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The future of performance management

The future of performance management is a topic that is being hotly debated by HR professionals and business leaders alike. Some believe that the traditional annual review is outdated and ineffective, while others argue that it is still an essential tool for managing employee performance.

In this blog post, we will explore the future of performance management and discuss some of the key trends that are shaping this field. We will also provide some tips on how to stay ahead of the game and ensure that your performance management system is effective.

The Traditional Annual Review

The traditional annual review is a performance management system that has been in place for many years. In this system, employees are typically evaluated once a year by their manager. The evaluation is based on a set of criteria, such as performance goals, objectives, and behaviors.

If you are reading this article I imagine you have been called in for an annual review. Did you like it?  There are a number of reasons why the traditional annual review is being called into question. First, it is often seen as a time for managers to simply criticize employees, rather than providing them with constructive feedback. Second, it can be a very stressful experience for employees, who may feel like they are being judged on their performance over the past year. Third, it can be difficult to track employee progress over the course of a year, as there are often many factors that can impact performance, such as changes in the business environment or the employee’s personal life.

Read through these 3 experiences I have had and see if you can relate them to your company experiences.

Several years ago, as I was beginning to manage projects on my own, I was faced with a tough client decision.  It was nearing the end of the project and the client’s budget was getting very tight.  At the client’s request and because my company had done very well on the contract, I wrote-off a portion of our last billing to that client.  There was no justification for writing off several thousand dollars other than to keep the client happy.  What motivated me to make that decision?  Was it the right decision?

A few years later, another difficult decision came up.  I had the option of using two different team members on a project.  One was very busy and the other one had very little to work on.  Because of past experiences with each of them, I chose to wait until the busy team member had room in his schedule.  Both were capable of doing the work; however, the busy team member was much more efficient and would get the work done with less oversight.  What motivated me to make that decision?  Was it the right decision?

And finally, just a couple years ago I was faced with another tough decision.  I was supporting one of our teams in completing a project that was nearly over budget.  The support I was offering may have been billable to the client and could have been argued to be within our scope of work. But it was equally critical to completing the project as it was in retaining the client for an upcoming project.  Because the project was nearly over budget and because I was working hard to win the next project with the client, I did not bill the work to the client.  What motivated me to make that decision?  Was it the right decision?

As I think back on these decisions and other decisions I have made over my career, I wonder “would I make that same decision now?”  What influenced me to make the decisions I did at the time?  How did our company culture at the time influence those decisions?  These are deeply philosophical questions and there is much more to individual decisions than simply what your company culture drives.  However, as business leaders, it is important that we work on the part of that “decision equation” we can control. Monitoring and policing your team’s daily performance was once considered performance management.  Now we call that micromanagement. This is no longer an option if you want to keep employees. We love our template manage by objectives to help give clarity to reviews. 

The Future of Performance Management and How to Stay Ahead of the Game

The traditional annual review is no longer effective in today’s fast-paced business world. Employees are constantly learning and growing, and their needs and goals are changing. As a result, organizations need a performance management system that is more flexible and responsive. We call this building the right culture.

Some of the key trends that are shaping the future of performance management or as we call it, building company culture, include:

  • Continuous feedback: This approach involves providing employees with feedback on a regular basis, rather than waiting for the annual review. This can be done through one-on-one meetings, team meetings, or even through online tools. Continuous feedback helps employees to stay on track and make adjustments as needed.
  • Goal setting: This approach involves setting clear goals for employees and providing them with the resources they need to achieve those goals. This can help employees to stay focused and motivated. We also love setting and tracking KPIS. To learn more about KPIS read this article. To learn how to set effective KPI’s download our 5 steps click here.
  • 360-degree feedback: This approach involves collecting feedback from a variety of sources, such as managers, peers, and customers. This helps to provide a more holistic view of employee performance. Transparency is key when providing and receiving feedback. When an employee knows what to expect and understands their role, they are able to accept all forms of feedback.
  • Development plans: This approach involves creating a plan for each employee’s development, which can include training, mentoring, or other opportunities. This helps employees to grow and develop their skills.  We also align this with setting effective KPI’s.

Tips for Staying Ahead of the Game

If you want to stay ahead of the game in terms of company culture there are a few things you can do:

  • Keep up with the latest trends: There are many new and innovative approaches to performance management being developed all the time. Make sure you are aware of these trends and consider implementing them in your organization. We don’t consider Plentive a “trend” but we do consider it innovative and company changing. Schedule a 15 min. demo to learn more about our employee incentive plan software.
  • Get employee feedback: The best way to improve your performance management system is to get feedback from your employees. Ask them what they like and dislike about the current system and what they would like to see changed. Send a weekly email, anonymous survey or even an office text thread through a texting app are simple automated ways you can handle the feedback without being biased.
  • Be flexible: The world of work is constantly changing, so your performance management system needs to be flexible enough to adapt to these changes. Be willing to experiment with new approaches and make changes as needed. This is where Plentive comes in ;)


The future of performance tracking is bright. There are many new and innovative approaches being developed that can help organizations to improve employee performance. By staying up-to-date on the latest trends and getting employee feedback, you can create a performance management system that is effective and sustainable.

My team and I have found that taking the approach of building a culture rather than managing an office hits near a home run. This means creating an environment where employees feel valued, respected, and supported. It also means providing them with the resources and opportunities they need to grow and develop.

When employees feel like they are part of a team and that their work is valued, they are more likely to be engaged and productive. They are also more likely to stay with your organization, which can save you time and money in the long run.

If you are looking to improve your performance management system, I encourage you to consider taking the approach of building a culture rather than managing an office. It is an approach that has worked well for my team and I, and I believe it can work well for you too.

Wondering how to build an incentive program that hits on performance, incentives, company culture and keeps employees happy? Schedule a 15 Min. Consultation with Plentive.

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