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The Modern Guide to Performance Management Process

Team Kissflow

Updated on 2 Mar 2024 5 min read

Managing the 21st-century workforce can be quite overwhelming. Employees today demand much more than a career; they seek an experience. Attempts to retain such a demanding workforce with outdated employee engagement methods may turn out to be futile.

Only a magnetic workplace that continually attracts talent can sustain this generation of ‘job hoppers’. Traditional performance management practices are inflexible, and non-responsive to the needs of today’s workforce.

The performance management process has gone through considerable change in the last 5 years. To make it easy for you, we’ve composed a go-to guide to performance management in 2019, that you can use to develop and implement a powerful performance management system.

What is Performance Management?

Today’s performance management is much more than just a performance review. Rather than a one-time (usually annual) event, performance management has become more of a dynamic process that continuously identifies, measures, and improves an employee’s performance by aligning it with the organization’s mission.

Performance management is no longer a competitive evaluation. It is an ongoing process that focuses on the coaching and development of the workforce throughout the year, with a series of conversations between the manager and employee.

Benefits of an Effective Performance Management Process

Organizations with an engaged and motivated workforce have a crucial advantage over competitors that offer similar products.

Creating an effective performance management system is essential to:

  • Identify short- and long-term goals
  • Set clear performance expectations
  • Provide real-time feedback and constant coaching
  • Improve employee performance and productivity
  • Recognize training and development needs
  • Increase employee engagement and retention
  • Obtain insights into counter-productive activities
  • Align employee performance with the organization’s objective
  • Transform the workforce into a strategic business advantage

Myths around performance management software

As performance management methodologies become more mainstream, so do certain myths about performance management. Listed below are the top five performance management myths that cost businesses billions of dollars worldwide:

Myth 1: Performance management is rather easy to implement and manage manually


Manual performance management is time, labour, and cost intensive. On top of that, the inaccuracies and bias involved, makes manual performance management irrelevant. Modern performance management tools can help businesses carry out the process effectively.

Myth 2: Employees know what they need to do, there’s no need for need to measure performance


Performance levels are neither self-sustaining nor static. In order to retrieve high performance out of their employees, organizations need to implement a periodic but regular performance appraisal that supports, recognizes, and hold employees accountable for their performance.

Myth 3: Performance management is an annual ritual


Annual performance appraisals just evaluate the past performance of employees’, it does nothing to improve their performance. It is an ongoing process that provides employees’ with guidance, so that they understand what is expected of them and help the organization succeed.

Myth 4: Performance management doesn’t take much time, if you get the right consultant


Most businesses believe that they need process experts to get their people up the performance curve. It is something that requires continuous investment in the form of both process improvement and support from the organization’s front.

Myth 5: Performance management software is too expensive.


It is true that performance management software is not rather affordable, however, it is well-worth in their weight in value. It offers the best way to manage teams, streamline workflows, set smart goals, analyze performance periodically, and reward top performers.

Steps in traditional performance management process

Traditional performance appraisal methods comprise of four stages: plan, act, track, and review. Most businesses emphasise more on the review stage than the other steps. Employees are prescribed a list of objectives based on their jobs. At the end of the year, the performance review process is carried out using long drawn-out interviews between employees and managers.

It doesn’t assess the true performance of the employee—and usually has a detrimental effect on their morale.

Steps involved in new performance management process

The new performance appraisal process comprises of five essential steps: set SMART goals, align performance, solicit 360-degree feedback, reward performance, and initiate training.

1. Set smart, flexible goals

Unlike the traditional process that thrusts unrealistic year-long goals on employees (which they have no say in), modern performance reviews take a more productive approach. The stress-free, informal discussion between employee and manager allows them to come up with realistic, short-term goals that are future-focused.

2. Align performance

Periodic and timely feedback not only enables employees to perform better but also help businesses revise goals (if required) and align employee goals with ever-evolving business needs.

3. Solicit 360-degree feedback

Modern performance review processes don’t just collect frequent feedback from an employee’s immediate management but also from a variety of other stakeholders like colleagues, reportees, clients, and more. These 360-degree reviews help employees stay on track, work efficiently, and ultimately achieve their goal.

4. Reward performance

Periodic feedback establishes a good relationship between the employee and manager. Timely due diligence and acknowledgement of employee performance help businesses to track employee milestones and keep their employees motivated.

5. Initiate training

A robust performance management process enables businesses to spot skill demand and performance gaps effectively. What’s more, modern performance management tools allow businesses to put their incumbent employees through a robust training program that upgrades their skills and prepares them for new assignments.

6 essential features of performance management software

The digitized performance management process relieves the administrative strains involved in a performance management process. An automated process standardizes the strenuous process, reduces manual intervention, makes the review more transparent, and reduces the time taken.

Listed below are the 6 essential features that performance management software needs to have:

  • Automated forms: A digital employee performance evaluation form that comprises of a simple pre-designed survey to document regular check-ins helps organizations measure progress efficiently

  • Dynamic workflows: An effective performance management process will allow businesses to create rule-based workflows with conditional accessibility

  • 360-degree reviews: Businesses need to gather constructive performance reviews from a variety of sources including clients, subordinates, peers, and more

  • Performance reports: Insights obtained through digital performance reviews need to be precise and result-oriented

  • User-specific training plans: Based on individual performance trends, businesses need to keep their employees engaged with a powerful training plan

  • Rewards and recognitions: Organizations need to identify, reward, and retain top performers in a team with a tailor-made reward and recognition program

5 performance management best practices everyone should know

A number of surveys point to the widespread disappointment with traditional performance appraisals. Listed below are a few recent findings that point to key changes that are transforming the performance management landscape.

  • Most organizations are moving away from traditional performance appraisals and reinventing their performance management process. According to Deloitte’s Global HR Trends, 70% of companies are reinventing their performance management process.

  • More and more businesses are focusing on improving employee experiences in the performance management process since research denotes that a highly engaged and motivated employee is 125% more productive than an employee who is merely satisfied.

  • John bresin’s speech at a HRD summit stated that companies are losing approximately £42 bil­lion a year because of stress at work. As a result, most top performing organizations have started to make employ­ee well­be­ing a part of per­for­mance reviews.

  • Since, most millennials demand professional development and career growth opportunities, learning and employee development has taken the centre stage.

  • As organizations have started providing more feedback on a continuous basis that will help in mentoring employees rather than reviewing past performance.


No matter how effective digital forms are, you simply cannot eliminate all the pain points involved in a performance management process using just forms. This doesn’t necessarily mean that you have to invest in an exclusive performance management tool. In fact, a straightforward platform that integrates these forms with necessary components and allows you to follow a collaborative approach will reduce much effort.

An efficient HR software will integrate the forms with a cloud-based, robust document management system that stores the captured data and dynamic HR workflows that automate the performance management process. Using an all-in-one HR suite like Kissflow HR Cloud, businesses can align individual employees and teams with their organizational goals and strategies efficiently.

Kissflow HR Cloud allows businesses to standardize their employee appraisal process while offering them the flexibility to tailor it to their business needs. Irrespective of their size, businesses can create a dynamic performance management process that enables them to achieve future-focused results. Sign up for a free demo of Kissflow HR Cloud to create a performance-driven organizational culture that drives employee success, organizational growth, and profitability.

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