Continuous Performance Management in 2022: What, Why and How

The days of yearly review are gone. Now leverage continuous performance management to drive engagement, retention, and culture, on a regular basis.

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min read

Wouldn’t you agree that the unleashing of the pandemic coupled with the dynamism and uncertainty is pushing businesses to rethink all aspects of their scalability, including performance management?

Invariably, there is a sentiment to move away from the traditional methods focused on annual interventions to invest into something more continuous and regular. 

In this article, we will explore the rise of continuous performance management, what it means, its merits, and how you can leverage its unique capabilities. 

What is continuous performance management?

Continuous performance management entails focusing on different performance management processes at regular intervals throughout the year, on an ongoing basis. The central focus here is to highlight the importance of a holistic performance management approach, marked by regular check-ins and frequent feedback to facilitate better business results. 

Contrary to the traditional performance management approach, which solely focuses on annual interventions and check-ins, continuous performance management advocates the need to connect more frequently to foster a sense of belongingness, engagement, and an enriching experience. 

Why are organizations shifting from annual to  continuous PM?

You need to adopt continuous performance management to keep pace with the new employee expectations, changing nature of the businesses, and customer experiences to enable organizations to not only survive but thrive. Organizations today no longer operate in a stable environment. Invariably, goals, timelines, expectations, cannot be set a year in advance and be left to annual interventions as advocated by traditional performance management systems. 

The market dynamics, cut-throat competition, and agile business conditions are pushing organizations to constantly reinvent and innovate to ensure business continuity. Therefore, performance management, monitoring, evaluation and realignment, once a year can no longer suffice the changing requirements.

Moreover, continuous performance management, by the virtue of facilitating regular connections, has the potential to foster greater communication and collaboration, which can enable businesses to thrive in a connected world. On the other hand, the traditional annual appraisal approach promotes silos in working, preventing engagement and creation of shared value. 

Elements of continuous performance management

elements of continuous performance management

With a firm understanding of the what and the why, let’s understand the key elements that make continuous performance management stand apart. The following four elements ensure that businesses are not stuck with rigid goals and metrics and give them the room to innovate and create value:

1. Dynamic goal setting

In a continuous performance management system, focus on dynamic goal setting with more importance towards near and short term goals. The objective here is to ensure flexibility and continuously reinvent the goals based on business needs and market circumstances. Dynamic goal setting ensures that the goals are regularly validated and updated to create maximum organizational impact.

2. Frequent feedback

The next element for continuous performance management is frequent and two-way feedback. There are two facets at play here. 

  • First, feedback and performance corrective measures should be shared regularly and in real time to ensure implementation and performance improvement. 
  • Second, the feedback should flow in both directions. 

While the traditional approach focuses on a top to bottom feedback, the continuous performance management advocates a bottom up feedback mechanism as well. Thus, the objective is to have a holistic and regular approach to feedback.

3. Regular check-ins

While frequent feedback is a more formal intervention, regular check-ins are an integral part of continuous performance management. Regular check-ins seek to address challenges and realign expectations during the course of a task or a project. 

Instead of waiting till the end, as advocated by annual performance management, the continuous approach believes that regular check-ins between employees and their managers, amongst co-workers and across the organization lead to better collaboration, greater alignment and collective responsibility.  

4. Self evaluation   

Continuous performance management requires organizations to introduce the element of self evaluation. Under the traditional approach, the leadership and managers are solely responsible for evaluating the performance of employees. 

However, the continuous performance management approach encourages employees to evaluate their performance on a regular basis. The objective is to identify for oneself the challenges as well as the opportunities to contribute to one’s own professional development, and, thereby, further organizational growth.   

5. Constant recognition 

The final element of the continuous performance approach for our discussion today is constant recognition and appreciation. Continuous performance management provides the opportunity to regularly monitor employee productivity and value creation, and, consequently, reward the top performers. 

The idea is to appreciate efforts and good performance in real time — even for smaller wins —  rather than wait till the end of the year. This has the potential to act as an incentive for the recipients to feel acknowledged and valued for their contribution as well as for others to improve and get rewarded the next time. 

Top seven benefits of continuous performance management 

There are several benefits that organizations that have adopted continuous performance management claim to have reaped. Here are the top seven which make the most sense for organizations as well as individuals:

1. Greater engagement

Regular check-ins, frequent feedback, and interventions lead to greater avenues for employees and managers to connect and collaborate. Employees are often more happy and satisfied as opposed to traditional performance management. 

According to research, 95% of managers report they are “unhappy” with traditional performance reviews. Therefore, a continuous approach leads to a greater sense of engagement and belongingness. Employees feel a part of a larger vision when they are frequently reminded of the big picture and their contribution to the same. 

2. Better financial results

Continuous performance management seeks to ensure that performance challenges are addressed in real time to augment productivity and impact the bottom line. Statistically speaking, companies adopting continuous performance feedback significantly outperformed competition at a 24% higher rate

Therefore, continuously evaluating performance and focusing on development can lead to better financial results for the organization.

3. Increased retention

When they are constantly engaged, appreciated and included, employees’ commitment and dedication towards the organization increases. Invariably, this reduces the voluntary turnover rate and promotes greater retention. 

Furthermore, when employees stay longer it creates a positive employer branding facilitating attraction of top talent, as well as building a strong succession pipeline.  

4. Greater organizational connectedness

Frequent check-ins and interventions not only augment engagement but also facilitate greater connectedness. Connecting and collaborating to review performance and improve it ensures that employees know more about one another, are able to build authentic relationships, and the workplace dons a more human and impactful cultural fabric. 

5. Real time improvement

Under the traditional performance management system, employees and managers wait till the end of the year to voice their concerns about what’s not working well, which invariably is quite late, especially in the fast paced world today. The team members of managers who provide weekly feedback instead of annual are 5.2 times more likely to strongly agree that they receive meaningful feedback. Continuous performance management enables real time feedback and improvement to ensure that only the most effective and efficient practices and processes are followed. 

