, measurable goals with employees. Define objective metrics of success for each goal. These should be quantifiable, making success easy to evaluate. For example, “Secure five new clients by the end of this quarter” could be a measurable goal for a sales professional. Identifying 25 new leads could be a stepping stone toward that goal. 
  • Providing opportunities for development. Help employees to meet agreed-upon needs for growth through educational resources. Workshops, cross-training experiences, job shadowing, and opportunities to help out with higher-level projects can all prove beneficial.

Best Approach

  • Ask about the employee’s career goals to start the conversation. Tailor plans to support both the employee’s professional goals and the company’s goals.
  • Set challenging goals with employees, which help them achieve greater results than moderately difficult goals. Create goals in three or fewer areas, advises SHRM. Otherwise, they’ll feel too overwhelming.
  • Address the “What,” “How,” and “Why” of each goal. Define goals clearly, then make sure employees have enough direction on how to proceed. Explain how their own goals support the organization’s next-level goals. 
  • Be agile, adapting as needed if organizational strategy or outside circumstances change. 
  • HR should collaborate with managers across the organization to set performance standards. This will help ensure fairness.

Here is an example of strong performance standards set for a mid-level employee, from SHRM. They pertain to communication, but the same format can be used for any desired competencies:

“Effectively prepares timely, clear, organized and concise communications on highly complex, sensitive or controversial topics; communications require minimal revisions. Effectively tailors communication style and customizes materials to communicate highly complex, sensitive or controversial information.”

Helpful Tools

A goal-tracking system will help you set well-structured goals and track progress. The right tool can streamline daily performance tracking so it never falls out of sight and out of mind.

Two colleagues happily discussing the performance management process
Credit: Jason Goodman/Unsplash

Coaching Throughout the Performance Management Process

Coaching is the “meat” of the performance management process, requiring daily effort. Here are its key elements and best practices.

Key Components

  • Observation of employees’ progress. Take time often to consider how they’re performing and how it compares to their past performance.
  • Frequent feedback. Continuous feedback will deliver an in-depth understanding of where they need to strengthen their performance.
  • Asking for employee input on their progress. You might have them conduct periodic written self-reviews. Ask for this input in person more often, too.
  • Help with troubleshooting challenges they encounter. Provide valuable advice, reassurance, and guidance as needed.

Best Approach

  • Create a sense of psychological safety about coaching. How? Ensure employees that check-ins are intended to promote their growth, says TEDx speaker Joe Hirsch in Forbes
  • Check in often. “Shift from high-stakes, low-frequency feedback to low-stakes, high-frequency conversations,” urges Forbes. This means holding check-ins on a daily basis—or at least several times a week. Constructive real-time feedback can help shape their behaviour in the moment. Rather than critiquing something they’ve done, it provides guidance on what they can do now. This gives employees a sense of empowerment.
  • Prompt employees to think strategically, generating their own ideas but running them by you as needed. You might then share how you’d handle the situation or give feedback about their ideas. Make sure they have the resources needed to carry their ideas out, too. For example, if a marketing employee is trying to revamp product packaging, make sure they have the design support they need.
  • Provide the same opportunities for employees in similar roles or job levels. Consider whether unconscious bias has led you to prioritize employees that you identify with more strongly. Evaluate whether you’re providing the same level of advice, resources, and mentoring to each individual.
  • Tailor coaching methods to employees’ learning styles and preferences. For example, if an employee absorbs written materials well, share articles or books. Then, discuss these materials in a coaching session.

Example of A Productive Check-In

Manager: “How are your efforts to solve problem A going?”

Employee: “I’m feeling stumped and unsure where to go from here.”

Manager: “What have you tried so far, and why didn’t it work?” Pauses for employee to explain. “Do you have any other ideas?”

Employee: “This may seem far-fetched, but here is one idea…”

Manager: “That actually sounds very promising. I’d just like to suggest a couple of modifications. And I think Janet in purchasing might be very helpful in pulling this off. I’ll get you two connected.”

Helpful Tools

Instant feedback software can facilitate the coaching process, especially on hybrid and remote teams. It allows you to check in throughout the day whenever feedback arises!

Anonymous colleagues discussing the performance management process
Credit: Alex Green/Pexels

Reviewing Throughout the Performance Management Process

Now, let’s examine what the reviewing phase involves and how to get it right.

Key Components

  • Performance reviews. Formal reviews provide a chance for an in-depth discussion of the employee’s progress during a longer timeframe. Rather than holding them once per year, you might opt for once per quarter. While in 2016, 82% of companies stuck to the annual review cycle, that number dropped to 54% in 2019, according to a Workhuman report. Instead, many companies are now opting for tighter review cycles. This allows managers and employees to more easily reflect on the review period. Quarterly reviews also tend to feel less intimidating, becoming a routine conversation.
  • 360 feedback reviews. These reviews provide input from a range of people who work and interact with each employee. This provides a richer perspective of strengths, weaknesses, and opportunities.

