Evolving Performance Management: Strategies for a Modern Workforce

By George Waggott, founder and Roberto Fonseca-Velazquez, law student

George Waggott Law

Management is a tool that helps employees learn from their work experience to improve their skills. Today, upskilling and reskilling employees are widely considered to be essential for the long-term success of organizations. Thinking about performance management has undergone a transformation as HR leaders have increasingly pursued a more employee-centered approach. This article will provide an overview of some of the key HR leaders use in performance management.

Continuous Feedback vs. Annual Reviews

For decades, annual performance reviews were the cornerstone of employee evaluation. These once-a-year meetings typically involved a retrospective assessment of goals, behaviors, and outcomes. While annual performance reviews provided structure, their distance from the events they were reviewing on could limit their usefulness. Employees might wait months to receive feedback on work they had completed. Managers could struggle to recall specific examples or provide actionable insights.

By contrast, continuous feedback emphasizes real-time, ongoing conversations between employees and managers. This approach aims to allow employees to adjust their behaviors, refine their goals, and celebrate their achievements as they happen. It also helps integrate feedback into employees’ work, as feedback becomes a regular part of the work experience rather than a high-stakes event.

In some cases, annual reviews and continuous feedback can be implemented together. In such cases, annual reviews can be used to summarize employees’ progress or to inform compensation decisions. These annual reviews can be supplemented by continuous feedback which facilitates more frequent learning opportunities for employees.

OKRs vs. KPIs: Aligning Goals with Strategy

Setting clear goals is essential to performance management, but the framework used can significantly influence outcomes. Two widely used models are Objectives and Key Results (“OKRs”) and Key Performance Indicators (“KPIs”).

OKRs consist of qualitative objectives paired with measurable key results. For example, an objective might be “Improve customer satisfaction,” with key results such as “Reduce support ticket resolution time by 20%.” OKRs are typically set quarterly and encourage stretch goals that push employees beyond their comfort zones.

KPIs are metrics used to monitor performance over time. They are often tied to operational efficiency, financial health, or compliance. Examples include “Monthly sales revenue,” “Employee turnover rate,” or “Website conversion rate.” KPIs are valuable for tracking long-term progress and identifying trends.

The choice between OKRs and KPIs depends on organizational priorities. OKRs are ideal for driving employees to achieve a specific goal. KPIs are better suited for maintaining consistency and measuring ongoing performance. Many organizations use both, integrating OKRs for specific initiatives and KPIs for day-to-day operations.

360-Degree Feedback: A Holistic View of Performance

Traditional performance reviews often rely solely on input from an employee’s direct supervisor. While this perspective is important, it can be limited. 360-degree feedback incorporates insights from peers, subordinates, and even external stakeholders. The 360-degree approach provides a more comprehensive view of an employee’s strengths and weaknesses.

360-degree feedback is particularly valuable for leadership development because it incorporates qualities that may not be fully captured through qualitative metrics alone. 360-degree feedback provides employees with feedback on their interpersonal skills, collaboration, and influence.

360-degree feedback should protect the anonymity of the people providing information on an employee’s performance. HR leaders should also ensure that feedback is used for employee skills development rather than punitive measures.

Conclusion

As organizations evolve, so too must the approaches we use to measure and support performance. HR leaders should carefully select the performance management approach that suits the needs of their organizations.

For more information about George Waggott Law, please see: www.georgewaggott.com, or contact: george@georgewaggott.com