6. Promote a high performance culture

Continuous performance management pushes employees to work hard and give in their best all year long and not just on the days closer to the annual review. Globoforce research shows that 51% of employees believe that annual reviews are inaccurate, and 53% say it does not motivate them. Whereas, a continuous approach promotes a sense of responsibility to perform well everyday and each day counts. Invariably, this leads to a culture where high levels of performance becomes a norm. 

7. Greater agility and resilience

Finally, organizations which adopt continuous performance management are agile and resilient. They are capable of reinventing their goals, processes and practices, and adapt to any changing circumstances. This agility and resilience is critical for business continuity and maintaining a competitive edge.

Why do some organizations resist continuous PM?

Despite the remarkable benefits and advantages, organizations are apprehensive and reluctant about adopting a continuous performance management approach. There are three major reasons behind such reluctance, including:

1. Lack of managerial buy-in

Continuous performance management requires greater efforts and interventions on the part of the managers and leaders. They often see it as an additional burden and shirk away from this responsibility as they are unable to see the immediate merits for themselves as well as for the organization. 

It is important to create the right case and explain to them how in the long run, continuous performance management can create a seamless high performance journey.

2. Waste of time

It is true that frequent interventions and continuous management requires a greater time commitment than annual reviews. This is, thus, seen as a roadblock where organizations feel it is a waste of time.

However, it is important to undertake a cost benefit analysis to understand how continuous performance management holds the key to various tangible and intangible benefits mentioned above, which would require additional resources and commitment if a continuous approach is not adopted. Using a continuous performance management tool saves 100+ manager hours by automating the entire process.

3. Lack of right metrics and tools to measure

Finally, many organizations do not have the right tools or are unaware about the right metrics to make sense of the value created by continuous performance. In such a situation, this transformational approach is dismissed as ineffective and not an organizational priority. Here, organizations must partner with the right platforms that can help gauge the results of continuous performance management and translate it into organizational impact. 

How to implement a continuous performance management system?

An understanding of the key elements, benefits and apprehensions of a continuous performance management system leads us straight to comprehending how to facilitate organization-wide implementation for the same. These following six steps can enable organizations to start implementing and reaping benefits of the continuous performance management system:

1. Facilitate employee and leadership buy-in

It is important to start with seeking a buy-in from the leadership as well as the employees. Continuous performance management requires some investment in tools and resources to facilitate regular check-ins and frequent interactions. It also requires a mindset shift and greater effort on the part of managers and employees to connect more frequently and align performance and goals often.

Therefore, the first focus must be on getting everybody in the organization onboard with the idea by illustrating the top benefits both for the organizations (like greater productivity and business continuity) and for the employees and managers (like greater growth and development).

2. Invest in manager training

Manager and executive buy-in must be followed by considerable investment and focus on manager training. This involves investing in training to facilitate behavioural change amongst managers to facilitate competencies for coaching and transforming the way they communicate. 

Continuous performance management requires a greater degree of communication and collaboration between managers and employees, and, therefore, investment in building leadership, mentorship and coaching skills is instrumental. 

3. Set dynamic goals and OKRs

Once everyone is onboard with the right skills and competencies, the natural next step is to set goals and OKRs which are dynamic, agile and flexible. A focus on SMART goals can facilitate continuous performance management. Second, the goals must be agile and flexible. This suggests a move away from the traditional rigid goals which leave no room for transformation. 

The goals should be aspirational, but at the same time must be dynamic enough to change to keep pace with the changing business conditions. Conditions like the pandemic of 2020 cannot be anticipated a year in advance, and business goals must be flexible enough to be reinvented based on the circumstances in hand. 

3. Foster a culture of 1:1 conversations 

Based on the goals and OKRs, the next step for effective implementation of a continuous performance management system is to foster a culture of 1:1 conversations between employees and their managers. These regular conversations must have a structure and cadence to ensure they are not missed out. 

Such conversations can help eliminate roadblocks by discussing challenges and potential solutions. Connecting regularly also helps to build authentic relationships and breed trust. Finally, this can lead to a greater sense of belongingness, improve engagement, and ultimately boost performance. 

4. Collaborate with effective platforms 

Next, organizations must leverage different platforms that help facilitate effective continuous performance management. For instance, SuperBeings enables organizations to measure employee pulse as well as capture the level of performance with daily pulse surveys. Based on the responses, managers can align their outlook and benefit from industry best practices to create a high performance culture. 

The objective is to collaborate with tools which can facilitate the process of capturing and analyzing employee data on a regular basis and translate into meaningful insights to manage and improve performance. 

5. Measure and optimize

Finally, it is important to measure the effectiveness of the continuous performance management system and understand its impact on organizational productivity and bottom line. While some aspects of the process will work well, others will require some work and optimization to achieve the desired goals. 

It is also important to gauge the level of adoption and reasons behind low adoption to address the same. Choosing a platform that integrates in the flow of work requiring zero context switching for employees and managers, thus increasing adoption.

Continuous performance management: 5 best practices

Most fast growing organizations agree that steps for implementation coupled with a few best practices form the secret recipe for successful continuous performance management. Let’s look at the top five practices to ensure maximum impact.

1. Two way goal setting

The goals must be created collectively. This entails involving employees in the goal and OKR setting process to ensure a sense of commitment and ownership. When employees take part in setting the goals they tend to be more accountable. Furthermore, they have a better understanding of their role in achieving them and what is expected out of them.

2. 360 degree feedback

Continuous performance management requires a focus on feedback from different stakeholders. This involves managers, subordinates, co-workers, professionals from other departments as well as self evaluation. The idea is to get a holistic picture of the employee’s performance, not just on technical skills and productivity, but on different ways they are able to create value for the organization. 

3. Transition in frequency

The transition from the traditional annual performance management must be gradual and incremental. Transforming annual reviews to daily reviews in one day will topple the status quo and lead to an overwhelming situation across the organization. Therefore, annual management should be transitioned to quarterly review and interventions and with time, frequency should be increased to make it a continuous effort. 

4. Leverage technology

A focus should be on integrating the available technology tools with existing processes to facilitate greater effectiveness and reduce the cost and time to start from scratch. For instance, leveraging platforms like SuperBeings that integrate with Slack or MS Teams can be instrumental in promoting better and regular communication and collaboration between teams. It also helps gauging team pulse and capturing the level of performance regularly to identify areas and ways to improve. 

