Whatever approach you take to measuring performance, and there are many, you should adhere to one essential principle:
De-couple your performance measurement from your regular performance conversations
We know from numerous research studies that we improve performance by having regular, meaningful, developmental performance conversations. However, if we try to add any form of performance measurement or assessment into those conversations, the performance improvement impact is immediately lost. An employee is rarely going to be honest about their areas for development or improvement if they know a performance rating is coming at the end of the conversation. This is one of the key reasons why traditional appraisals aren’t effective.
So as the Chartered Institute of Personnel and Development (CIPD) stated in their recent Performance Management research report:
Introducing some clear water between assessments that inform pay and promotions and those [processes] that help employees improve should make performance management a far smoother, more productive and less fraught process.”
In practice, this means having a separate process that you operate periodically with the sole purpose of assessing performance and potential, which sits outside of your regular check-in discussions, as shown in the diagram below:
In our Clear Review performance management software, we call this process Viewpoints(although it can be called whatever you want) and it enables HR to collate the views of their managers about the performance and/or potential of their team members using a simple, customisable online form. The answers can then be reported and analysed. Our customers typically do a round of Viewpoints annually, bi-annually or quarterly, depending on the nature of their business and how fast moving it is.