The science behind continuous performance management

For years, experts and organizations have been rethinking the performance management process. The traditional approach to performance reviews puts a lot of pressure on teams – both in terms of the overwhelming workload come review time and the emotions associated with delivering or receiving assessments. Throughout the process, the HR team expends a tremendous amount of energy ensuring reviews are submitted in a timely manner, administering calibrations, and leading the process around promotion decisions.

The Culture Amp platform is designed to simplify this process – and make it less stressful for everyone. Beyond annual reviews, organizations can use our platform to embed ongoing performance touchpoints throughout the employee experience and collect feedback for easy reference during the review cycle. Employees who participate in regular 1-on-1s and feedback conversations generally know where they stand well ahead of the formal review, with no surprises.

In this article, our People Science team shares the research behind continuous performance management and offers a closer look into why an “in the moment” approach has the power to revolutionize the performance management process.

What do we mean by continuous performance?

At Culture Amp, we consider continuous performance to include the following activities completed at either the beginning of or during a performance cycle:

• Clear goal and expectation setting, including development planning
• Ongoing 1-on-1 conversations, including check-ins and coaching
• Regular feedback in the moment
• Regular measurement/tracking to support employee performance and growth

Some articles on reinventing performance management imply that continuous performance replaces performance reviews – however, we believe it's important to do both.

We’ve written about why it’s important to keep formal performance reviews, but in short, they serve to ensure consistency and fairness in the way employees are treated, including promotion and compensation decisions, as well as provide data that can be used to improve employee performance and the review process itself.

Adopting ongoing performance activities, where performance tracking is spread across the year, allows organizations to address key moments in the employee experience, such as goal creation, progress updates, recognition, feedback, and developmental milestones, as they occur.

Capturing these moments provides an easy reference during the formal performance review – making it a lighter lift, reducing common biases (like recency bias), and removing stress while also helping employees and managers have more productive conversations year-round.

Continuous performance improves retention and performance ratings

To validate this approach, our People Science team identified the impact of our platform on building a continuous approach to performance management. Our research showed that using the continuous performance tools within the Culture Amp platform – such as 1-on-1s, goal setting, Skills Coach, shoutouts, anytime feedback, and nudges – led to positive organizational outcomes including lower turnover and higher performance ratings.

Encouraging employees to use the Culture Amp performance and development modules is associated with lower employee turnover. Additionally, low usage of the goal management module may indicate that employees are considering leaving the company – a useful signal to leaders that an intervention may be required. This suggests that continuous performance and goal-setting activity drive employee engagement and retention.

Further data suggest that those that use the platform are more likely to see an increase in their performance rating than those that don’t. This performance increase may also translate to an increased likelihood of promotion. Specifically, in 80% of organizations, setting a goal was associated with a higher promotion rate. These results suggest that goal setting may be a catalyst for employee development that ultimately leads to career growth.

Putting it into practice

Based on these findings, here are some recommendations for organizations embracing continuous performance to enhance the formal review process:

1. Encourage regular feedback: Research suggests "requesting" feedback is a faster way to build a culture of feedback. Encouraging managers and employees to share their thoughts and insights throughout the year – and request feedback from others – fosters a culture of continuous improvement and growth.
2. Use Culture Amp to document and track feedback: Capture feedback in the moment soon after it is discussed so you can easily reference it during the next performance review cycle. This ensures a comprehensive and fair assessment and saves time when completing reviews. Culture Amp’s “Anytime Feedback” tool is accessible across the platform, consolidated, and displayed during the review process for easy reference.
3. Set clear goals and regularly discuss them during 1-on-1s: Our research shows that setting goals is associated strongly with lower turnover and increased performance ratings. However, just setting and forgetting is not beneficial; discuss and adjust goals regularly to set employees up for success.

Shifting to a culture of continuous performance management starts with small behavior changes across the employee experience. This approach reduces the cumbersome nature of the performance review cycle, improves employee performance, reduces bias, and decreases the risk of turnover. As a result, organizations work smarter – and deliver meaningful business results.

Turn science into action with Culture Amp

See how Culture Amp’s science-backed solution can help you drive behavior changes at scale to improve performance management for managers, employees, and HR teams.

Learn more