5. Shift focus from performance evaluation to development

Finally, continuous performance management requires organizations to shift away from the traditional notion of evaluation, which focuses on measuring productivity and organizational impact. Rather, the focus should be on employee development to facilitate the growth and development of the most important organizational asset and resource, the employees. The idea is to align organizational and employee goals and promote a more collaborative approach which entails impact for businesses as well as those who participate to foster its success. 

Final thoughts

As we draw this discussion to a close, it is evident that continuous performance management is integral for organizations to thrive in the new normal. On one hand, it helps meet the need of the new millennial workforce for most fast growing organizations which expect and demand frequent feedback. On the other hand, it enables businesses to stay agile and resilient to reinvent and innovate and stay relevant with the changing market dynamics. 

If you are starting your journey towards continuous performance management platforms like SuperBeings can facilitate a smooth ride. With capabilities to continuously gauge employee pulse and translate it into meaningful insights for better performance and manager development, To build a high performance culture book a demo below.

Suggested reading:

The Ultimate Guide to Performance Management

11 performance management problems in fast-growing companies

Like what you read? Now see it in action in your team, book a free demo with our experts today!

Sudeshna Roy

Marketing, SuperBeings

Hi There! I am Sudeshna. At SuperBeings, I lead our content strategy to bring you the best and latest on everything related to people management

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Performance
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12 most common performance review biases and how to avoid them

Biases are common to all humans. If you look back at your day, you’ll realize that most of the decisions you made were based on some belief, prejudice or bias. While being biased is inherently human, its manifestation in some situations can lead to results which are far from ideal. And, that’s a topic we are discussing with this article, Performance Review Biases. 

Essentially, performance review biases and preconceptions, notions or beliefs that you may hold, which may consciously or unconsciously impact your judgment when you are evaluating the performance of your team members. Performance review biases, even if unconscious, can lead to serious implications for your team member whose performance is being evaluated. For instance, if you have a certain bias against someone, you might give them a poor rating, unconsciously, which might impact their promotion, increment and career trajectory. Thus, as a leader, it is very important for you to check if you have any performance review biases and introduce preventive strategies, wherever needed. 

Top 12 performance review biases to look out for

Let’s quickly look at the top 12 most common performance review biases that are observed in growing organizations, how they look like and how you can prevent them for your company. 

1. Halo effect

Definition: 

The Halo effect, like the term suggests, is when you put a halo over a person which is reflected in every perception you have about them. From a performance review bias perspective, it translates to a situation, where if a person has performed well in one aspect, you will have a bias that all other aspects of their performance are equally good which may not be the case. This suggests that their one good trait tends to overshadow all others. 

Example:

If an employee has shown attention to detail to a particular project, which resulted in positive outcomes for the organization, a manager may consider attention to detail as their primary trait and all other parameters of performance review will be negated. Chances are that even if the person is not punctual, misses deadlines, etc., the manager will still give them a higher rating, because their one trait that impressed the manager will overshadow the other performance incompetencies. 

How to prevent it:

To prevent the Halo effect, it is important for managers to evaluate the performance of their team members on multiple parameters and score them on each individually. In addition to the positive trait, you must objectively evaluate other factors which ultimately contribute to organizational success and assess the employee on a holistic level. This will ensure that one quality does not overshadow others, which equally determine the level of performance. 

2. Horns effect

Definition:

A counterpart of the Halo effect is the Horns effect. Here, one negative trait or performance parameter tends to bring down the overall performance review for an employee. If you have had a poor experience with an employee on a particular aspect, you may believe that they are overall a poor performer, which may reflect in your rating, despite them performing well on other aspects. 

Example:

If an employee missed a particular deadline due to some personal reason, a manager might build a perception that they are not serious about their work. The delay in delivery of work then becomes the only important trait and other positives are ignored or overlooked.

How to prevent it:

Like the Halo effect, the best way to prevent the Horns effect is by taking into account multiple performance parameters and to get a clear understanding of the reason behind rating for each individual parameter. This will encourage you or any manager to rationally review a performance rather than being susceptible to performance review biases. 

3. Leniency bias

Definition:

Leniency bias in performance review biases refers to a situation where you are more lenient in your rating, giving employees a higher rating than what their performance truly would yield. Leniency bias generally leads to overestimating the performance of some, resulting in the inability to differentiate average performance from top performers. Invariably, you may end up promoting some who still have room for improvement, while leaving others dissatisfied who truly deserve recognition and incentives. 

Example:

Mr X and Mr Y are at a similar level and perform the same role of running ads to drive online traffic. During the performance term, Mr X managed a traffic of 6000+ leads while Mr Y brought in only 1000+. Leniency effect kicks in when the manager rates both of them at a similar level, despite the difference in their outputs. Naturally, both of them will have similar increments and career paths, despite unequal efforts and results. This might lead to dissatisfaction, lower levels of engagement, and ultimately attrition. 

How to prevent it:

To differentiate between above average and top performance and to prevent falling prey to leniency bias, it is ideal to have a rating scale which increases the number of rating options after average. Instead of simply saying if a performer was average or above average, add options like excellent, high potential, high performer etc, after above average. 

4. Centrality bias

Definition:

Centrality bias occurs if you rate your employee’s performance just in the middle of the spectrum. This generally occurs when you find it difficult to make a decision and go with a safe option. However, like leniency bias, this is also one of the performance review biases which makes it difficult to differentiate between low and top performers. 

Example:

Centrality bias is evident if for a particular manager most employees have received the middle rating or the average review. In the case of a 7 point rating scale 4 is the most common rating received by many.

How to prevent it:

One of the easiest ways to prevent this performance review bias is to eliminate the middle option from your rating scale. For instance, if you follow a 5 point rating scale, you should move to a 4 point scale and eliminate the middle option of average. This will push your managers to give a below or above average rating, and help differentiate between different performance levels.

