Performance management trends in employee reviews

Whether you lead a large team that's part of a big corporation or a small startup, employee performance management techniques are essential. Keeping up with performance management trends can help you and your organization measure your employees' performances and decide whether people are meeting your company's stated goals and objectives. Here are some of the latest trends in performance management.

Ongoing performance evaluations

A recent performance management trend is to provide regular, ongoing performance feedback for employees instead of conducting annual or semiannual performance reviews. Meeting one on one with employees regularly allows managers to discuss performance issues at the moment and redirect any undesirable behaviors before performance issues become ingrained and difficult for employees to change. Managers may still conduct formal evaluations regularly for more extensive analysis and goal setting. According to the Society for Human Resource Management (SHRM), 82% of workers in 2016 said that their companies used annual reviews. That number dropped to 54% in 2019.

Management evaluations

Managers are usually responsible for guiding their direct reports to complete tasks. The performance of an employee is often linked to the supervisory skills

of their managers. A new performance management trend lets employees evaluate their managers in many areas. This can help department heads and other company leaders oversee and direct middle managers. Like performance evaluations and employee reviews, many management evaluation models exist. 

360-degree performance ratings

A 360-degree rating involves everyone who interacts with a manager or employee. Businesses can get feedback from customers, suppliers, coworkers, and supervisors on a specific employee or an entire department. 

Forced-choice reviews

With a forced-choice review, people look at a list of statements, like "Collaborates well with others" or "Makes few errors while completing their duties." Then, they put a check mark or a plus sign next to the statements that match the person being evaluated.

Team assessments

A team assessment or review evaluates the entire team and how they work together and collaborate with each other. When managers find out about any conflicts between employees or difficulties with communication or workflow, they can work to correct the problems and improve team productivity. 


Another trend in performance evaluation is allowing employee self-evaluation. This gives people a chance to discuss their most notable accomplishments and achievements with their supervisors. They can also talk about their goals and professional objectives and their challenges and improvement needs. Managers can review employees' submissions before they conduct performance evaluations.

Rewarding high performers

Performance evaluations are often linked to pay increases. When people perform at a certain level, they get an increase in pay. Many companies are modifying their employee recognition programs. Instead of giving pay raises when people meet a minimum performance level, they give regular cost-of-living increases, base pay on employees' contributions, and award bonuses and profit-sharing options to high performers.

Eliminating ratings and metrics

Employee evaluation forms and software programs often use a point system to help managers rate employees. However, this form of measurement has limited effectiveness, especially when the employee's performance and the quality of their work are subjective. Instead, managers evaluate different aspects of employee performance, including:

  • Engagement
  • Employee contributions
  • Problem-solving skills
  • Teamwork initiatives

Modeling good behavior

Managers can do a lot to influence the actions of the people who work for them. Modeling behaviors like collaboration, inclusion, and trust to your employees gives them an example of how to behave. When people become used to following your examples and modeling your values, they'll feel more empowered to act if they see them being compromised. Managers who model appropriate behaviors to their employees can create an atmosphere with greater loyalty and trust. They can also show everyone around them that conflicts and personal differences won't impact morale or performance.

Giving constructive feedback

Constructive feedback doesn't just involve telling an employee what's wrong with their performance. It's also necessary to work with the person and help them find a way to improve their performance. If you need to give negative feedback, talk about your improvement suggestions in positive terms. You can also let the person know that they could earn a reward, like a raise or an additional vacation day, by improving.

"According to Firstup, 75% of the global workforce will be millennials by 2025."

Recognizing employees

Earning recognition for achievements is important to many employees. It can help them feel valued and appreciated, and it can motivate them to improve their performance. For example, a team of salespeople can compete for the most sales in the month, and the person who gets the most sales could get a small bonus or a gift card for a popular store. Recognizing individual contributions instead of focusing on criticism can help employees feel more valued, respected, and appreciated. They're more likely to perform better than people who only hear an occasional compliment.

More millennials as managers

According to Firstup, 75% of the global workforce will be millennials by 2025. This means that more millennials will be in leadership roles. Companies need to adapt to generational differences and appeal to millennials in order to attract the best managers and employees. Millennials are the least engaged generation in the workforce, and they switch jobs more often than other generations. You can appeal to millennials by offering flexible schedules, the option to work from home, and opportunities to apply for raises or promotions.

In companies where managers demonstrate a sincere interest in their workforce as individuals, productivity can increase by eight times and innovation can increase by seven times.

More people changing jobs

While previous generations often stayed at the same company for decades, millennials tend to change jobs more often. You can encourage employees to keep working for your company longer by creating a welcoming company culture and occasionally hosting events to improve employee morale. It's also a good idea to make sure that people have opportunities for promotions and raises. This way, people won't have to change jobs to advance their careers.

More freelancers

According to Freelancers Union, 57 million Americans freelanced in 2022. That's 35% of the workforce, and many more people will likely join them in the coming years. Hiring freelancers gives companies more flexibility and easier access to workers with the skills they need. Consider offering an online workspace where freelancers can work seamlessly with regular employees, sign up for new tasks, and get paid. You can also use the online workspace to evaluate freelancers' work and give constructive feedback.

Transparency in leadership

Transparency is a popular performance management trend, and it's an important part of being a good leader. Make all company rules and regulations easy for employees to access online, and let people know your reasons for giving raises or promotions or deciding to keep people in the same positions. Some companies have even implemented an open salary system. Making everyone's earnings transparent increases oversight and helps ensure that they're treated fairly. Discussing company plans and problems with your employees demonstrates your trust in them, encouraging them to keep working for you.

Monitoring employee happiness and performance

People who enjoy their jobs and feel happy at work tend to be more productive than people who spend most of the day looking forward to the end of their shift. Conducting regular employee satisfaction surveys gives the people who work for you a chance to provide feedback and suggestions about how to make work a more welcoming place.

You can offer flexible schedules, set up a break room where people can relax, let people take vacation or sick days, and reward high performers. By keeping employee happiness high, you can improve your company's reputation.

Using objectives and key results

Objectives and key results or OKRs are a quarterly goal-setting technique and a popular performance management trend. Objectives are qualitative or subjective, and they tell you what your team needs to improve most. The key results are measurements that let you know when you meet your objectives. Managers often start projects or initiatives to achieve objectives, and they check in with team members weekly to learn about their progress. Having clear objectives for the entire team helps people work together and be more productive with minimal competition or conflict.

There's no perfect system for employee performance management, but more employers are following performance management trends and implementing progressive processes. These are some of the most useful trends in performance management.


Read more about trends in employee reviews:

Are you wondering how to improve your problem-solving? Check out this article to improve your skills.

Even managers must submit to performance reviews. Here's how to prepare for your next performance review.

Are you interested in being a manager? Check out some performance management jobs.

Here are some management skills that can help you evaluate employees accurately.


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