Annual performance review. Is there another three-word phrase in the English language that can so successfully fill people with an overbearing sense of dread?
Maybe ‘replacement bus service’ is up there as a contender.
The annual performance review is what a lot of people’s minds jump to when we think about performance management, but that’s just a small part of the process.
Performance management encompasses a whole range of strategies, from setting goals to assessing progress and keeping employees’ skills up to date, all with the end goal of improving performance.
So, it’s important that performance management is done right. The traditional processes, of which the annual review is a stalwart, are beginning to feel outdated and ineffective.
Many organisations have already made the switch to informal performance management processes but it’s all about achieving the right balance for your organisation. Let’s look at how that can be achieved:
What are the goals of performance management?

1. Identifying and resolving issues
Identifying and resolving issues early on prevents them from snowballing into much larger problems down the line and also keeps your staff feeling happier and more engaged.
Whether these conversations lead to a need for more training or just a bit of guidance from more senior members of staff, identifying opportunities for the development of your staff’s skills can be hugely beneficial for organisations.

Ensuring that employees, especially high performers, feel as though they are trending upwards in your organisation and have a potential path of progression in front of them can be useful for keeping them engaged and excited about working for your company.
Asking if they have an interest in any particular aspects of their role that they might like to expand or specialise in down the line will ensure that they feel listened to and give you an indication of where future managers and leaders might come from.
All of the above goals contribute to employee retention because, done right, performance management gives staff an opportunity to iron out any issues they are having and improve their prospects within the organisation, keeping them engaged and happy.
Some common performance management issues

Here are some of the common performance management issues and how to avoid them:
- Lack of clear goals – without goals to measure employees against it can be difficult to establish what constitutes good performance. Goals should be measurable and clear so both you and your staff know what they are working towards.
- Lack of regular communication – the traditional annual performance review system risks letting issues linger for longer than they need to. Keeping in regular contact with employees ensures they are happy and heading in the right direction.
- Lack of skills or time – if your employees aren’t meeting their goals it’s important to find out why. Often it can be a lack of necessary skills or simply not enough time in the working day that is holding them back from success and resolving these issues will set them back on the right path.
- Lack of feedback from employees – performance management shouldn’t be a one-way street. Employees of course need feedback to act upon but you should also welcome feedback from them about the processes and systems that are in place around them.
Hubken’s Totara Perform Solution |
What is ‘traditional’ performance management?
The traditional style of performance management focuses on performance reviews, often annually, as a way of letting employees know how they are performing, and performance improvement meetings for employees who are struggling to meet objectives.

Because they often only occur once a year, feedback has to stretch over the entire period and often achievements or failures can be missed or glossed over in favour of the bigger picture. With little or no recognition of achievements throughout the year, employees can quickly start to feel undervalued.
Here are some key points to keep in mind when it comes to performance improvement:
- Employees should be given a chance to explain – there may be barriers to success that mangers were unaware of, whether that’s a lack of skills or time, or even factors outside of the work environment. These can then be worked through and the employee supported.
- Expectations and timelines for improvement – as important as it is to support your employees, it’s also important that they do actually improve. Setting out expectations and timelines for their improvement will allow them to work towards clear and achievable targets.
Why introduce informal performance management?
Many organisations are beginning to challenge the traditional, formal performance management systems and make the switch to more informal, fluid processes that benefit not only the employees but also the organisation as a whole.
Implementing changes to processes that have been in place can seem daunting and that’s why software such as Totara Perform has been developed to help managers revolutionise their performance management processes with simplicity and speed.


You should also have an open-door policy. Whenever employees have something they need to say or an issue they need to resolve, you need to be available and willing to listen and work with them on any necessary resolutions.
With that in mind, acting as a mentor to your employees can be a hugely rewarding part of the job for all parties involved. Sharing knowledge and providing opportunities to improve their skills will help employees feel more confident in their roles. Providing encouragement and asking for their input in things will also make them feel valued and listened to.
The more you show you’re willing to invest in employees, the more likely they are to be receptive to feedback, engage with their work and feel a sense of loyalty to the organisation.

Managers should always be able to provide feedback to employees, as well as take on board feedback from their staff. Getting feedback from an employee’s peers too can help managers more easily identify top performers and those who need extra support.