5. Recency bias

Definition:

Generally, performance reviews occur at the end of the year, and recency bias comes in if you take into account only the most recent performance of the employee as opposed to reviewing their performance through the year. Chances are if the performer delivered poorly in the end, their entire rating will be dependent on this performance if this bias is at play. This generally occurs because it is easiest to remember the things that happen most recently. However, they reduce the employees to a few weeks and overlook their contribution across the year.

Example:

If Ms Y brought in 3 new customers at the start of the year, resulting in 50 Lacs of business, however, she was unable to convert any clients in the last quarter. With recency bias, the manager will rate her performance below average or poorly, because of the most recent performance, despite having a worthwhile performance across the year. The manager will end up overlooking her performance in the initial months. 

How to prevent it:

Preventing recency bias requires adopting a continuous performance review framework. Here, you can focus on capturing performance feedback at regular intervals, when an employee achieves a milestone, completes a project, etc. All the feedback can then be consolidated to create an annual performance report based on which the final rating should be allocated. This will help you get sufficient data points to get a holistic performance view.

6. Primacy bias

Definition:

First impressions last. That’s the best way to define the primacy bias. It stands on the flip side of recency bias. Here, the first or the first few instances of one’s performance tend to influence the final performance review. Whether the performance has been good or bad in the beginning is what defines the final appraisal call. 

Example:

When Mr O joined work, he was a little under confident in a new territory and could only close 1 deal in the first two months. However, as he learnt more about the product, his performance improved and by the end of the year, he closed 5 deals in just 2 weeks. However, in the event of primacy bias, his performance review will evaluate his performance as poor because he was unable to make a lasting first impression. 

How to prevent it:

Preventing primacy bias follows the same principles as recency effect. The idea is to make performance feedback a regular practice where it is taken at pre decided intervals and sometimes after completing some important milestones. This will help managers to get a snapshot of performance over the year with clear points to avoid being fixated on one or two incidents from the very beginning. 

7. Similar-to-me bias

Definition:

As the name suggests, this is one of those performance review biases in which you may unconsciously give a higher rating to an employee who shares similar beliefs, skills, perceptions, etc. The rationale is quite simple, we tend to like people who are like us and often believe that the skills we possess are most desirable. However, this often leads to the creation of a homogeneous culture where diversity and inclusion don’t exist, leading to poor innovation and creativity. 

Example:

A manager Mr T has three employees reporting directly to him. Mr T is very process driven and appreciates the same quality to drive outcomes. While one of those employees, Ms S is also process driven, the others are not and all three have similar outcomes. With similar-to-me bias, Mr T is likely to give Ms S a higher rating because she works in the same way as him, despite equally good performance from the other two. 

How to prevent it:

As a performance review bias, the similar-to-me bias can be prevented by making assessments more objective and evidence backed. Encourage your managers to bifurcate performance reviews based on different parameters along with a reasoning behind each parameter. 

8. Contrast bias

Definition:

Contrast bias occurs when a manager is evaluating performance for more than one employee and the performance of one becomes the benchmark for evaluating the performance of others instead of the company standard. At times, despite performing extremely well, an employee might just get an average rating because of the goal or the standard being used, leading to low engagement and satisfaction. 

Example:

If the sales target for a team is getting 5 new clients individually over a period of 6 months and one employee gets 10 new clients and others get 7, 8 and 9. Contrast bias occurs when the manager gives an average rating to the employee who brought in 7 clients because it is lower when compared to the performance of the employee who brought in 10. Despite performing better than the company standard and goal, the performance of this employee is not considered up to the mark, because of contrast bias.

How to prevent it:

To prevent this performance review bias, it is important that managers set clear performance expectations at the beginning of the performance period and evaluation is done strictly according to those parameters. It is even a good idea to define performance evaluation based on different levels of achievement and managers must be encouraged and trained to review each performance in silos, rather than comparing one with another. 

9. Attribution bias

Definition:

You display attribution bias during a performance review when you attribute the reason behind a performance based on your beliefs and perceptions, rather than objective facts and logic. In attribution bias, we generally attribute our good performance to internal factors like hard work, dedication, etc. and poor performance to external factors like lack of support, collaboration. However, when it comes to evaluating the performance of others, we turn the tables. 

Example:

A classic example of attribution bias as one of the performance review biases is if Mr L has not been able to perform up to the mark and his manager has to evaluate his performance. With attribution bias, the manager, who might think Mr L is not hardworking, might believe that the reason for poor performance has been the casual attitude of Mr L, even if clearly, he wasn’t provided with the right tools and software needed for the job.  

How to prevent it:

To prevent attribution bias, it is important that managers clearly define the reasons they believe led to the good or bad performance and a similar exercise is undertaken by the employee as a part of self reflection. It is important to assess both internal and external factors and focus on continuous feedback from diverse sources to understand which factors have been behind the performance more than others. 

10. Gender bias

Definition:

This is one of those performance review biases which are clear by the name. It suggests that when it comes to performance reviews, women are often evaluated based on their personality and behavior, while the performance of men is evaluated on the basis of their work. This leads to a skewed understanding of the contribution made by both genders, resulting in unfair distribution of rewards and recognition. 

Example:

Suppose there are two colleagues who are being evaluated, Mr G and Ms K and both of them have had similar achievements, milestones and areas of improvement. A performance review which says Mr G has great coding skills and is able to write perfect codes in a short time, while Ms K has a pleasant demeanor and is able to collaborate with everyone well. While both the reviews are positive, the former one for the male employee is based on functional competencies, which yields better rewards and promotions for him, leading to gender inequality at the workplace.

How to prevent it:

To prevent gender bias, it is important to make performance reviews structured and objective. You may want to steer away from open feedback and give your managers a pre populated template with a few blocks. Furthermore, encourage your managers to quantify how each performer’s contribution led to organizational impact, focusing on behavior and outcome rather than performance itself. 

11. Confirmation bias

Definition:

All of us have preconceived notions about others and their performance. Confirmation bias occurs when you pay more heed to actions and information that confirm your bias about a particular performance than others which challenge your beliefs. Put simply, you are more likely to agree with opinions and facts which align with your evaluation of an individual’s performance, while negating those that give an alternate view. This gives a partial picture of an employee. 

