Performance management is the process of a manager and direct report aligning on a set of goals, as well as how the employee should be measured against those targets. At regular times (traditionally, quarterly, every six months, or annually), the manager and employee meet to determine how effective the person has been at reaching the agreed-upon goals – and if not, what changes need to be made to improve performance.
In a continuous performance management process, goals are set at the corporate level. These goals are then broken down into components, or “cascaded” down through the appropriate functions. Managers then assign goals to the employees responsible for tasks or objectives that have cascaded down, but employees also create their own personal and business goals to supplement the larger objectives. People regularly review their goals with their managers and discuss tactics on how to achieve each of them. As employees complete their goals, there’s a clear chain of how each goal contributes to broader targets that originated at the corporate level.
In a traditional performance management process, goals are typically set at the beginning of the year. Brief assessments may occur at regular times throughout the year, but a full employee review tends to take place after 12 months’ time, when the person is assessed in terms of having achieved their goals. Other factors may come into consideration as well, such as agility, creativity, and collegiality.
In 360 reviews, employees tend to review each other, usually within their own department and even their own manager. These reviews tend to take place on a biannual or annual basis and tend to be anonymous. But, they are viewed as a good way for peers to improve their interactions with each other to foster a more collaborative and productive environment.
In continuous performance management, measurement against one’s goals happens on a rolling basis. When people meet a goal or objective, they simply mark it as complete. This then informs the manager that the goal is met; and this can be radioed all the way to the C-level, identifying which pieces of larger strategies and objectives are being achieved and which are not. When the time comes for the annual review, it’s easy to see which goals were achieved and which were not.