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Article

10 minutes

9 Performance Management Trends and How They’ll Boost Performance in the Evolving Workplace

HR & workforce management

Author

Lorelei Trisca

Published

July 15, 2024

Last Update

July 15, 2024

Table of Contents

Holistic employee performance reviews

The shift from annual reviews to continuous feedback

Higher alignment of individual and organizational goals

Decision-making using real-time performance data

Agile performance management with OKRs

Increased emphasis on learning and development

Focus on the importance and development of soft skills

Acknowledging that employee wellbeing matters for performance

Increased use of technology and automation in performance management

Build a high-performance workplace with Deel Engage

Key takeaways
  1. Technology and data analytics in the performance management process is on the rise enable evidence-based assessments and optimizing employee performance and development
  2. Automated feedback systems, AI-driven insights, and performance management software enhance efficiency, provide real-time data, and improve the quality of feedback.
  3. Traditional one-way, annual performance reviews are being replaced by extensive review methods like 360-degree reviews and continuous feedback—these approaches provide multi-directional, real-time feedback, reducing biases and offering a more accurate assessment of employee performance.
  4. The latest trends in performance appraisal focus on the holistic development of employees, emphasizing their wellbeing and continuous learning—incorporating wellbeing metrics and offering opportunities for professional growth ensure employees are engaged and satisfied.

Recent years have seen significant developments—pandemic lockdowns, remote and hybrid work, the rise of communication platforms, and business disruptions, to name a few.

Employee performance evaluations are constantly under development to help organizations stay close to employees and their performance.

For these reasons, current trends in performance management and employee evaluations will continue to define, shape, and maintain secure workforces.

This article looks at the top performance management trends. These are the shifts you need to prepare for if you want to maximize the potential of your people through performance management in an ever-changing workplace.

Holistic employee performance reviews

Traditional performance reviews use feedback in one direction—from managers to their direct reports. This results in a single perspective on performance evaluations (i.e., the manager’s).

While straightforward, this approach has a narrow scope and is subject to manager biases.

As an alternative to traditional performance reviews, 360-degree reviews offer a broader, more holistic approach, polling various sources to deliver meaningful feedback about a subject’s work performance:

  • They feature feedback in multiple directions—from colleagues, managers, direct reports, customers, and senior leaders—bringing several perspectives to evaluations.
  • They are less subjective and more candid, so managers can make better decisions about the steps to ensure employee professional development and performance improvements
  • They are more comprehensive than traditional performance reviews
  • They help avoid bias and skewed observations for more accurate and fair employee performance assessments

Both small and large organizations, including Netflix and General Electric, have already adopted 360-degree reviews. These take more time and effort but generate honest and helpful feedback for performance evaluations.

Bonnie Whitfield, Human Resources Director of Family Destinations Guide (FDG), explains why the 360-degrees approach works for her company:

“I believe [360 feedback] is more accurate than the traditional one-on-one meeting between employees and their managers. It allows me to get feedback from others who work closely with the employee in question and gives me insight into their work habits, personality traits, and strengths/weaknesses in real-time.

For example, if someone who works closely with an employee tells me that they are not doing well at their job or are experiencing issues with other employees, this can be reflected in their performance review and my observations about them.”

360-degree performance reviews, therefore, represent a more robust and effective means of reviewing employees than standardized performance reviews.

Companies can use employee self-reviews as conversation starters for coaching and development conversations. Starting with self-reflection reveals where mentees have high or negative assessments of their work. It makes it easier for mentors to meet mentees where they are and tailor a growth path for them.

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The shift from annual reviews to continuous feedback

Feedback isn’t new, but the way it’s given and received is evolving. While one-way, formal, and infrequent feedback (e.g., annual reviews) has dominated in the past, the future of feedback is about a continuous exchange of information and regular check-ins.

The older ways of feedback have not been working well. Only 22% of employees strongly agree that their companies’ performance review process is fair and transparent.

Many organizations are replacing traditional annual performance reviews with continuous feedback mechanisms, driven by the need for more agile and responsive performance management.

Continuous employee feedback, instead of (or alongside) annual performance reviews, supports a real-time environment of regular feedback for improving and growing your people.

It “enhances the employee experience,” says Jessica Kriegel, Chief People and Culture Officer at Experience.com. It also leads to better performance monitoring as it “allows real-time communication between employees, managers, and HR so that the data and processes critical to the company and employee growth can be managed in one place,” Kriegel adds.