Example:

If a manager believes that Ms B has performed well due to her high functional skills, punctuality and attention to details, you will give her a higher rating. If the manager received feedback from external resources reinforcing the same belief, they will add that to their narrative. However, if a contrary comment comes to the picture, a manager with confirmation bias might discount or completely ignore it. 

How to prevent it:

To prevent confirmation bias, managers need to think of their perceptions as potential truths and not the ultimate truths. An initial perception should be made, which should be confirmed or negated based on proofs and behaviors that come along the way, rather than the other way round. It is important to pay attention to and accept feedback that goes against one’s belief to get a complete picture of the employee’s performance. 

12. Idiosyncratic bias

Definition:

As a manager, you may have some functional competencies which you are great at. However, there might be others where you have limited experience and expertise. One of the performance review biases in this case is the idiosyncratic bias. Here, you may end up being more lenient towards those who possess skills that you may have limited expertise with, while being more strict with those who share common skills like you. Often the reason behind is that, when someone evaluates performance based on skills that one has limited knowledge of, even small achievements make an impression, however, when it comes to evaluating skills one possesses, the standard for evaluation goes up. In either case, the performance review is not holistic. 

Example:

There is a manager Ms H who is great at sales, but has limited expertise in building proposals and attention to detail. She has two team members working with her Mr T & Ms L, where the former has sales experience and the latter has experience in creating proposals with utmost accuracy. Idiosyncratic bias creeps in when unconsciously, Ms H gives Ms L a higher rating than Mr T, because the standards set for what constitutes good performance are based on her level of expertise. 

How to prevent it:

To confront and prevent this performance review bias, managers must be encouraged to go beyond rating them based on their performance and what they believe has been the impact they have created. It is best for managers to consider whether or not their performance left an impression where the manager would want to work with the employee again. 

Prevent performance review biases with performance management tools

As humans, we are inherently biased and unconscious bias training can go a long way into helping us keep our biases in check. However, to ensure that biases don’t impact performance reviews for any employees, it is best to implement a performance management tool to reduce their incidence. A performance management tool, like SuperBeings, will help you:

Aggregate performance snapshots over time

Prevent performance review biases like primacy effect and recency effect, etc. which rely on one a year bias prone 9 box grid assessment, by replacing it with a system generated grid based on performance snapshots collected throughout the year. Not only will you get a holistic view of the performance, your managers will also get a clear understanding of which employees need help more than others.

Create performance snapshots

Equip your managers with a pre-built customizable template to answer simple questions about employee performance and potential at regular intervals to get a true snapshot of the performance and improvement from time to time. This will help managers objectively review performance at the end of the year.

Collect reviews holistically

Get inputs from diverse team members with automation to get a holistic view of an employee’s performance. This will help reduce the rater biases towards or against any employee and ensure that the reviews are genuine and authentic. 

While performance review biases are common, if you are able to prevent them, you will unlock a high performance culture which greatly recognizes and incentivizes good performance. Using a performance management tool can help you achieve the same. 

Engagement
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min read

Employee Net Promoter Score (eNPS): How to Use eNPS for Better Engagement

“Every employee can affect your company’s brand”- Tony Hseih, Former CEO, Zappos

TL:DR

Employee NPS is a key component for your organization if you wish to create a culture which engages, motivates and inspires employees and encourages them to recommend it to their friends. Here are a few quick points that you should not forget:

  • It helps organizations gauge the level of engagement and experience for employees by segmenting employees into promoters, passives and detractors (discussed later)
  • eNPS is important as it helps in employee retention as well as facilitate fast and effective hiring by ensuring a winning employer brand
  • It is best to conduct eNPS surveys on a regular basis to gauge trends over cycles and address fluctuations in real time
  • To improve your eNPS, you must focus on understanding each segment of employees and taking appropriate action
  • You must acknowledge that passives have a great potential of changing your eNPS and you should focus your efforts on bringing them up the score spectrum
  • Finally, you must use eNPS as a means to boost employee morale and track level and reasons for disengagement

Now let’s get into the nitty-gritties of employee Net Promoter Score (eNPS) and how you can use them effectively.

What is employee Net Promoter Score?

eNPS is or employee NPS is a measure of employee loyalty and how they feel about your organization. It is a scoring mechanism that employees can use to share their satisfaction/ dissatisfaction with the company culture, which in turn helps leaders to gauge the impact it will have on the organization. 

The advent of eNPS came as a result of realizing that employees have an equal impact on an organization as the customers

For instance, if any employee leaves a bad review or reports a bad experience about your organization, it might act as a deterrent for other high performing candidates from applying to your organization.

In a nutshell, eNPS is one of the top tools you can use to gauge how satisfied your employees are with your company culture and measure whether or not your employee engagement and other efforts are actually bearing fruits. 

How to calculate eNPS?

You can calculate the eNPS for your organization by subtracting the percentage of promoters from the percentage of detractors. Let’s quickly understand what this means. 

You will start by asking your employees to rate their experience on a rating scale of 0-10. You can have questions like ‘How likely are you to recommend the organization to your peers or friends, on a scale of 0-10’. We will talk more about potential questions in subsequent sections. Depending on their experience, your employees will share their rating. Based on the rating, you can segment your employees into three categories:

  • Promoters: With a rating of 9-10; they are highly loyal, motivated and inspired and show full commitment to the organization
  • Passives: With a rating of 7-8; they are generally neutral, while they are happy with the experience, their level of loyalty and commitment may not be as high as the promoters
  • Detractors: With a rating of 0-6; they are generally dissatisfied, lack loyalty, inspiration and motivation and may not recommend the organization to others
eNPS= %of promoters - %of detractors

For instance, if your organization has a total of 100 employees and 61 are promoters, 18 are detractors and 21 are passives, then your eNPS= 61%-18% = 43

The higher the eNPS, the more advocates you have. This suggests you will have an ecosystem of high percentage of employees that are loyal, inspired, motivated and committed. 

enps

Why does eNPS matter?

