As we step into 2024, HR leaders are facing unprecedented challenges. In addition to tough economic environments, there is mounting pressure for companies to perform, struggles with retaining top talent, and dilemmas juggling admin with strategy.
The challenges of this environment are being joined by rapidly changing employee expectations, with each generation holding its own set of values and workplace requirements. Recent industry-wide research has revealed that 54% of employees will consider leaving an organisation if they lack frequent managerial feedback – and this leaps to just under three quarters (73%) among Gen Z.
In such an evolving HR landscape, ensuring top-tier performance, engagement and development for your workforce has never been more crucial. But the road to achieving an effective performance management process can be full of obstacles.
So, what are the top performance management challenges we come across? And how can HR teams conquer them?
The challenge: infrequent check-ins
Delivering consistent performance management requires nurturing both employee engagement and overall organisational productivity. Regular one-to-one check-ins, even informally, are an effective way of building this.
But 76% of employees have performance check-ins only once a month or less, and only 15% are lucky enough to have weekly one-to-ones with their line manager. That’s a crazy number. What’s even worse is that a fifth reported having no performance management processes whatsoever in their organisations.
So, not only are there many employees receiving a lack of regular check-ins, but there are also some who don’t have any check-ins at all.
Conquering it: a regular check-in culture
It’s all about fostering a culture of regular one-to-one check-ins across the organisation. Provided they are well-structured, these check-ins keep teams on track, encourage engagement and provide dedicated space for meaningful conversations. Every employee should feel confident to seek support, get feedback and receive direction.
A performance management system can allow this to happen at scale and help managers implement regular and structured check-ins across the company. The system simplifies the process with built-in scheduling, automating the building of check-ins, saving time, and ensuring every team member receives the attention they deserve.
(Un)fair game with performance assessments
The challenge: biased data
Inaccurate, incomplete or outdated data doesn’t just impact HR teams but directly affects employees and their overall trust in the system; it can skew the picture of employee performance and therefore lead to unfair and biased assessments. And research shows there is a pivotal relationship between employee trust and workplace performance, particularly when you have remote or hybrid teams.
When employees trust that their efforts are acknowledged and fairly evaluated across the organisation, their performance receives a significant boost. This is only achievable through ongoing, balanced and diverse data collection.
Conquering it: balanced and diverse data collection
This data collection involves seeking insights from a diverse set of sources, including self assessments, peers, managers, and even external contributors like partners, suppliers or customers – they can all feed into the review process.
This feedback matrix enriches the evaluation process and leads to a far more balanced, accurate and fairer performance assessment. It offers a panoramic view of an employee’s performance and alignment, helps to mitigate biases and provides a holistic understanding that goes way beyond just simple line management feedback.
The challenge: lack of effective, actionable feedback and appraisals
22% of HR leaders say their employees aren’t engaged in the performance management process, but over a third of HR professionals feel that managers don’t conduct employee appraisals frequently enough or to a high enough standard.
Effective performance management lies in enabling a continuous feedback loop that isn’t just generated, but also acted upon. This underscores the need for a feedback and appraisal system that’s easy to use for managers and helps them improve and give better structured conversations.
Conquering it: a continuous feedback and appraisal cycle
Continuous feedback is not just about the annual review, but the consistent flow of valuable insights that foster growth and development across the employee base. Implementing structured feedback with a timeline significantly reduces the time needed to prepare for a formal performance review.
This can help employees feel supported, reduce anxiety surrounding the review process, and facilitate regular growth. Moreover, recognising and rewarding individual achievements can enhance feedback. It’s a shift from merely sending feedback to analysing, optimising it and making it far more colourful.
It’s vital to link all this feedback to your organisation’s core values, behaviours, and overall culture. You just can’t get optimal performance without an aligned culture. This increases employee engagement, showcasing how their performance ties into the organisational brand and its mission.
Personalising development plans
The challenge: lack of personal development
One of the biggest reasons organisations lose employees is a lack of development, and specifically, a visible personal development plan – something one quarter of employees lack access to or are even aware of.
In any thriving organisation, high-performing employees crave growth. And every employee’s growth trajectory is unique, not only shaped by their skills and their role but also by their aspirations and their potential.
To unlock their full potential, a one-size-fits-all approach just doesn’t work. They need tailored development plans that enhance existing skills based on their aspirations and empower them to take charge of their development journeys.
Conquering it: hands-on career progression
By involving employees in the review process and collaboratively setting development objectives, managers can boost their motivation and confidence to drive their personal growth.
And this is continuous. Employees should have direct visibility of goals and how they’re progressing towards them. What do they need to do to move to the next level? What are their skills gaps in their current or future role? This keeps employee development at the centre of employee thinking and at the top of organisational priorities.
These development objectives can take various forms, from picking up new skills and broadening horizons on projects to accessing learning resources like courses, podcasts, articles. And it’s not just about setting these goals – data helps companies understand where the skills gaps are and how to strategically tackle them.
Gaining true workforce insight
The challenge: insufficient insight
Many organisations grapple with accessing real-time data to construct meaningful feedback – 60% of HR teams, to put a number on it.
Real-time insight is a vital part of organisational strategy which underscores all of the previous challenges. It is about understanding your workforce. Getting a handle on this directly affects the success of performance management and overall organisational productivity.
Conquering it: real-time employee data
Traditional gut feelings and old school methods just don’t cut it anymore. Teams need real-time accurate data that gives a full picture of employee engagement, their wants and needs. This continuous sentiment data allows leaders to make better and informed choices and drive strategy.
The real magic happens when teams can bring all this performance management data into a single unified tool. It’s like having all of the pieces of the puzzle in one place, stepping back and then being able to see a 10,000 foot view from getting data insights to taking action. You see the connections that are lacking when you’re using different tools or systems.
As real-time data is collected over time, this leads to faster, more efficient performance review cycles. It provides an up-to-date representation of how everybody in the company is performing, enabling actionable feedback.
A new year to conquer performance management
On paper, 2024 is another post-pandemic year with a host of new challenges. But as HR strives to meet employee expectations, dedicated performance management tools, strategies and real-time insight can significantly boost employee engagement.
In conquering these top five performance management challenges, organisations can form a workplace where employees feel heard, valued, and active within their own growth journey.