The systems developed further as the businesses got more complex, and the need to measure also included numbers. During the 1970s, they included many more psychometrics and rating scales in employee performance management systems. It was also a matter of how subjective and opinion-based the evaluations were; some resulted in lawsuits, so there was a clear need for more accurate data gathering and assessment. The term “performance management” was coined by Aubrey Daniels in the 1970s.

The next twenty years, from the 1980s to the early 2000s, saw an increase in companies focusing on employee motivation and engagement, which led to a more holistic approach to performance management and appraisals. Also, systems focused on seeking multiple feedback sources, which led to the commonly spread 360-degree feedback employee performance systems.

In our day, starting with 2015, there is a shift that appears to shape employee performance processes from regulated and fixed approaches to more dynamic and flexible ways to assess performance, with a consistent focus on integrating technology in this process.

With the dynamic environment in which businesses develop and the fast rise of technology, there are a few things to consider when approaching the subject of employee performance.

• · Focus more on giving and receiving valuable and ongoing feedback on the work done instead of measuring at a particular moment (even if we talk about objectives, goals, KPIs, personal traits, levels, or competencies). According to a recent internal survey, 53% of our employees seek weekly feedback from their managers;


• · Embrace and adopt technology as part of your day-to-day modus operandi, train your staff to use it efficiently, and be ready to swift approaches as soon as you observe certain practices become show stoppers instead of big helpers;


• · Don’t rely on memory when talking about performance reviews, keep records of your observations, and while you focus on giving continuous feedback, there should be no bias and opinion involved;


• · Always consider the big picture; in our quest to reach those business goals, those KPIs that show the performance of our business, it is essential to always keep in mind the context in which the company operates: the market prerogatives, the maturity of the company, the maturity of the employees (average age and level of seniority), the openness towards embracing recent technologies, the investments in raising the company’s efficiency, productivity, and technology updates.


• · Start from the recent findings, do not dismiss last time’s reviews, and do not set unrealistic goals, objectives, or KPIs.

In many organizations, employee performance fails to deliver on its scope and outcomes. Although there are many reasons, and generally there is a mix of them, the most encountered are:

1. The performance management system is not correlated with the company's strategic goals

Solution: Ensure that your employees understand how their specific roles and talents contribute to the larger organizational picture and create plans for them to offer additional value to the company.

2. The focus of the system is on annual reviews and not on tracking and ongoing feedback

Solution: Provide timely feedback. There is no better measure to implement than providing honest and on-time feedback to improve behaviors daily and shape end results.

3. The ratings trap is deadly; everybody loses when people focus on meeting specific scores instead of building certain behaviors.

Solution: Lower the burden of administrative tasks and the pressure on scores, focus on continuous feedback, and find ways for managers to improve their direct reports' performance.

4. The "recent" effect, when the evaluation is done on specific periods, and the examples used are taken only from the recent memory and not the entire assessed period

Solution: Provide feedback as actions develop. Remember, feedback is not personal and is not addressed to the person but to the person's behavior in particular situations.

5.No follow-up plan or actions, no matter whether you evaluate ongoing or just once a year; some actions need to follow your assessment

Solution: Use a tracking method and always agree with the employee on the next steps. They can address a corrective or developmental situation, but they need to exist.

Regarding employee performance tools, remember that their role is to make your life easier. It is not applicable if a process is too complicated, bureaucratic, or tangled. Take time to assess your system occasionally, and don't be afraid to change it if it does not serve the scope.

The scope should be tracking and improving employees' performance and productivity. Also, the tools you use should best reflect your activity. Whenever possible, go for the technology solution rather than pen and paper or good old email.

SWOT Analysis – this 4-perspective matrix (Strengths, Weaknesses, Opportunities, and Threats) emerged as a strategic instrument, a framework that allows from internal and external perspectives companies, departments, but also teams and individuals. So, it is a descriptive tool that can analyze a specific team or individual at a particular moment and allows them to decide on future priorities, actions to be taken, or objectives to be set.

360-degree feedback – the system got more visibility in the early 2000s and focuses on receiving a 360-degree overview of a person's performance. It is done through a set of surveys that focuses on competencies. These competencies can be from the soft side part or the technical side, and usually, they need to be ranked on a scale from 1 to 5. An aggregate score is obtained, and usually, it is correlated with specific effects like bonuses, salary increases, or promotions when expectations are met or above or contrary, correction plans or salary cuts apply when the desired scores are not reached.

OGSM stands for Objectives, goals, strategies, and measures. – It is a planning process that provides clear goals and identifies the strategic choices to achieve them. The best practice is to have them cascaded from top management, starting from the company goals and implementing them at the unit, department, and individual levels by respecting the same pattern. It is also evaluated by grades from 1 to 5.

OKRs stands for Objectives and Key Results - It is a framework for defining and tracking objectives and their outcomes. It is the trendiest instrument, combining the objective setting process following the SMART* conditions and including KPIs as its key results component. What is noticeable is the evaluation, as they are not focused on 1 to 5 scales but on percentages of how much an objective was accomplished from 100%, and the effect only resides on the fact that specific actions need to be taken to reach the 100% goal. Additionally, it is crucial to notice that it is most suitable for ongoing reviews as it is flexible and user-friendly.

Employee performance plan – This is an instrument used to establish employee performance goals (expectations) and support each employee's performance evaluation. It contributes to a systematic approach to employee professional development and can, in some cases, also be used as an employee evaluation form.

Employee scorecard – In most cases, it is part of the employee performance plan and reflects the individual's quantitative assessment, meaning the objectives, KPIs, and targets associated with the role. The performance scorecard can be used to set expectations and capture and monitor performance results. Most employee performance evaluation software will enable the configuration and automation of such a scorecard. If no software solution is used, the employee scorecard can also be designed in Microsoft Excel.

* Specific – target a specific area for improvement. Measurable – quantify or at least suggest an indicator of progress. Achievable – state what results can realistically be achieved, given available resources. Responsible – specify who will do it. Time-related – specify when the result(s) can be achieved.