For growing organizations like yours there are several reasons why eNPS matters to create a sustainable workplace. Such as —

1. Get a picture of your employer branding

Research shows that the majority of candidates read six reviews before forming an opinion about a company and 70% of people look to reviews before they make career decisions

With employee NPS, you will know how likely your employees are to recommend your organization to others outside. This ensures employer branding which determines the quality of talent you will be able to attract. 

By ensuring a good Net Promoter Score from employees, you will be able to manage the reviews effectively. 

2, Identify your advocates in a simple and quick manner

Employee NPS is very easy to execute, fast and cost-effective. At the same time, it gives you a clear picture of who are the advocates for your organization vs those who are disengaged and are unlikely to make recommendations. This information has two-fold benefits:

  • You can create personalized plans to engage the different employee segments based on results
  • You can leverage the reasons your promoters or advocates list for high level of loyalty and focus on enhancing the same

3. Reduce employee turnover

It is very rare that an employee will one day decide to leave your organization out of nowhere. Often, the decision to quit starts in advance and can be attributed to several factors including disengagement and dissatisfaction. eNPS, conducted regularly, can help you anticipate potential turnover in advance, when the employee rates low on the eNPS survey. You can use this data to fine tune your engagement plan and identify and address specific challenges. 

🚀 Predict and prevent turnover with employee experience surveys by SuperBeings. Learn more 

4. Hire faster

As stated above, eNPS directly impacts the quality of the talent you attract. Similarly, it also impacts how fast you are able to close an open position. If you have a high eNPS, you will receive a higher inflow of applications because your organization will be branded as a preferred place to work. This higher number of applications will translate to faster interviews and closures. Invariably, this will prevent the loss of work hours between transitions. 

5. Gauge employee trends over time

Finally, eNPS can help you track employee loyalty and engagement over time. If individual and overall employee NPS increases, it reflects that your interventions are moving the needle. However, if the score drops, you may need to relook at your practices and understand the root cause. 

Employee NPS cycles

As mentioned before, employee NPS is generally measured with eNPS surveys. Therefore, like any other feedback cycle, your eNPS surveys should also follow a structured and cyclical approach. Here are to create an effective eNPS survey process —

1. Ensure anonymity

Make your eNPS ratings confidential and anonymous. Do not force your employees to give names along with ratings or do not disclose ratings of one to another even if you know who it is from. One of the easiest ways is to use a platform that doesn’t capture respondent data, except the rating. Anonymity will help build employee trust and ensure honesty in the rating received

2. Keep it short

Refrain from adding too many questions in your eNPS rating. A maximum of 2-3 questions is more than enough. While most organizations use 1 central or core question, you can supplement it with another one to augment impact. For instance, one question can be about probability to recommend, while the other could be on motivation, inspiration.

3. Make it frequent

Having an eNPS rating at regular intervals is important. Ideally, as a growing organization, you should have a monthly cadence. However, if that seems overwhelming, you can start with a quarterly rating, and gradually increase the frequency. 

4. Use a 10 point rating scale or open ended questions

While a 2 or 5 point rating scale can also capture data, a 10 point scale and open ended questions enable employees to be more specific about their answer by giving them more options to choose from. The deeper your eNPS survey insights are, the more accurate actions you can take to improve your score.

5. Follow up

Just because responding to an eNPS question requires one click, you cannot assume that you’ll receive 100% participation. You must follow up a couple of times. Using employee survey tools to increase survey participation rate can be useful here. For example, SuperBeings sends reminders and follow up nudges at preset intervals via existing chat tools (Slack, Teams, Gchat etc) directly in the flow of work to maximize response rate. 

6. Encourage authentic answers

Finally, you must encourage your employees to be honest in their rating. Anonymity will help you achieve this. Additionally, explain to your employees that the answers will not have an impact on their appraisal and their negative rating will not land them in a backlash. 

eNPS survey questions

As a best practice, you can start your employee NPS survey with a core question and then you could follow it up with a few open ended questions. Your first question must follow a rating pattern to get your employee Net Promoter Score. Some of the questions can be:

  • How likely are you to recommend your organization as a workplace to your friends/ peers?
  • On a scale of 0-10, how inspired do you feel to work at this organization?
  • What is the primary reason for the score you gave?
  • What can the organization do better to get a higher score?
  • What is one reason that is preventing you from recommending the organization to your friends?
  • What is one reason why you enjoy working here?

Here are a few best practices you can use while preparing your follow up questions:

  • Don’t be too vague with your questions
  • Try to keep your questions open ended to get support for your core questions
  • Try to get specific answers with 1 or 2 instances

What is a good employee NPS score?

While it is difficult to pinpoint the exact score which can be considered good, there are a few ways to measure how well your performance has been on eNPS. 

If you look closely, by formula, your score can range from -100 to +100, depending on the ratio of your promoters and detractors. Generally, any positive score, that is, a score above 0 is considered to be a good starting point. This indicates that there are more promoters in your organization than detractors. This translates to the fact that more employees are likely to recommend your organization than those who will not. 

However, only a positive score is not the end of the story. While a positive score represents retention and recommendation, the higher the score, the greater will be propensity and impact.

Use eNPS benchmarks

Furthermore, you must also align your eNPS with other organizations in your industry. For instance, while 60 might be a great score, if all organizations in your industry have an eNPS of 70+, then you may need to relook at your numbers. 

Here, studying industry benchmarks can help. However, eNPS is not a data point that is publicly available that you can consume. 

At the same time, your own eNPS can also be a benchmark for you over time with an aim to increase every time. The idea is to track your own company’s fluctuation, positive or negative, to identify the reasons or interventions behind the same. 

Unlock top engagement survey question templates and advanced employee analytics. See SuperBeings in Action

How to improve employee NPS?

eNPS surveys can disillusion even the most people friendly organizations. It is not rare to have a survey score below expectations. But improving eNPS is easier than you think:

1. Capture eNPS regularly

You must have heard that what gets measured, gets improved. The same is true for eNPS. When you capture employee NPS on a regular basis, you can track fluctuations and gauge whether or not the needle is moving. You can get a real time picture of whether the promoters or the detractors are increasing. Furthermore, the fluctuations can help you identify how specific interventions or regular organizational activities impact eNPS. 

