OpenBlend answer: what is performance management?
Performance management (or performance reviews) aim to maximise the value that an employee brings to their team and wider organisation. According to the CIPD, when done well, it’s ‘a holistic set of processes centered around two-way discussion and regular, frank, yet supportive feedback relative to established objectives.’
That’s a helpful definition, but to really understand what performance management is, we also need to look at the purpose behind it.
The purpose of performance management
The term ‘performance management’ refers to the process of developing people and teams in order to improve their performance and that of the wider organisation. Its purpose is to identify areas for development, establish goals that align with these and encourage people to grow in their roles. As part of this, performance improvement is designed to provide actionable feedback - either to recognise achievement, keep employees on track to achieving their goals, or, in some cases, support corrective action.
Because of this, performance conversations, whether they be regular check-ins or more formal performance reviews, enable managers to hold employees to account by tying performance to career progression. This isn’t a one-way street though, because modern performance tools should also hold managers to account. Are they providing employees with regular, constructive feedback and meaningful coaching conversations? These are important questions to ask, too.
There’s also another purpose - and for us, this is a BIG one. At OpenBlend, we’re passionate in our belief that performance management should provide employees with continuous support through tailored wellbeing and engagement strategies. We believe that this is the foundation to improve employee performance (and it’s a point we’ll come back to later in this blog).
Performance and the ‘bigger picture’
So we’ve established that performance management is an exercise in visibility, feedback, and coaching. What is less realised is the benefit of using this tool to motivate employees by enabling them to understand the purpose behind their work: why they’re doing it, why it matters, and, crucially, how it ties into ‘bigger picture’ organisational goals. As Dan Pink explains in his three-step motivation model, understanding this purpose is essential for intrinsic motivation and high performance - and it starts with setting relevant goals that align with the organisation’s mission and wider objectives.
Performance management: evolution and revolution
Let’s backtrack for a moment now and look at the evolution of performance development. Performance management, in one form or another, has been around for a long time but it’s currently undergoing a transformation more rapid - and revolutionary - than ever before. In fact, it can be said that it has evolved more in the past five years, than it has in the past fifty. It’s a statement supported by Gartner’s 2019 Performance Management Benchmarking Survey, which revealed a massive 81% of HR leaders are making changes to their performance management processes.
So what’s behind this shifting landscape?
Firstly, we’ve seen a gradual but marked distancing from ‘single activity’ thinking. Where many would have put performance management and the employee performance review into the same bucket just a few years ago, there’s now a widespread understanding that managing performance cannot be defined as a single activity, but rather an ongoing process designed to support and engage people for the purpose of improved performance.
The era of continuous performance management (CPM) has well and truly arrived - and that’s a monumental step forward.
Performance management is evolving in other ways, too. Today, it is as much about what the organisation can do for the employee, as it is about what the employee can do for the organisation. That’s a significant shift in thinking and it signifies a growing understanding of the relationship between wellbeing, engagement, and performance. It also talks to the fact that organisations need to invest in understanding people’s individual wants and needs if they are to enable them to perform at their best.
This is where we believe performance improvement comes into its own - and it’s why we developed the OpenBlend platform in a way that enables managers to get a complete view of the employee and the things that matter to them - both in the context of their work life and home life.
What is continuous performance management?
CPM differs from traditional performance management in that it’s an ongoing, cyclical process. It’s not, as is the case with the annual performance review, a linear process with a clearly defined start and end point. To put it simply, it’s the antithesis of the annual appraisal - and that’s why we love it.
At OpenBlend, we characterise CPM as:
✅ Collaborative and agile goal-setting within best-practice frameworks
✅ Regular performance check-ins and one-to-ones
✅ Meaningful conversations that lead to positive action
✅ Frequent two-way feedback between manager, team, and employee
✅ Ongoing coaching
✅ Real-time recognition
✅ Continual performance and career development
Drivers for effective performance management
Let’s now turn our attention to some of the other key factors for performance success. The below is by no means an exhaustive list, but it does highlight some of the fundamentals that organisations need to consider:
We’ve talked about the importance of purpose in the context of performance, but what we haven’t yet touched on is the value that lies in setting objectives collaboratively. The goal here is to actively involve the employee or team in the process of setting their own objectives - a move that in and of itself, can support improved employee engagement and performance.
On top of this, goals need to be agile. Why? Because things change - and none more so than in the current climate. A ‘set it and forget’ approach will only reduce the relevance of goals, at the same time diminishing the level of motivation the employee has for achieving them. That said, performance goals should be regularly reviewed to ensure they remain relevant - both to the employee, and within the context of the wider organisation and macro environment.
High employee utility
While it may sound obvious, another key driver is whether or not employees perceive it to be useful. Gartner research shows that, regardless of how much time and effort an employee or team spends on performance reviews, 85% would agree that it is worth that time and effort if it delivers high utility. That’s an encouraging stat, but it does emphasise the need for organisations to deliver effective performance management programmes.
Of course, manager capabilities also have a direct impact on whether performance management is effective or not. Being able to give constructive feedback and participate in meaningful performance conversations is a skill in itself, which is why organisations need to coach their employees in the art of effective performance reviews.
So what are some of the key things managers need to be mindful of when participating in a performance conversation?
✅ Being future-focused, rather than retrospective
✅ Being consistent and fair
✅ Understanding the potential for unconscious bias - and actively managing it
✅ Focusing on the solution rather than the problem
✅ Separating compensation from performance management
...that last one is a big one, because no employee is going to speak about their weaknesses if they know that admission could hurt them financially.
Performance tech that empowers
Of course, it’s all well and good knowing what good performance management looks like, but how can we actually facilitate this and bring it to life for the benefit of people and wider business performance?
This is where modern performance technology really comes into play. But not just any technology. At OpenBlend, we’ve developed a coaching-led performance system that supports and encourages regular conversation and collaboration. Ours is a new breed of performance tech that empowers employees and managers by delivering deep insights into the key drivers that matter most to them - both in the context of their work and home life.
Today, our customers - and their people - are reaping the value of best-practice, tech-enabled performance management. They want to use our platform because it unlocks effortless communication, agile goal-setting, real-time recognition, and all of those wonderful metrics that support continual improvement. We’d argue that these were always essential, but in the new world of remote and hybrid working, they’re now most definitely a business ‘must-have’.
To learn more about the OpenBlend platform and how it can support performance management in your organisation, contact our team to book a demo. We’d love to hear from you.