What is Continuous Performance Management (CPM)?

Many companies today use a mixed bag of processes and tools to manage their employees. From annual performance appraisals to quarterly or even monthly check-ins, the ways managers evaluate and communicate with their teams vary widely. Some companies, like Zappos, switched to ongoing real time feedback to reinforce performance consistency in the workplace . 

While that can be considered as a standard way of evaluating performance, there is a method that not only boosts steady performance but also builds trust. It’s called Continuous Performance Management (CPM) and it is changing the way managers think about their jobs as well as the way organizations manage productivity.

The CPM approach takes away the pressure of waiting for formal reviews, which often allows months to pass without any communication from management to employees on how they’re doing. In a study by CEB, the average time between a manager’s review and feedback to an employee was around 120 days — far too long for many companies today. 

Also Read: How To Create A Feedback Culture In Your Workplace?

The perfect storm of social media, instant messaging and overall competitive pressures put leaders at risk if their team isn’t feeling engaged or getting quality feedback in real-time.

How Does Continuous Performance Management Work in the Workplace Setting?

CPM is a more fluid form of performance management — an approach that places the emphasis on employees, not managers. It encourages regular continuous monitoring of goals and feedback (almost daily) that helps both parties stay up to date with what’s working well and where there may be room for improvement. Here are some key components to making this work in your organization:

Using predictive analytics to understand which KPIs you should be measured at any given time eliminating those that don’t matter as much—or aren’t being properly tracked—by employees, can help minimize “data overload” and ensure information gatherers have the right material to work with. This allows for a higher success rate when giving feedback, as employees won’t feel overwhelmed with information they can’t use.

Having an agile management system in place 

It enables managers to receive relevant feedback at the right time. This means creating a “micro-ecosystem” by combining HR and operational technology (OT), which has been shown to provide much more actionable insights than either OT or HR systems alone when it comes to data-driven decisions. 

While this may sound daunting, any company that is already utilizing key performance indicators (KPIs) across their organization will find it straightforward. For instance, if you’re seeing trends in call times and customer complaints, this might be attributed to underperforming employees who aren’t hitting sales goals; thus requiring immediate follow-up from managers.

Also Read: Goal Setting Processes: KPI VS OKR

An opt-in approach rather than opt-out

The “you must participate” approach may seem like a no-brainer, but it’s surprising how many organizations still cling to the old “feedback is just something we do around here, whether you’re interested in receiving it or not” model. As more companies adopt CPM, they’re finding that by asking for employee input on their goals and performance processes, they get better insight into what’s working well. 

For example, when employees actively participate in providing feedback on what KPIs matter most, they feel more invested in hitting them, which makes for healthier teams full of engaged employees.

Rewarding high performers who give great feedback

When you encourage each member of your team to share ideas about best practices — while also rewarding individuals who offer quality insights — you’ll see a more engaged workforce that feels empowered to contribute what they know. 

For example, you could provide incentives or bonus to employees who regularly give managers valuable feedback on how they’re doing—and have them use it as a coaching tool for peers on their team. This is one of the most effective ways to show employees that bosses value good reviews just as much as high performance.

Also Read: 5 Employee Appreciation Ideas For Your Remote Team

Keeping scorecards up-to-date

More companies realize it’s not enough to measure performance over longer periods, such as yearly or quarterly reviews, but rather must do so using shorter intervals that offer instant feedback on real-time data from OT systems. Using something called “forced ranking” (or simply keeping scorecards up-to-date) is also helpful. 

It ensures that managers are tracking results at all times so they can provide immediate feedback to employees on how they’re doing — while also measuring key performance indicators, or KPIs, which tell the whole story about what goals each rep is reaching, and whether their work is proactive enough versus reactive.

Overcoming challenges

While it’s good to have managers who are open to continuous performance management practices, it may present some pitfalls for underperforming employees. Implementing a new system can be overwhelming for those who don’t see themselves improving in the current year. That said, by approaching this change as an engagement initiative, companies can guide staff through these initial growing pains.