2. Share the results

No matter what the results say, share it with your team members. Even if you have a negative score, share it with the team to facilitate collaborative thinking on what is going wrong. This will help you create an image that you are truly listening to your employees and are taking action. After sharing results, follow up and communicate the next action steps so your employees know that their voices are being heard and impact is being created. 

3. Understand the rationale

To improve eNPS, you need to understand the rationale or the reason behind each rating. Here, you should ask follow up questions to your employees on what contributed to this particular rating. On one hand, it will help you understand the motivation or the inspiration for promoters as well as you will be able to identify what is stopping detractors from recommending the organization to others. 

Put simply, the factors mentioned by promoters can be augmented and focused on, while those from detractors must be addressed or resolved 

4. Take action 

Once you share the results and engage in collective brainstorming, you must take action. 

  • Example 1: If the major reason behind low eNPS is lack of work-life balance, your focus should be on addressing the same, by facilitating workplace boundaries. 
  • Example 2: If lack of career growth is stopping your employees from recommending the companies to others, investing in mentorship, learning and development, career coaching, etc. can be extremely helpful.

5. Communicate with all segments

If you think that you only need to focus on detractors to improve your eNPS, you are mistaken. While you definitely need to pay attention to them, the other two segments, i.e. promoters and passives must not be left attended. 

  • When it comes to detractors, your focus should be on their pain points, how it translates to a poor experience and what you can do to reverse the same. 
  • For promoters, while you may think they are happy, engaged and don’t require any intervention, you must not lose attention on them and focus on keeping their rating high. Furthermore, when you communicate with them, you will be able to get insights for long term strategies. 
  • For passives, focus on understanding what would make their experience within the organization and the role even better and more meaningful.

6. Improve continuously

When it comes to improving your eNPS, there is no stopping point. Just because you improve your eNPS by 20 points, doesn’t mean you have reached the pinnacle, even if you are above the industry average. 

  • While in the first few years of your employees’ lifecycle, you will focus on retention and loyalty by ensuring a positive score,
  • In the later years, your focus should be on making the employees feel inspired, motivated and committed to unleashing high levels of innovation and productivity. 

7. Follow up with more comprehensive feedback

Employee Net Promoter Score must be a part of a more comprehensive employee feedback framework. The idea is to get more qualitative feedback and insights to compliment the score. You can use open-ended survey comments for this purpose. Such feedback will help you understand where the score came from and how you can take steps to move in the right direction. 

8. Understand the passives

Finally, to improve your eNPS, you need to focus on the passives. Based on the formula, you might think that passives have no role to play in eNPS. However, you must understand that they are just one point away from falling in the detractor or the promoter category. Here, your focus should be on moving them up the spectrum. Getting qualitative inputs from them is very important as they have some level of commitment and positive regard towards the organization already. 

How to use employee NPS for better engagement

With eNPS, you can turn employee feedback into a growth strategy both as a business and as an employer. Here’s how:

1. Boosts morale

First, employee NPS boosts the morale of employees who believe that their voice has value and is being heard. It makes employees feel included in the process of building the right culture. Employees who participate in eNPS come with a sense of pride as being a contributor to building the overall experience in the organization. It also comes with a sense of respect when an organization asks the employees for their perception.

2. Understand level of disengagement

Low or negative eNPS is a clear indicator of the level of disengagement. It shares an inverse relationship.

Lower the eNPS, higher will be the disengagement

Obviously, only when employees feel disengaged at work, will they not recommend it to others in their network. This can act as initial information for your organization to create strategic plans to reverse the trend. Furthermore, fluctuations in eNPS can be useful when it comes to sudden disengagement which may not be very apparent, but can lead to mass turnover. 

3. Gauge factors contributing to engagement

A deep dive into the qualitative aspects of eNPS can help you understand the factors contributing to engagement or disengagement. For instance, if a promoter claims that they gave a high score because of the focus on wellness, it becomes clear that wellness programs can augment engagement. Similarly, if the reason for a detractor is high workload, effective distribution can help improve engagement levels. 

Increase employee NPS with SuperBeings

Creating, communicating and analyzing employee surveys can be intimidating and time taking. To conduct eNPS in a comprehensive and hassle free manner, you can partner with SuperBeings. Here’s what you get with our employee engagement survey feature —

  • Built-in survey templates: Reduce the time to create survey questionnaires by using science backed, best practices pre-built survey templates. You can customize them as you need.
  • Choose the most suitable rating scale: You get full flexibility to customize each question by choosing from a wide array of rating scale options — 2, 5, 7 or 10 point scale, multiple choice and open-ended.
  • Filter options for better comparison: For each question you can filter the responses at manager, department or org level and compare them on a single dashboard. Also, you get deeper insights into each question on the Insights tab
  • Use comments for qualitative feedback: Understand the sentiments behind each response by looking into open-ended comments left by participants
This is just the tip of the iceberg of what you can do with our engagement survey tool. At SuperBeings, we are constantly trying to improve the engagement processes and make it easier for the people leaders. 

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7 Steps to Effective Performance Management You Need to Know

“Most organizations fail to manage performance effectively because they fail to look into the system holistically.” - Pearl Zhu, Author of Performance Master

The impact of having an effective performance management system goes way beyond hitting quarterly targets, it also facilitates employee development, high levels of retention and a high performance culture. 

Yet sadly, most organizations do not spend nearly as much time and resources into planning and developing a wholesome performance management process as they do chasing goals.

In this article, we break down the components of an efficient performance management system and how you can achieve them in 7 easy steps.

7 tips for effective performance management

We spoke with several HR practitioners and below are the 7 steps they recommend to build a super effective performance management system.

But before that, it’s important to understand that — 

Improving performance is a collective responsibility. And it starts with shifting the mindset around performance — from appraisal to improvement, from annual to continuous. 

As HR leader and author of Nothing About Business says —

“Performance management is so tightly integrated with the business that Business has no option but to do it on its own.” 

