Top 7 trends in performance management you need to know

Performance management centers on the tools, resources, and feedback you give employees to promote their development and future growth. While it's not a new concept, some recent trends have changed how companies invest in their employees. These trends in performance management can go a long way toward helping your business attract top talent, retain your highest performers, and eliminate skills gaps to ensure future success. Learn about seven of the top performance management trends for 2024 so you can decide which ones to implement for your organization.

Continuous feedback

Will annual performance reviews soon become a thing of the past? It appears so. More employers continue to move away from yearly reviews in favor of ongoing employee feedback. Providing continual feedback can empower employees to improve their performance and grow in their roles. According to Gallup research, an overwhelming 84% of employees report being more engaged at work when they've received meaningful feedback in the past week.

Embracing continuous feedback over traditional performance reviews requires consistent effort and buy-in from top leadership. Ensure managers know the value of providing regular feedback and offer ideas about how to provide it. For example, your business can:

Implement weekly check-ins between employees and their managers
Create a recognition program to reward top performers for their work
Use a 360-degree feedback structure for employees to get insights from managers and peers
Encourage managers to provide informal feedback after tasks or projects

Peer mentorship programs

In addition to continuous feedback, more companies have implemented mentorship programs to encourage employees' professional growth. In some cases, it's not fair to ask managers to take on the added responsibility of coaching employees. According to a recent report by Gartner, 49% of managers say they have more complex responsibilities now than they did several years ago.

Instead of asking managers to become coaches, consider implementing a peer mentorship program where you match high-performing employees with workers who may benefit from one-on-one coaching. This mentorship program can allow your top talent to develop leadership skills, preparing them for future growth within your organization. At the same time, it allows new hires and underperforming employees to network, learn the company culture, identify ways to improve their skills, or develop processes to progress in their roles.

Employee upskilling

Addressing the skills gap will continue to be one of the top performance management best practices. Upskilling refers to continuous learning and development opportunities for employees to expand their skill sets. By investing in your current employees, you can position your business for long-term success. Besides closing the skills gap, employee upskilling can help your organization:

Create an engaged, motivated workforce where employees continually grow their skills.
Attract and retain top talent by providing professional development opportunities.
Decrease hiring costs by promoting existing employees into higher roles.
Improve retention rates by boosting employee morale and satisfaction.

If you don't already have an upskilling plan in place, aim to create one. Start by assessing the current skills your workforce has and the gaps that exist. For example, you may have a robust sales team, but you need marketers with video expertise to create content for new platforms. From there, you can identify ways to train employees in new skills. Some ideas include:

Professional development courses
Certification programs
Peer-to-peer learning
Mentorship programs
Self-led learning
Job rotations

"By investing in your current employees, you can position your business for long-term success."

Talent mobility

Chances are you have employees in your organization who haven't yet reached their full potential. A major performance management trend will be providing opportunities for talent mobility. This trend focuses on identifying high-performing employees and finding ways to make sure they advance within your company, rather than leaving for better opportunities elsewhere.

Not only can this allow you to retain top talent, but it can also benefit your company's bottom line. Currently, between 20% and 30% of critical roles in many businesses aren't held by the best people, according to McKinsey and Company research. What's more, high performers are 800% more productive — yes, you read that right, 800% — than average performers in the same position.

Use this next year to align your performance management strategy with talent mobility and employee growth. Use objective metrics to evaluate employees' performance so you can identify the top performers on your team. Then, invite those employees to be part of a talent mobility program. This program might involve developing their leadership skills, offering training initiatives, or providing opportunities to learn from other leaders. Make sure you promote the program so other employees feel motivated to grow their careers with your organization.

Emphasis on employee recognition

Employees want to be recognized for their hard work and contributions to the team or organization. By recognizing employees who do well, you motivate them to continue performing at a high level while encouraging other workers to follow their example. Expect to see more companies taking steps to recognize and reward employees.

There are countless ways you can acknowledge employees for their performance. Choose the strategies that best align with your performance management goals. Some ideas include:

Team lunches after a successful project
Celebrations on work anniversaries
Employee appreciation days
Handwritten thank-you cards
Public acknowledgment in meetings
Mention in an employee newsletter
Peer-recognition programs
Gift cards or company swag

Data-driven insights

Human resources (HR) professionals have more data at their fingertips than ever before. Many companies now use cloud-based HR software to gain real-time insights about their workforces. Often, this software can provide immediate feedback on employee performance metrics, which you can use to determine the effectiveness of your performance management strategy and adjust as needed.

You can use these metrics to identify performance trends specific to your organization. For example, these metrics may show a significant skills gap between entry-level workers and intermediate employees. From there, you can determine how to equip entry-level employees with those skills so they can continue to grow and thrive in your organization. You can use this real-time data to plan for the future and make informed decisions about how to align employee performance goals with business objectives.

Employee well-being

Though more companies have prioritized employee well-being in the wake of the pandemic, it seems that most workers don't notice their efforts. Gallup research shows fewer than one in four employees believe their employer cares about their well-being. This negative perception can lead to employee burnout, decreased productivity and performance, and lower retention rates. When you can show employees you care about their mental health and well-being, they're more likely to be productive and do a better job in their roles.

Building a workforce of happy, motivated employees starts with adopting a people-first mindset as part of your company culture. Have discussions with the leadership team about ways you can prioritize employee well-being in the workplace. For example, you might encourage managers to create open channels of communication for employees to discuss their work-related problems or concerns. Some other ways you can improve employees' well-being include:

Implementing a flexible work model to enhance employees' work-life balance
Offering mental health days as an employee benefit, in addition to sick days and paid time off
Providing whole-person resources to employees, such as financial tools or wellness programs
Creating employee assistance programs for mental health

An effective performance strategy can boost employees' productivity, increase their engagement at work, and prepare your company for future success. Consider these trends as you find ways to enhance or improve your current strategy. By implementing some best practices, you can empower your employees to grow in their careers and make meaningful contributions to business objectives.

More tips on performance management

Employees who feel fulfilled in all areas of their lives, not just work, usually perform better and have higher productivity levels. Check out these 10 ways you can support employees' mental health.

Burnout is often a factor when an employee's performance drops. Make sure you know the signs of employee burnout so you can actively take steps to prevent it.

Learning and development is a key part of the employee experience. Discover how you can improve other areas of this experience, including recruitment and retention.