The Key to Effective Performance Management

Outdated Performance Management

Spoiler Alert!

The key to effective performance management is REAL TIME FEEDBACK! More about that in a minute.

The Evolution of Performance Management

Performance Management has been around, in various forms, since the beginning of the 20th century. It has mostly been viewed as the annual performance review process and has only recently evolved to include the holistic performance of the employee, not just one document, one time per year.

Performance Management is still confused, among some organizations and leaders, as only the Annual Review process, when it is so much more. Performance Management includes tools such as Performance Improvement Plans (PIPs), Performance Development Plans, Talent Development, Succession Planning, Mentoring Programs, Regular One on Ones and much more. When using the right combination for your organization, the employee begins to feel valued because they feel they are invested in. The “gotcha” feeling of only providing feedback once a year can be offset by utilizing a holistic approach to performance management.

The Problem with the Annual Performance Review

The problem with using the Annual Performance Review as the entire Performance Management process, is three-fold. First, there are many psychological errors that come with once a year feedback. These include:

  1. Central Tendency Error – This is a tendency for a manager or whoever is reviewing the employee  to place most of the reviewed items in the middle of the rating scale. It is most of the time inaccurate and biased.
  2. The Halo Effect – A  term that describes a bias which is based off of one trait of the person. This effect can work positively or negatively. A person’s perceived negative or positive trait creates a “halo” of an overall impression of that person, regardless of facts or real knowledge.
  3. The Recency Error – This one I see the most often. It is where the employee is, essentially, rated or reviewed on what the reviewer can remember. Most likely the review will be from the last 3 months or so, not the last year.

Second, when feedback is only given once a year, the employee can be left feeling confused and doubtful for the other 11 months of the year, not knowing when they are meeting expectation and when they are not. Lastly, and in conjunction with number 2, when employees only receive feedback once a year, it typically feels like a “gotcha” when they do receive feedback. Not a lot of trust is built when the Annual Performance Review is used by itself.

So, should we throw away this 100+ year old tool? Maybe! But, only if the organization insists on using it by itself. I think the Annual Performance Review can be effective if used in conjunction with the other tools listed above, but most effectively, if it is used with the provision of real time feedback.

The Key: Real Time FeedbackReal time feedback is the key to effective performance management

Okay – back to that. What does real time feedback look like? It is pretty straight forward. It is feedback in the now; when the performance or behavior is great, when it’s not meeting expectations and when it is meeting expectations. It is constantly letting people know where they are and what they can do about it. Sometimes, it is just saying “do more of that”.

That sounds overwhelming, right? Not if you schedule it in. If you are not using scheduled, cadenced, regular one-on-ones, I challenge you to try it for 3 months. This is the perfect place to schedule in feedback time. When you do this your people will feel invested in, not like you are trying to ‘get’ them. (For more specific information on one-on-ones check out this blog post).

Put it into Action

Here is a quick process for providing constructive or positive feedback (because I teach a 4-hour course on this and we don’t have time for that right now):

  1. Explain what you saw in the performance or behavior; Be specific; Have examples
  2. Ask what’s going on – Give them an opportunity to have input
  3. State the impact, on you, on their career, on the organization, on their co-workers
  4. Tell them what good looks like; Reset expectations

One on one feedback


That’s it!

Straightforward? Yes. Easy? No way. Feedback is hard, and being a leader is hard. If it were easy, everyone would do it. But, if you don’t provide the feedback, who will?



Want More Information? Let’s Talk

So, if your organization is managing performance solely by providing an annual performance review, let’s talk. There are so many great tools out there that you can use throughout the year to supplement the annual review, make your employees feel more valued and appreciated and ultimately, lead to a more engaged and productive workforce!


Thanks for reading and I’ll talk to you next month, if not before.



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1 Comment

  1. Katherine Boykin on December 31, 2020 at 6:29 pm

    Your place is valueble for me. Thanks!…

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