1. Adopt a continuous approach

First, you need to start with a continuous approach to make your performance management effective. Simply relying on traditional approaches of annual check-ins, feedbacks and reviews will have limited impact considering the dynamic and volatile market ecosystem. To adopt a continuous approach for effective performance management, you should:

  • Promote regular check-ins and employee pulse surveys
  • Facilitate consistent and dynamic goal setting
  • Foster a culture of constant appreciation and recognition
  • Ensure frequent feedback, evaluation and interventions
  • Set regular cadence to reflect on diverse aspects of performance management

Read our detailed article on Continuous Performance Management to learn more.

2. Capture performance feedback regularly

Next, a major component of strategic performance management is capturing and analyzing performance feedback. You need to ensure that your employees are offered adequate and comprehensive feedback on their performance and areas of development are worked on. 

You can use our Performance Review Phrases template for such performance feedback recommendations.

At the same time, there should be focus on seeking feedback from your employees for self evaluation and to understand what they feel about their work and the organizational culture as a whole. 

Here adopting an employee feedback tool can enable you to find success easily. It can help you to not only capture feedback, but also generate insights and share heatmaps on how certain areas of performance can be improved, which is essential for finding success with your performance management initiatives. 

3. Facilitate meaningful 1:1 conversations

A good performance management goes way beyond just reviews and evaluations on how the performance of an employee has been. You need to equip all your line managers and leaders within the organization to conduct powerful and meaningful 1:1 conversations with their team members. 

The right conversations have the potential to preempt any potential risk of turnover, drop in productivity, low levels of motivation etc.

Once you have been able to identify any potential challenge, you need to ensure that the conversations take a new avatar. The idea is to have conversations that can address the surfacing risks. 

However, conducting directed conversations on different challenges can be overwhelming at times. Therefore, you may want to leverage a guided 1:1/ Meetings tool to train and equip your managers.

4. Identify learning opportunities

Based on the feedback, conversations, reviews, surveys that you conduct, you will have a clear picture of what factors are promoting high performance and which ones are deterrents. The latter ones form the areas of development and learning opportunities. You need to identify these areas of intervention and provide your employees with adequate resources and support to hone the skills and competencies that are needed for effective performance. 

Pulse surveys can be an effective way to gauge employee sentiment on a regular basis. 

Frequent pulse surveys are excellent for understanding how employees feel about their current capabilities vis-a-vis their role and the external support they need.

Ideally, you can also look at industry benchmarks to understand the types of learning opportunities available for different roles and provide them to your employees. 

Thus, to make the most of your performance management, you need to identify and acknowledge the strengths and weaknesses of your organization as a collective measure of your employees and work towards them.

5. Promote coaching and mentoring

While effective performance management requires learning and development interventions, it is equally important to focus on guidance via mentoring and coaching. Your employees need the right mentorship to help them navigate through professional challenges that may not require upskilling but a change in mindset. Here setting up a formal mentorship program can contribute to effective performance management. 

Read: How to use employee coaching to unlock performance

You can also enable your managers to provide the right mentorship and coaching support. You can count on SuperBeings to help you ensure the same. 

  • On one hand, it offers opportunities for manager development with a focus on key leadership competencies that can enable your managers to become better leaders.
  • Additionally, the guided 1:1 conversations act as a mass coaching initiative where gradually your managers will master the art of coaching and mentoring. 

6. Navigate collaborations

Undoubtedly, a key step for effective performance management is to navigate collaborations for different aspects of the employee lifecycle. You need to adopt the right tool to capture employee pulse, feedback, review, facilitate continuous performance improvement and much more. Fortunately, today you can find all these features in a unified solution to relieve yourself from the costs of different tools and the added administrative hassles. 

7. Ensure recognition and reward performance 

The last and the final step for effective performance management is to ensure that you recognize and reward a job well done. This will catalyze a high performance culture by positively reinforcing those who performed well and encouraging others to improve their performance in a bid to achieve rewards and incentives. A few things to keep in mind:

  • Recognize efforts and results
  • Track performance continuously to reward consistency
  • Ensure that recognition translates to rewards, even if it is just an extra day off
  • Encourage career planning and mapping to illustrate recognition

Importance of effective performance management 

Before we finish, let’s quickly discuss the tangible benefits you will get if you have a solid performance management system. This will help you build a stronger case for performance management and secure leadership buy-in.

1. Employee development

Efficient performance management can help you in facilitating the right development opportunities for your employees. Based on a combination of expectations, feedback and conversations, you can enable your team members to grow in their professional journey. This will also facilitate higher retention

94% of employees say they would stay at a company longer if it invested in their learning and development. 

2. Organizational success

Effective performance management has the potential to create an equal impact on organizational success. When the performance of the teams and individuals increases, it will invariably positively impact the organization as a whole. As employee performance becomes better, productivity, quality of work and other related parameters also improve and impact the bottom line. Furthermore, it leads to creation of a high performance culture. Research shows, that good company culture could help you increase revenue by more than four times

3. Strategic allocation

If your organization is growing fast, you may have financial and budget constraints to spend towards employee development and training. 

47% of HR leaders are not aware of employee skill gaps, and 60% of HR leaders say that building new skills and competencies will be their top performance management priority.

An efficient performance management process can help ensure that you are able to allocate your resources to interventions that actually make an impact and eventually monitor, track and measure the return on investment

4. Clarity of expectations

Performance management goes beyond feedback and performance evaluation. In fact, it actually starts with creating a clarity of expectations. 

Most fast growing organizations are chasing multiple priorities and this leads to a confusion among employees on what is expected out of them. In fact, only 50% of employees would “strongly agree” they know what’s expected of them at work. A practical performance management process can help you and your managers create a clear path for employees with a focus on OKRs to ensure everyone is on the same page

5. Better engagement

Finally, performance management sets the stage for greater levels of engagement and a better employee experience. When employees feel valued and believe that you are taking genuine interest in helping them grow, the motivation, morale and commitment is bound to rise. As a result, they will be more engaged at work which will eventually show in their performance, productivity and quality of work. The impact on the bottom line is also phenomenal. 

Companies with a highly engaged workforce are 21% more profitable

Get started with effective performance management

Use the following resources to get started on everything you have learned so far —

And finally, to see how SuperBeings can help, talk to one of our experts today.

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