The three C’s of effective performance management

Performance management is one of the most critical pillars for attracting, retaining and cultivating talent. Despite its role, only 8% of global organisations report that their performance management strategy drives high levels of value, both for managers and employees. 

To overcome these gaps, organisations and leaders must understand their people's data to create a better, more continuous performance management process that aligns with company goals and objectives. Business leaders can achieve this goal by leveraging the three C’s of performance management — continuous, contextual and cultural — which help companies understand their employees more holistically.

Continuous

Increasingly, companies are moving away from biannual and yearly performance evaluations and are instead embracing continuous performance management. More than 90% of managers report being unhappy with traditional performance reviews. They want to move toward instant feedback, real-time visibility, and more time spent on strategic execution. 

Continuous performance management looks different from one company to another. The process often alternates between one-on-one check-ins and intervals in which employees track progress against quarterly goals. Employees can then use real-time feedback from these check-ins as a guide to measuring progress weekly. This transparent framework leads to greater employee engagement and helps workers identify and work toward broader career goals. 

With this approach, managers also gain greater insight into how their employees work, offering more opportunities to recognise and reward hard work. As a result, continuous performance management transforms how managers evaluate their direct reports and how companies navigate an increasingly competitive business landscape. 

Further, data from ongoing performance management can help managers drive change. For example, centralised data, such as employee survey results and quarterly goals, makes it easier for employees, managers and dotted line leaders to access this information. In turn, managers are empowered to make more informed and strategic People decisions. 

Contextual 

Better insight into employee metrics leads to faster data-driven decision-making, which impacts both employee and company growth. An investment in people analytics software can help uncover data that’s challenging, at best, to find in spreadsheets. 

It isn't easy to visualise aggregated data if it doesn’t live in the same place. In a people analytics platform, everyone from executives to individual contributors can review data they have access to, such as an employee Net Promoter Score (eNPS), company KPIs, or equity grants. This strategy helps leaders get a true pulse on employee sentiment and organisational health while empowering employees with transparency into company data. 

Further, context helps companies not only visualise a complete picture of employee performance but also identifies any biases in performance reviews. For example, recency bias — the tendency to emphasize recent experiences — might happen if a manager only evaluates an employee through the lens of a recent adverse event, like an account loss, instead of taking into account the entire performance management cycle.

Cultural 

Continuous and contextual performance management significantly impacts company culture. Business leaders understand that people are their most valuable assets. Therefore, companies should incorporate employee experiences designed to foster success and growth. One way to cultivate a positive, supportive culture includes clearly communicating to employees:

• What is expected of them.
• How they can improve.
• How their performance is measured. 

When business leaders implement a continuous performance management structure, managers must provide a clear, quantifiable roadmap, which supports the overall company culture. Managers should make it as objective as possible to decrease bias and include measurable OKRs to track over time. Investing in the growth of a team is a direct investment in the future success of your company. 

Continuous performance management also creates more opportunities to reward and recognise hard work. 65% of employees report they haven't received any form of recognition for their contributions within the last year. However, employee recognition is critical as it boosts morale and reinforces quality performance, contributing to an organisation's culture.

Leveraging the three C’s of performance management enables companies to overcome performance management gaps within their organisation. Adopting a continuous program is a fundamentally different approach to driving employee growth, leading to greater employee engagement, more efficient employee evaluations, and better performance data. Further, leveraging people analytics helps managers, leaders, and employees uncover context within their performance data to foster a more transparent workplace where employees feel valued and can thrive.

This article was first published in July 2022.