What is Continuous Performance Management?

Kathleen O'Donnell
April 30, 2024
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Imagine a world where you got to play your favorite board game, online game (Wordle addicts unite!), or sport five days a week, every week for a year. But here’s the catch: you wouldn’t know your score until you’d played for an entire year—and it was dumped in your lap in one quick and uncomfortable check-in. 

That would make it pretty hard to know how you’re doing, how to adjust your strategy accordingly, and to make improvements in real time. 

Well, that’s the scenario in your workplace if you conduct performance reviews once per year, like most companies. Employees need, and crave, more frequent information on their performance to know where they’re doing well and where they need to make changes. 

That’s where continuous performance management comes in. Just like you should deliver employee feedback more often so they feel seen and valued, you should also offer employees updates on their performance more than once a year in a formal review. 

Continuous performance management is an exciting and effective way to create a high-performing culture. Here’s everything you need to know about it, from what it is to the business case for it and the many benefits it brings to both employees and your organization. 

What is continuous performance management?

Instead of waiting until that high-stakes, high-stress annual performance review, companies that use continuous performance management incorporate those conversations into regular check-ins and conversations throughout the year. 

Continuous performance management is a more modern approach to employee performance measurement, evaluation, and improvement. It’s a human-centered way of incorporating performance discussions into daily life at your organization, opening up lines of communication and trust between employees and managers, and creating high-performing teams where top talent can thrive. 

While continuous performance management is a big departure from traditional methods, it doesn’t mean you have to throw the annual performance review out the window completely. It can still serve a vital purpose for calibration and promotions. 

Continuous performance management means the annual review holds much less baggage and stress for everyone involved. With more frequent performance conversations, employees will already know where they stand in their strengths and weaknesses, making these reviews less nerve-wracking. And since managers get more practice at delivering performance feedback in the moment, they won’t need the hours of prep and reflection that the traditional system requires. 

Benefits of continuous performance management 

1. Increases employee autonomy and drive

The strongest case for switching to a continuous performance management system is how much employees can drive their own performance improvement with more frequent feedback and conversations. That’s empowering—employee autonomy is strongly correlated with motivation and engagement. They feel in charge of their own development and growth, instead of like passive bystanders hoping their career goes in the direction they want. 

2. Enhances trust

A continuous performance culture also builds trust between employees and managers. Employees know their managers will immediately tell them about an issue so they can course-correct and move forward, instead of anxiously awaiting a bomb dropping at their annual review. And managers can work on removing roadblocks for employees that get in the way of their performance, and give them the feedback they need to thrive and be their best selves. 

3. Engages your top talent

Top performers particularly like getting regular and honest feedback about their performance: it’s motivating, and they like to rise to a challenge to do better. If you’re not offering feedback about their performance, that can be demotivating and encourage them to look for a more performance-focused workplace. 

4. Creates a growth mindset

Finally, all of this continuous feedback and information encourages a growth mindset in employees and in your company culture at large too. By opening up these conversations regularly, feedback and growth discussions become second nature instead of something scary and threatening. They should also be focused on how the employee can improve for the next time, instead of only looking back to the past to punish them for mistakes.  

And when you combine continuous performance management with performance enablement? That’s when the magic really happens—the kind that creates a high-performance culture. 

The business case for continuous performance management 

The old way of managing employee performance is broken. Only two out of ten employees strongly agree that their performance is managed in a way that motivates them to do outstanding work. Continuous performance management offers a better way forward by driving engagement, motivation, and business results. 

One major way it does this is by building a culture of coaching, feedback, and development. Since performance feedback is regularly given and received, employees and managers alike get accustomed to offering specific, timely feedback to their peers and teams. And cultures where feedback and coaching flow freely are exciting and engaging workplaces. 

And these ongoing conversions about performance, mission, and goals drive engagement, too. According to Gallup research, employees who have had conversations with their managers about goals and successes in the last six months are 2.8 times more likely to be engaged.

Continuous performance feedback also connects employees more regularly and deeply to the organization’s larger goals and mission. Setting ambitious, highly aligned goals is a key part of creating a high-performing culture, and continuous performance feedback keeps employees updated on their progress toward those goals and accountable for their results. 

The takeaway 

If you wouldn’t dream of making employees wait a year to find out who won the most recent round of office trivia, you definitely shouldn’t expect them to wait until their next annual review to find out how they’re doing in their role. 

Continuous performance management fills those gaps with thoughtful, timely feedback that enables employees to take charge of their performance and consistently improve and develop. And that’s well worth shaking up your existing performance system over. 

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