Higher alignment of individual and organizational goals

By directly linking employee effort to your organization’s goals, goal-setting and feedback conversations are more meaningful, according to Gallup.

The following shifts can promote a stronger alignment between performance and outcomes when setting employee performance goals:

  • Personal context: Integrate personal goals, such as wellbeing or learning skills, whether or not they’re directly related to work
  • Adopt a project-based framework: Evaluate your people based on project outcomes rather than time spent on the job, forming explicit links between outcomes and compensation
  • Set clear, purposeful goals: Articulate well-defined goals by making them SMART, i.e., specific, measurable, achievable, realistic, and timely
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Decision-making using real-time performance data

Data management and workforce analytics are becoming more available and valuable for organizations in all aspects of their operations. Performance evaluation is no exception.

Using data analytics for informed decision-making can provide deeper insights into employee performance and areas for improvement.

The manager is an unreliable source of employee evaluation, and research has proven this. Improved analytics should take more of performance evaluation out of the hands of managers to help them focus on things where they can have a much greater impact.

Jason Lauritsen,

Leadership and management expert

By using data gathered in real-time, organizations can evaluate their people in a more timely and effective manner by:

  • Promoting evidence-based assessments: Data-driven decisions form an objective basis for monitoring how people are performing and help improve employee morale, performance, and development
  • Enhancing reporting: Tools like dashboards with analytics and visuals give a more insightful and versatile way to monitor worker performance
  • Facilitating better talent management: Companies with effective talent management programs are six times more likely than others to report higher returns, according to LinkedIn—with performance monitoring being a hallmark of solid talent management, timely and data-rich performance monitoring leads to better talent management and succession planning outcomes for organizations
  • Minimizing biases: Research shows that discrimination and implicit bias can reduce productivity, lower engagement, and diminished wellbeing due to bias—real-time performance data increases the transparency, understanding, and objectivity of performance monitoring, reducing actual and perceived biases

Agile performance management with OKRs

Historically, companies have focused on outcomes rather than inputs or activities for employee performance evaluations—they would use performance reviews to pivot to what impact an employee has made on the organization rather than how many hours they worked or how much paper they filed.

Dynamic goal-setting frameworks like OKRs (objectives and key results) align individual achievements with business objectives more effectively.

OKRs provide a clear structure for setting and measuring goals, ensuring employees work towards outcomes that drive the business forward. This approach emphasizes accountability and transparency, as objectives and their corresponding key results are visible and measurable.

By setting ambitious yet achievable objectives and defining key results, employees clearly understand what is expected of them and how their work contributes to the broader company goals.

This boosts motivation and fosters a sense of ownership and purpose. Regular check-ins and reviews of OKRs enable timely feedback and adjustments, ensuring that efforts remain aligned with strategic priorities.

Focusing on outcomes with OKRs encourages innovation and problem-solving as employees aren’t merely completing tasks but are driven to find the most effective ways to achieve impactful results.

This shift from activity-based to outcome-based evaluations ultimately enhances productivity, engagement, and overall organizational performance, creating a more dynamic and results-oriented workplace culture.

Increased emphasis on learning and development

Modern performance management focuses on holistic employee development rather than just evaluating past performance. As a result, companies are increasingly focused on providing opportunities for employees to learn new skills and develop themselves professionally.

Many employees leave their jobs because they don’t find them challenging enough, which can lead to boredom and the desire for change.

Managers should encourage employees to learn new skills to grow professionally and stay relevant in the workplace, improving employee retention rates in the process.

Happy employees who see an opportunity for advancement at their current companies are likely to benefit from:

  • Clarity in the company’s career development policies and potential career paths
  • A detailed description of a job’s duties, responsibilities, and expectations
  • A feedback system that works across all levels of the organization
  • The flexibility of having multiple development opportunities as far as their career is concerned

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Reflecting on coaching and mentoring at Ling App, a gamified language app, their HR leader, highlights:

Our coffee breaks are famous across the company. Employees look forward to these to discuss issues and challenges and celebrate success. Employees initially have a weekly coffee break and once in two weeks after the probationary period

Jarir Mallah,

HR leader, Ling App

Focus on the importance and development of soft skills

Soft skills are essential for fostering a collaborative and productive work environment, enabling employees to effectively interact, solve problems, and lead initiatives. As automation and technology take over more technical tasks, the importance of these human-centric skills continues to grow.

