Considerations for building a continuous performance management system
One of the longest standing pillars of HR, performance management is becoming continuous, or more frequent, at many companies. As businesses focus on teams and become less hierarchical, many organizations are scrapping traditional performance management processes, streamlining annual reviews and leveraging technology to encourage more engagement, continuous feedback, and coaching employees throughout the year. As such, more and more organizations are coming to view continuous performance systems as an important part of their HRIS stack.
Continuous performance management system encapsulates the following modules:
- Goals Management: Defining and measuring progress towards goals
- Feedback: Regular self-evaluation and feedback from managers and peers using objective evaluations of key result areas (KRAs)
- Career Development: Regular interactions with managers and HR personnel on personal and professional growth
- Analytics: Analysis of progress, feedback and growth over time to understand employee’s performance in the company
You can find some basic information and workings of CPM in another blog that we published titled (Traditional Performance Appraisal v/s Continuous Performance Management)
In order to build a performance management system, it is necessary to understand the three types of users and their use-cases :
|User role||Goal management||Feedback||Career Development||Analytics|
|Employee||Defines and self-evaluates goals||Self-evaluates on KRAs. Also, provides feedback to peers on their performance||Participates in discussions on career growth with managers and HR personnel||Sees own progress on goals, tracks feedback and evaluations|
|Manager||Defines goals for his/her team and their direct. Tracks and validates their progress||Provides feedback to directs and appreciates and / or provides corrective actions as appropriate||Participates in discussions and clarifies growth opportunities for directs||Tracks and benchmarks performance of directs. Analyzes and takes note of actionable insights from performance data|
|HR personnel / Admin||Ensures goals are defined for all employees and employee goals align with larger organizational goals||Ensures manager feedback and peer feedback is being given regularly at appropriate quality level||Participates in career development discussions with individual employees and ensures the growth plans are attainable & aligns with larger organizational goals||Tracks and benchmarks organization’s performance and compares with industry benchmark or past performance data. Leverages performance data to drive employee recognition and adjust rewards / remuneration. Lastly ensure organization’s performance aligns with strategic targets|
As such, modern continuous performance management systems must include following key functionalities in each of the modules:
- Goal management: The goal management module must enable employees to set goals for themselves, and track their progress on these goals at regular intervals. Managers must be able to view, edit and approve their team’s goals. Tips and examples must be provided as per the designations to ensure that the goals are SMART (Specific, Measurable, Achievable, Relevant, Time-Bound)
- Feedback: The feedback module must allow users to self-evaluate on their performance, as well as receive feedback from their peers and managers. Feedback must be tied in to specific goals, competencies, or result areas. It can be delivered either through the system itself, or by using external channels like surveys or email. Artificial Intelligence can be leveraged to process feedback to derive greater insight about the feedback.
- Career Development: The career development module serves to record discussions between employees and their managers as well as HR personnel related to their personal and professional growth. As with the feedback module, these discussions can be recorded through the system itself or by using external channels like email or audio/video recording. Artificial Intelligence can be leveraged to derive better insights and suggestions for career development.
- Analytics: The analytics module allows employees, managers and HR personnel to track and visualize performance data in the system. This module showcases dashboards for performance at employee level, team level, and organizational level by using visualizations. Analytics can be cohort-based (looking at trends of groups of employees) as well as time-based(looking at performance trends over time)
In order to ensure maximum coverage across the organization and over the whole employee lifecycle, the CPM system must be integrated with the organization’s HRIS. This integration must be done at the data level, ensuring that a common data warehouse is used for all HR and CPM data. This allows HR managers to have the broadest possible understanding of employees’ lifecycles across the organization. It also allows for advanced analytics to be implemented which can be leveraged to identify areas of improvement in the organization’s processes.
Continuous performance management requires employees, managers and HR personnel to have facilitated access to the system on a continuous basis. This can be ensured by supplementing the system with mobile apps that can serve as the primary interface between end users and the system. Mobile applications empower users with convenient exchange of direct feedback, facilitating real-time and contextual collaboration among users and allows for easy communication between users to highlight problems and performance bottlenecks. They can also reduce material and time costs for the organization and supports for digitization of feedback & performance logs on continuous basis
A well-designed CPM system must be tightly integrated into the organization’s HRIS, that incorporates the various modules of continuous performance management (Goal Management, Feedback, Career Development, Analytics) as explained earlier in this blog. Furthermore, the system should facilitate for cross-platform user interfaces for ease of use for all users including employees, managers and HR personnel. As organizations continue to move away from traditional performance management techniques towards modern continuous performance management, a CPM system can prove to be a competitive asset for the organization.