Traditionally performance management was referring to the process of the annual review. The annual review was used to make decisions regarding pay raises, promotions, or layoffs.  There are two main problems with this approach: first, it is focused on the past and many managers fail to relate it to current performance and future improvements.

Second, due to our busy schedules, it is impossible to remember details and events that happened 6 months ago. 77% of HR professionals claim that annual reviews do not reflect precisely on employees’ contributions. So why are annual reviews still with us and how can we improve performance tracking? 

Performance tracking is a part of performance management. In order to achieve effectiveness in your performance plan, employees’ activities need to be tracked on a regular basis and feedback should be given ongoing. Helping your employees to improve cannot be achieved through a once per year or once per 6 months review. There must be everyday communication and feedback provided in multiple ways by the managers- advice, training on specific skills etc. 

The definition of performance management is “the process or system by which an organization measures and improves performance within its workforce.” By investing in individual performance, you will be helping your internal teams and the whole organization. If this aligns with your goal, try to follow the steps of effective performance management. 

1. Tracking Data- talk with facts. If you want performance management to be effective, it is important to track data and be able to present it when performance is discussed. There are HRIS systems like BambooHr and Hibob that are going to help you keep track of it. 
2. Manager Feedback – more than half of the employees feel “left in the dark”, as they do not receive direct feedback from managers on what they need to improve. This is the main reason that there are gaps between the employee’s beliefs to the manager’s feedback in the annual review. In order to close those gaps and establish a consistent growth process, make sure that managers point out topics for improvement and at the same time positive aspects of one’s performance. It should be part of the daily routine. 
3. 360 degrees surveys- collecting assessments from teammates, customers, and the employees themselves can help you in getting a complete picture.  The manager is not always exposed to all the information and it will be useful to collect feedback from different sources and discuss it. 
4. Performance improvement plan- before making any critical decisions, try to help underperforming employees to get back on track. Use data and metrics in this process to create clarity for the employees, expectations-wise. 
5. Recognize good performance- it is important to let people know that their hard job is noticeable. You can reward programs or at least make sure you provide positive and meaningful feedback. 

Nowadays, it is easier to manage performance thanks to technology. Those processes are streamlined and tracked by performance management software that will help you and the direct managers complete related tasks and keep track of the KPI’s. If you choose to outsource development, make sure that one of your first requirements is to be able to access this data.