Why Organizations Should Implement Continuous Performance Management

To meet customer demand, companies are now expected to produce results faster than ever before. In the past, it was all about hitting certain milestones for a big completion date or project launch – but in today’s competitive business world, being able to deliver in small packages quickly and effectively is what counts most.

In a survey of 3,000+ global companies, 51% cited “speed and responsiveness to market changes” as their number one challenge—nearly double that of the second-highest-ranking response at 28%. This increase in speed can result in more chances of shipment (i.e., such as new products or services), but it doesn’t come without challenges: namely, an increased need to provide instant feedback across teams throughout the company.

Continuous Performance Management is one of the most effective tools companies can use to address this issue and support speedy decision-making. By involving employees at every level of the organization, CPM helps management build a culture that prioritizes real-time feedback and collaboration–empowering everyone to make informed decisions that can benefit both internal teams and clients/customers as well.

Organizations now need more people across all roles (not just managers) to be able to provide instant feedback on everything from tactical projects to strategic initiatives. This means no longer do those closest to key business operations have time for long reviews or evaluations; they must instead quickly assess situations and offer real-time and direction–especially with regard to new developments in the ever-changing digital and social media landscapes.

Benefits of Continuous Performance Management  

The most important benefit of implementing continuous performance management is that it supports faster decision-making across the organization. By constantly receiving input from those closest to projects and operations, managers can help their teams make better-informed decisions on how to move forward with specific initiatives.

On the flip side, employees who are getting more and more feedback and direction on a regular basis (e.g., every two weeks) will be able to see whether they’re meeting goals–and adjust accordingly if need be.

As companies continue moving toward putting out new products and services quickly, long gone are the days where big unveilings were simply annual events–they must now capture early market opportunities as they arise. That’s having access to instant information about who’s using what, when, and where (especially longitudinally) can help companies grasp new opportunities quicker than competitors; plus it ensures a more accurate rollout of future updates.

Real-time decision-making is possible with continuous performance management because, like many other KPIs, instant feedback is captured in real-time — allowing managers to use the most up-to-date information available when making decisions. This enables teams to recognize any issues or delays early on in an initiative or project, so they can quickly move toward alternative options without wasting too much time.

Challenges of Continuous Performance Management 

While CPM has a long list of positive benefits, it’s not without its own set of challenges. One is that some workers may feel as though they’re being micromanaged–having every move documented and measured closely by managers, peer-to-peer , can make employees feel uneasy.

Another issue with continuous performance management is that it doesn’t apply to all workers in the same way: salary employees don’t receive feedback or input from clients/customers at regular intervals throughout the year (with whom they do their jobs), but instead only through formal reviews. For these types of workers, CPM still holds value — namely because it provides more comprehensive communication with managers on an ongoing basis, rather than just once annually.

In order for companies to reap the full benefits of continuous performance management, they must have proper training programmes in place. This means providing the right tools and communication channels to ensure that workers are receiving accurate feedback—which can be challenging when teams are across multiple offices or cities.

Also Read: The Importance Of Peer Feedback At Workplace

It’s also critical to establish regular communication schedules between managers and employees so both parties know what to expect; not only does this make it easier for employees to track their own progress against goals, but managers will also better understand how plans change/shift over time depending on external factors (e.g., new hires, promotions, reorganizations).

The Future for Continuous Performance Management in the Workplace

Continuous performance management is the natural next step as businesses move toward a more paperless, data-driven corporate culture. Having instant access to figures and information means companies can make smarter decisions about growth strategies and future moves .

However, continuous performance management isn’t going away anytime soon. As customization becomes a bigger priority in business–customization of products/services, customer service interactions, etc.–workers will need increased feedback from managers so they know the best way to achieve these goals over time.

In order for CPM to work most effectively, employees should be involved in monitoring their own progress against certain KPIs — especially those that directly impact their role — while managers provide more high-level feedback on progress toward long-term projects.

Also Read: What Is A Performance Management System?

The growing trend in workplace technology means companies are entering a new era of continuous performance management, where data is collected automatically rather than through manual reporting by workers themselves. With the right tools and processes in place, CPM can enable teams across an organization to work better together while still maintaining individual autonomy over tasks that must be completed at one’s own pace or outside the view of others.

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