Transitioning to a continuous performance process: 3 keys to success

As the HR profession evolves, it continues finding innovative ways of tackling traditional problems.

Unfortunately, in areas such as Performance Management, we sometimes open our toolkit and pull out the same old solutions.

For many years HR has been stuck on a hamster wheel of annual reviews supported by one-to-one check-ins and coaching sessions that rarely actually happen.

Research from Gallup uncovered that almost half of employees receive feedback only a few times a year, if that often, and less than a quarter of workers felt the feedback they receive in those sessions is actually valuable.

At Collinson, we decided to take a leap and turn the traditional, ineffective appraisal model on its head. Instead of placing the process at the start of our thinking, we put the customer first.

We committed to first consider our people’s needs and experience and then define how we would link that to increased performance and engagement.

As part of that effort, we changed how we talked about the entire process. I was never a fan of the term ‘performance management.’

We have people in our business from 17 to 67 years old, most of them clever and very capable. Therefore, the need for close ‘management’ has rarely been a big issue for us.

So we coined the term ‘performance engagement’ to more accurately reflect what we are trying to achieve.

To help us realize our vision of performance engagement, we partnered with Betterworks to deploy a digital platform that could support a new way of interacting with our people to encourage and support them.

We broke away from the annual performance cycle, including killing off the annual appraisal, which felt like saying goodbye to an old friend that was never really much help.

We replaced it with a continuous performance improvement structure, whereby people set and achieve objectives on an on-going basis —  as one is completed another one is introduced.

Overall performance is reviewed every quarter in the same way, using a framework of structured monthly conversations on topics such as performance, well-being, coaching or personal and professional growth.

My instinct proved correct. After moving to a continuous performance process, we saw a noticeable increase in employee engagement and connection to our organizational goals.

Lessons learned

Of course, disrupting a process as entrenched as the annual performance review has become, we had to learn a lot along the way, from how to secure executive buy-in, to training managers and rolling out the program to our employees.

Here are three key concepts we learned through the process that will help your organization gain the huge benefits of moving to a continuous performance management process. 

1) Show employees how performance engagement benefits them

I have never talked to ANYBODY who likes doing annual reviews Most employees and managers find them a bureaucratic  burden, something which they are forced to do that they’d rather avoid. And that’s the best-case scenario.

At worst, they are demotivating, expensive and ineffective at their primary purpose of improving performance.

Organizations need to break this painful cycle. The great news is you can replace it with a process that employees will actually demand because they find it valuable to their career development.

Language is a powerful tool in that transformation. At Collinson, simply renaming the programs from “performance management” to “performance engagement” immediately signaled that the new process focused on engaging with the talents and ambitions of each employee.

This forward-looking focus not only reduces employees’ anxiety, it boosts program participation.

And it can also have a positive impact on your recruitment efforts, as the best candidates increasingly look to join forward-thinking organizations that are committed to employee development.

Beyond a language change, it’s important to communicate that a continuous process is more efficient than conducting annual reviews.

When we first announced that we were moving from annual to quarterly reviews, our managers worried this would mean an increased workload.

Making the process more frequent made the process significantly lighter, faster, less stressful and more valuable for everyone involved.

I was able to show our executives and managers that, while our previous annual process required users to input data in 30+ fields, our new quarterly process pared this down to just a few key questions.

When designing our review questions, we kept asking ourselves, “What does the employee need to know?” and, “How does this add value?”

Another important change we made to benefit our employees was upgrading the performance development technology we use. This is a critical step for any organization looking to improve their engagement process.

Compared to the simple and efficient apps employees use in their everyday lives, many of HR’s goal-setting and review systems are outdated, overly complex and cumbersome.

With Betterworks as our technology partner, we were able to make it easy for our employees to continuously create and update goals and for managers to provide regular and ongoing performance feedback.

Upgrading our HR platform had an immediate positive impact on our participation and engagement rates — where less than half of our team recorded their goals in our legacy system, that rate reached 98% of employees in our first year using the new system.

2) Start from the top 

Research from management consultants DDI found that those companies who clearly define and then act on a sense of purpose outperformed financial markets by 42%. But that doesn’t happen without hard work and ongoing commitment.

Connecting individual effort to an organization’s mission requires continuous alignment and re-alignment of everyone’s work within the organization to encourage and sustain the levels of engagement needed for higher performance.

HR must help senior executives see the connection between employees’ alignment to goals and both increased employee engagement and better performance.

And that requires speaking their language. You want to tie the effort of moving to a continuous process to the very real business outcomes senior leaders are looking to achieve. 

Then, once you have the senior staff on board, move your focus to the individuals who have the greatest impact on your workforces’ overall performance: your people managers.

At Collinson, we provided on-site group training for our managers and also trained people at each location to act as local champions.

We encouraged friendly competition among employees and managers to boost initial adoption, sharing leaderboards showing which regions had the highest goal completion rates.

3) Have a plan, but stay agile and open to learning

Once you get the buy-in and the budget to implement a new Continuous Performance Management process, it will be tempting to go all in and try to roll out everything at once.

But it is more critical that your workforce and the business to start seeing value as quickly as possible.

We learned from our rollout that it is better to get started quickly with just one or two elements of the program and allow time for everyone to learn and adapt to the new process and platform.

As leadership, management and employees see immediate value from the program, you’ll acheive higher, and faster,  adoption.

This agile approach to rolling out continuous performance management also encourages feedback from your managers which you can use to refine the process.

And when people know their ideas are being acted on they are more engaged in working with and sharing their opinons about how to improve the process.

We’ve now reached the point where, if a manager isn’t coming to HR with suggestions about how we can make our performance engagement process even better, we wonder if he or she is paying close enough attention.

And we are getting ideas from all the way up our organization. When you get focused, direct feedback from your CEO and can act upon it, you know that you are making real progress.

With quarterly reviews successfully in place and evolving, we’ve created a roadmap for the next year.

We’ll encourage people to start setting specific quarterly goals and introduce added value to the process, such as marking International Mental Health Week by releasing wellbeing conversations and integrating 360-degree reviews into our processes.

Other factors will impact your organization’s ability to implement a continuous performance process successfully, but I believe the above three are the most important because each one influences the others.

A feedback loop for continuous performance improvement

Leadership buy-in helps with employee engagement and ensures leaders contribute to the evolution of the process.

Engaged managers will also provide feedback on the process and their enthusiasm will be picked up by employees, enhancing everyone’s appreciation of the benefits of a continuous approach.

Finally, an agile process helps with early adoption and engagement because people don’t expect a perfect system, and it’s easier for leadership to back an idea that will deliver results quickly. It also enables you to learn quickly and apply for improvement, which has been key to our success so far.

By transitioning to a Continuous Performance Management model, HR teams can position individual employees and the entire organization for success.

Just remember to keep your focus on creating a process that delivers inherent value for employees, provides more frequent opportunities for communication across all levels of your business, and leaves room for ongoing innovation and refinement.