Continuous Performance management cycle

Category: Performance Management.

What does continuous performance mean?

Continuous performance management is considered a more human-centric approach to performance improvement and management because it focuses on building a trusting relationship between employees and their managers. Managers are encouraged to give feedback and offer support naturally throughout the year, while employees are given the tools and guidance they need to take charge of their own development.

With that in mind, organizations that have implemented this performance management process successfully have done so in combination with structured training and learning opportunities, as well as employee recognition systems and even rewards platforms.


Having a right and continuous performance management system helps an organization to convert, monitor, provide feedback and course correct, strategize the long-term objectives and its execution.

Srinivas Chunduru, Founder and CEO, VANS

What are the benefits of continuous performance management?

Continuous performance management might seem like an unnecessary time-sink, but research shows that it offers a myriad of benefits when compared against other performance management systems.

One of the biggest advantages is the reduced employee turnover. With an estimated 14.9% reduction in avoidable employee loss, this method of performance management ensures that employees are happier and more satisfied at work.

Higher productivity is another significant benefit. Research suggests that 40% of employees who don’t receive feedback or only receive negative feedback are highly disengaged, which reduces their productivity and in turn, leads to reduced profitability.

Organizations that use continuous performance management often say it saves money against having to rehire and retrain employees lost to avoidable attrition. Rehiring a single employee is estimated to cost an average of $7,645, so implementing a performance management system that reduces employee turnover– like continuous performance management– will save money in the long run.

Managers also like that this program attracts top talent because it shows new hires that the company is willing to invest in their employees. With 95% of companies admitting to hiring the wrong people for the job each year, this is a small investment to make to attract the best candidates for the job.

Additional benefits of continuous performance management include:

  • Employees know where they stand in regards to job performance
  • Feedback is actionable because it’s given frequently
  • Improved workplace relationships between employees and managers

Introducing Continuous Performance Management to Your Organization

If your organization’s current system involves the traditional annual review process or another kind of performance review process, and you’d like to switch to continuous performance management, it’s important to understand how best to introduce this to your company.

With that in mind, some key areas need to be covered by HR, management, and other executives before you can implement continuous performance management.

Namely, you need to make sure that this performance management approach isn’t burdensome for employees and managers. The idea of continuous performance management is to enhance performance– not hinder your current system. If it is too much of a burden, there’s a risk that management won’t adapt well to the new system, and you’ll end up with more problems than you aimed to solve. This is a particular risk when you’re moving from a discreet annual review system to something more continuous, and it’s one you need to be aware of moving forward.

How do you implement continuous performance management?

If you think continuous performance management is a good system for your business, these steps will help you follow the best practices so you can implement an effective system. For an intuitive performance software that can help you implement continuous performance management in your organization, try out for free!


Continuous Performance management implementation best practices.

Step 1: Build Documentation

As an HR manager, you must build your organization’s continuous performance management toolkit with your company’s goals, objectives, and culture in mind. A robust performance management cycle starts with you. So, before you communicate these performance management changes to management, you need to build documentation that explains why these changes are important and how managers should implement them.

It’s at this stage you need to consider the following options:

  • What company-wide standards will employees be evaluated on?
  • How will you evaluate employee productivity? (Scoring, grading, long-form data, etc)
  • How and when does performance observation take place?
  • What frequency of performance review meetings works for managers and employees?
  • How do managers deliver feedback?
  • How does goal-setting work?
  • What training and development can managers schedule for employees?

Step 2: Organize Training

With your documentation in place, you need to organize training sessions with managerial staff to explain how to follow the continuous performance management process. By getting management on board early, you’ll be able to collect feedback from the people who work directly with employees, helping you to optimize this process and make it more effective for everyone involved.

Step 3: Brief Employees

Once this process has been optimized with the help of managerial staff, then you need to make sure your employees understand why their performance management system is changing and how it’ll benefit them. You can either do this with in-person briefings, allowing employees to ask you questions if they’re not sure or via a digital presentation with prompts to speak to their managers.

Step 4: Begin Observation

When the continuous performance management cycle first begins, managers will need a period in which they can observe employee performance and behavior under the new guidelines. This ensures that the new system is fair for employees, as they’ll be evaluated on new criteria, and managers, who may not have had much time during implementation to observe employee performance.