Within this context, recognizing and nurturing soft skills such as interpersonal, presentation, and problem-solving skills remain a top priority. These are the three soft skills that learning and development managers are adding the most to their training materials to prepare for the AI era.

To recognize soft skills, managers should observe how employees interact with colleagues, handle conflicts, and respond to feedback. Additionally, self-assessments and peer reviews can provide valuable insights into an employee’s soft skillset.

Developing a plan to nurture soft skills can look like this:

  1. Conduct regular assessments to identify current strengths and areas for improvement and share constructive feedback focused on specific behaviors and outcomes
  2. Offer workshops and training sessions focused on critical soft skills your team lacks
  3. Pair employees with mentors or coaches who can offer guidance and use one-on-one meetings to discuss progress and challenges
  4. Encourage collaborative projects that let employees practice and develop their interpersonal skills in a natural setting
  5. Build a feedback-based company culture using tools such as 360-degree feedback to give a more detailed view of an employee’s performance from multiple perspectives
  6. Reward employees who display strong soft skills by showcasing examples of worthwhile communication, teamwork, and emotional intelligence

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Acknowledging that employee wellbeing matters for performance

Recognizing that employee wellbeing matters for performance is another trend. Incorporating wellbeing metrics into performance assessments underscores the importance of a healthy work-life balance in achieving long-term success and employee satisfaction.

Gallup reports on mental health and wellbeing note that global employee engagement has stagnated despite technological advancements and increased productivity. Overall, employee wellbeing has also consequently declined over the past years.

This affects individual employees and has broader economic implications. According to Gallup, low employee engagement and performance cost the global economy approximately $8.9 trillion, equivalent to 9% of the global GDP.

Organizations are increasingly integrating wellbeing metrics into their performance assessment frameworks to address these challenges. This approach recognizes that physically, mentally, and emotionally healthy employees are more likely to perform at their best and contribute positively to the organization. Wellbeing metrics may include:

Increased use of technology and automation in performance management

It is becoming standard performance management practice for companies to use technology in their performance appraisal process. With performance review apps, employees can:

  • Check the basis on which they are being evaluated
  • Read the reviews they have received from their peers
  • Check the progress based on pre-set goals

Performance review tools are fantastic for addressing the operational challenges of gathering and reviewing 360 performance feedback. Additionally, technology allows companies to configure their processes with anonymous feedback.

However, there is one element to note. Technology isn’t enough to drive high-performance management. You still need to add coaching and support to the equation.

Some other ways to use technology for performance management include:

Automating employee feedback

Automation can capture, store, track, and manage all feedback given and received.

Feedback automation brings several benefits, including:

  • Improved efficiency
  • Enhanced security
  • Better productivity
  • Access to real-time data
  • More qualitative and comprehensive feedback insights

Leveraging artificial intelligence (AI)

Advanced technologies, including AI and analytics, are permanently changing how organizations measure and enhance employee performance.

Machine learning and AI are helping firms identify and automate opportunities for learning and growth.

With Deel Engage’s AI assistant, companies can:

  • Summarize and analyze reviews
  • Set up performance reviews
  • Help reviewers write constructive feedback
  • Support employees with growth plan suggestions based on past feedback and goal performance

Deploying self-service platforms

Performance management software managed in the cloud helps create a self-service experience for employees. User-friendly mobile apps, for instance, allow people to check their leave balance, monitor their KPIs, and access feedback notes directly.

Supporting mental health and wellness

Technology can boost employee wellbeing through automated check-ins on personal health goals and access to mental health resources, such as assistance from a psychologist.

Build a high-performance workplace with Deel Engage

At Deel, we understand how workplaces are evolving and have the tools to bring the best elements of today’s performance management strategies to your organization. These include:

  • Highly customizable 360-degree feedback software that’s easy to set up and use
  • Advanced anonymity settings to help you manage which feedback should be anonymous and which should not
  • Feedback systems that account for competencies, culture, and teamwork
  • Data insights to enhance 1:1 interactions
  • Employee development solutions to drive numbers instead of merely assessing them

By combining the world’s best HR practices with our proprietary, innovative technology, Deel equips companies with the tools and systems to enhance performance management.

Explore our performance management software and see how it can revolutionize how you assess and develop talent.

Request a demo today to see how we can help you build a thriving, motivated workforce.

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Retain top talent and foster a culture of high performance with our AI-powered people suite to manage development, performance, and training programs from one single place.
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