How to use data to improve performance management

That’s the crux of performance management. And getting this approach right requires more than anecdotal evidence and gut feelings — you need real, hard data.

What is performance management?

Before we get into the important role of data in improving performance management, let’s step back and answer this crucial first question: What exactly is performance management?

Performance management is a continuous process to help employees develop new skills and improve their performance at work. There are several functions rolled into the performance management process including:

• Goal setting: Identifying employee development goals that also align with the organization’s needs and objectives
  
• Development planning: Hashing out plans and tactical steps for employees to achieve those goals
  
• Continuous monitoring and feedback: Keeping a close eye on how employees are progressing toward those goals and providing supportive, constructive feedback along the way
  
• Performance reviews: Hosting frequent (ideally every six months) conversations to evaluate the employee’s performance against goals and provide deeper feedback
  
• Rewards and recognition: Celebrating and incentivizing high performance through genuine praise, promotions, bonuses, and more

An annual performance review doesn’t cut it anymore. Employees are hungry for ongoing clarity, feedback, and support that helps them be at their best in their roles. A modern approach to performance management differs from a traditional performance appraisal approach in a few meaningful ways:

Put simply, performance management  integrates your employees’ development into the daily work, rather than waiting for the annual review time to roll around.

The term “performance management” itself sounds like something that’s only applicable to struggling employees and low-performers — sort of like a performance improvement plan. However, performance management is an important process for all employees (even your top performers).

According to research from MIT Sloan, 67% of individual contributors say they want to advance their careers. Yet, in other research from Gartner, only 46% of employees are satisfied with the career development support they receive from their organizations.

That’s a big risk, especially when Pew Research Center found that “no opportunities for advancement” is one of the top reasons why people quit jobs.

Performance management makes your employees’ development a consistent priority — rather than an annual box to check. That boosts engagement, increases retention, ensures alignment, and ultimately improves individual (and organizational) performance.

How can data improve performance management?

There are plenty of benefits to reap when you commit to performance management, but you can’t build a solid strategy on hunches and best guesses. You need data. With data in your back pocket, you can:

• Set targeted and meaningful goals for employees
• Personalize and tailor employee development plans
• Offer relevant growth opportunities
• Provide holistic and specific employee feedback
• Adjust performance metrics

Here’s the inevitable next question: What kind of data do you need for performance management? That largely depends on your specific goals, but here are a few places to start:

• Performance metrics and key performance indicators (KPIs)
• Manager and performance review feedback
• Self-assessment responses
• Employee feedback from engagement surveys
• Attendance records
• Skills gap analysis
• Employee retention and turnover information

Having all of that data at your fingertips (a platform like Workable can help you simplify this process) can help you improve your performance management processes in the following ways:

1. Collect objective insights

As much as managers might try to stay impartial, they almost always express explicit and implicit bias. Further research shows that it’s hard — if not almost impossible — for managers to remain completely objective.

That’s one of the major benefits of data. It goes beyond feelings and favoritism to help leaders collect objective insights and draw less-biased conclusions.

By relying on quantifiable metrics and indicators, managers root their evaluations in facts and make decisions based on actual performance rather than personal perceptions. That not only makes your performance management process more fair and consistent, but also leads to more accurate assessments and actionable feedback.

2. Identify problem areas

It’s common for managers and employees to have perception gaps, with leaders often having a rosier view of what’s happening than their direct reports do. That applies to performance management too. Managers can often be overly optimistic about how they’re currently handling performance conversations:

• 45% of managers say they’re having organized conversations to discuss performance with team members once or twice a month
• Only 18% of employees agree with that statement

In fact, 40% of employees say leaders are having those organized conversations with them just once a year or even less than once a year.

It’s clear that the way employees experience the workplace (and their relationships with their managers) is drastically different from how managers perceive it.

That’s the good thing about numbers: They don’t lie.When managers and HR teams keep a watchful eye on metrics and KPIs, they get a more realistic view of what’s actually happening. They can use that information to identify performance trends and related roadblocks — oftentimes well before employees would raise the issue themselves.

3. Make strategic improvements

While there’s always room for experimentation, managing employee performance isn’t an opportunity to throw spaghetti at the wall. Anything related to performance understandably puts employees a little on edge, which means changes should be intentional and well thought out.

That’s another benefit of data: It helps you identify improvements that will actually move the needle for employees.

For example, perhaps your engagement survey data reveals that employees don’t understand how their individual goals ladder up to the larger organizational objectives — and your performance metrics show it’s making it tough for them to stay motivated.

With that information, you can take strategic steps to address the root issue (a lack of visibility and alignment), such as:

• Ensuring each documented, individual performance goal directly connects to an organizational goal
  
• Providing training to managers about how to connect individual contributions to the bigger picture
  
• Creating a company-wide dashboard for employees to monitor company progress toward larger goals

By using data to pinpoint areas of improvement, you’ll roll out changes that are more targeted, impactful, and aligned with both employee needs and organizational priorities.

4. Track progress and trends

Performance management isn’t about making one-time changes — it’s about fostering continuous improvement. That means consistently monitoring data and relevant metrics to quickly recognize what’s working and what isn’t.

For example, tracking data over several months could help you see if the new development program you put in place is improving employee performance, engagement, and satisfaction or if you need to make more adjustments.

Ongoing analysis helps you be proactive, continually refine your approach, and develop performance management strategies that are both effective and responsive to your team’s evolving needs.

Performance management that’s rooted in data (not delusion)

You want your employees to perform at their best — and getting them there doesn’t need to be a shot in the dark. When you have data to work with, performance management goes beyond speculation and suspicion to become a strategic and evidence-based process.

When you use data to set clear goals, proactively identify issues, make informed changes, and closely track your progress, you create a more fair, transparent, and effective approach to helping your team succeed.

Your employees’ growth is too important to leave to chance. Rely on data to build a performance management process that’s proactive, precise, and powerful. 

Simplify your performance management process with Workable. Get started today.