Depending on the procedures you set out in your documentation, managers have the following options for observing performance:

  • Simply making notes about witnessed behaviors
  • Self-assessment forms from employees
  • Feedback from coworkers and other employees
  • Feedback from customers and clients
  • Grading observations against company policy and procedure

Step 5: Conduct the First Formal Review

Your managers should then discuss the outcome of these observations with their employees in the first formal review under this new process. It’s to be expected that this first review with your new continuous performance management cycle will be awkward and stilted, so as an HR manager, you should expect some employees and even managers to be resistant to this new process at first.

A typical review meeting, depending on your method, often looks like this:

  • Job-specific review: Employees’ observed behavior is compared to their job description.
  • Company policies/procedures review: Employees’ observed behavior and conduct is reviewed against set policies and procedures.
  • Free discussion: Employees discuss with their managers how they feel that they have performed and why.
  • Goal-setting: Employees and managers work together to set goals and identify any training or development that’s needed.
  • Management feedback: Employees give feedback on their manager’s performance and behavior.

At the end of the meeting, the date for the next formal meeting should be set, and managers should brief employees as to how often they can expect informal catch-up meetings.

Step 6: Implement Training and Development

Managers should organize the needed training and development for their employees and implement this plan as part of their working day to help their employees reach their performance goals. Employees should also be encouraged to hold their managers accountable and remind them to set up the decided internal or external training sessions, as with this being a new process, some people may struggle to adapt.

Step 7: Hold an Informal Catch-up Meeting

A key part of continuous performance management is informal meetings between formal reviews to ensure that employees and managers are staying on track with their obligations and objectives. However, these meetings should be less structured and should be discussions only, giving employees the breathing space to tell managers if they have any concerns or need any additional support.

Step 8: Gather Feedback

Because this is a new process, you should be asking for managers and employees to send in anonymous feedback about how these new procedures are operating from their point of view. Once at least one formal and one informal meeting has been held, HR professionals should send out anonymous surveys or ask managers to provide feedback, so the process can be improved if necessary.

Step 9: Implement Changes

If your management or other employees have suggested changes to this performance management procedure, then you should assess them and implement the changes if needed. It’s important to maintain a culture of organizational learning and be willing to iterate in all areas of your company– from business strategy to HR processes.

Step 10: Repeat the Cycle

Once the first cycle has been completed, then you need to make sure that you encourage managers and other employees to continue following these procedures. Employees should have a line of contact with HR if their managers aren’t giving them the support they need, and managers should be able to go to HR for guidance if they’re struggling to implement the procedure.

Performance management tools : Continuous Performance Management with’s performance management software enables managers and HR professionals to distribute reviews as frequently or rarely as they would like. With Affinity-Based Reviews, employees are reviewed by themselves, their managers, and their peers, giving a 360-degree view of employee performance and experience. With standard reviews, or conversation and feedback reviews, employees answer customizable questions about their role and performance to help managers gain a better view of how employees understand their responsibilities in the company.’s Performance Management Module uses the 9 Box Matrix to help HR Administrators get a simple yet comprehensive perspective on the performance and potential of the employees in their company. With this dashboard, the performance rating from an employee’s review and the potential rating from their manager’s assessment is plotted in one of nine boxes that reconcile these two numbers as a category.


For example, an employee with high potential and high performance is a “Star” on the nine-box matrix. Alternatively, an employee with low potential and low performance is an “Underperformer”.

Implementing Continuous Performance Management: In Summary

Continuous performance management offers a myriad of benefits against the outdated annual review process, which is why it’s becoming more popular with companies across the globe. This method of performance management can help your company reduce turnover and improve morale, all while saving money against ineffective and outdated previous systems.

However, you need to make sure that you follow best practices to implement this popular new policy, otherwise, your performance management system will remain ineffective and is at risk of being ignored by your managerial teams. With that in mind, just as managers are expected to continually assess their employees, you should continually seek to improve your continuous performance management system. To learn more about how can help you with your continuous performance management cycle, book a demo with our experts today!

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