Best Approach

  • Implement a standardized system with all employees at a similar level. Use the same rating scale and similar criteria for all employees to make reviews fair and balanced.
  • Keep detailed notes, tracking performance on a daily basis. Take time each week to reflect on each individual’s progress based on evidence. When noting an accomplishment, describe the situation, the employee’s specific efforts, and their impact, says SHRM. 
  • Ask employees to bring a detailed list of their key results to your review meeting. This can work better than a formal self-evaluation because it doesn’t directly compare your evaluation against theirs, says SHRM.
  • Frame discussions in a forward-looking way, maintaining a coaching mindset. This can enhance performance by 13%, says Gartner. Just 10% of employees feel engaged from receiving negative feedback, but feedback that concentrates on the future feels positive. Focus discussions on growth opportunities, the company’s future needs, and the employee’s aspirations.
  • Have collaborative conversations. Ask the employee how things could improve, both individually and within the broader team.
  • Follow best practices for conducting 360 reviews. Seek input from a balanced range of people. Include those the employee knows well, peers in other functions, and people at various levels of the hierarchy. Make sure employees know the 360 review won’t guide any promotional decisions, too. 

Future-Focused vs Past-Focused Conversations

Past-focused: “Your main weakness is your communication skills. You are great at the technical parts of your job. However, your colleagues often had trouble collaborating with you during that last project. The rest of our design team had difficulty understanding what you meant. At times, you dropped off the radar, too. Staying in your own silo disrupted the workflow process and team cohesion.”

Future-focused: “You have impressive technical skills. It’s tough to translate complex knowledge to less technical peers, but I’d really like for us to bridge the gap. If you can share a quick project update every few days, I think the workflow process will really improve. I’d also like to help you distill some of your specialized knowledge into easier-to-understand language. What if you give a mini-lesson on what you’re doing at our weekly meetings? Use me as a sounding board to prepare your thoughts beforehand. That way, we’ll all be speaking the same language in meetings.”

The future-focused conversation shares actionable steps for improvement. The manager could also ask this employee for his perspectives on how communication can improve.

Helpful Tools

Performance review software can streamline the process, making it fair and balanced between all employees. Additionally, 360 review tools can make collecting 360-degree feedback simple.

As you coach and review employees’ efforts, recognize their hard work. Share public recognition at times. A recent study found that more recognition would make 79% of Millennial and Gen Z employees more loyal to their company.

2. Training Managers to Excel as Coaches

Implementing a new system and guidelines is not enough. Managers themselves need ongoing guidance to put it into practice effectively. Quite often, managers themselves need a great deal of support and coaching on how to mentor others to success.

Instill Leadership Skills

Equipping managers with leadership skills will help them handle each of the above steps effectively. You can help them to grow these skills by offering the following resources:

  • Mentoring from experienced leaders
  • Job shadowing opportunities with these leaders
  • Courses on personnel management
  • Workshops on leadership skills

For example, pair up a newer manager with an experienced leader. Here’s an example of what that can look like:

Greta received a promotion to her first managerial position. So, her HR department paired her up with Amy, a leader known for being an excellent mentor. They met up for lunch twice per month for an in-depth check-in. During this informal chat, Amy provided advice on Greta’s most pressing concerns. She also asked questions that helped Greta understand and enhance her personal leadership style. In turn, Greta would share new insights from her management courses. After their meetups, Greta always felt recharged and better equipped to lead her team. 

And, of course, use good planning, coaching, and reviewing with managers themselves. By doing so, you’ll help them come into their own as leaders.

Review the Reviewers

As an HR department, continuously observe managers’ review styles and ratings. Are they fair and equitable to all employees, or do ratings seem skewed? Then, help them course-correct as needed. 

For example, say one manager consistently gives poor reviews to younger employees. Begin by taking a hard look at their performance management data. Compare it against that of older employees reviewed by the same manager. If the low ratings seem unjustified, sit down with the manager to re-explain how to use the objective review criteria. Explain the pattern you’re seeing and why it must be corrected. And follow a forward-thinking mindset, explaining how this will benefit the team!

3. Monitor Overall Success and Engagement

To evaluate the success of your performance management process, track engagement and results over time. Determine whether engagement has increased along with the implementation of your performance review system. Pulse surveys are a great tool for tracking engagement. Look at how overall productivity has changed as well.

Now you understand how to plan, coach, and review employees’ progress. As you mentor your managers themselves on how to implement this system, you’ll see growth at every level. For more essential guidance, download our free e-book on performance management. It provides crucial insights that will strengthen your grasp of how to achieve excellence in performance management. 

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