Performance management in the 21st century

12 May 2018

This article was featured in the June 2018 issue of the magazine.

Michelle Shelton, product planning director at MHR, discusses the reality behind management practice, and why there is a need for change in mind-set.

While the world of work has evolved at a phenomenal pace over the past decade, in many cases, management practice and organisational culture have not, leading to endemic employee engagement issues. Our recent whitepaper, Performance Management in the 21st Century (, provides further critique of this issue, and offers alternative techniques designed to encourage engagement and success. 

In this article, I will explore annual appraisals and why more and more companies are turning to real-time performance management.

The annual appraisal is a practice dating back to the middle of the 20th century – a time when work was stable, manual, predictable and repetitive. Very little changed in a year. Contrast that with the working environment of today – a world of varied roles, time-saving technologies, project work and constant change. Performance reviews as an annual event no longer cut it. Worse still, they serve to disengage and demotivate employees, while placing an unnecessary burden on human resources (HR) and managerial staff. It is a combination of outdated rigid practices such as annual appraisals and performance ratings, in addition to bad management practice, that is stifling employee engagement and forcing people to quit their jobs.

Research carried out by YouGov on behalf of MHR in 2017 reinforces this:

  • 54% of UK employees described annual appraisals as “pointless” or “time-consuming”, and half labelled the process as “stressful” or “difficult”, and

  • 80% reported experiencing poor management, of which a staggering 55% admitted that they left their job as a result. 

Worryingly, several respondents also said they had experienced bullying, micro-management, aggressive and threatening behaviour from their managers during recent employment.


...saves time, engages employees, and promotes good management practice


Forward-thinking organisations are now beginning to replace annual appraisals with real-time performance management – a process that saves time, engages employees, and promotes good management practice. In this system, employees receive on-the-spot feedback and coaching from their managers, at the point in time when it’s needed. This transition represents a major change in process and culture. HR professionals, now freed up from the administrative burden of annual appraisals, will be instrumental in implementing real-time performance management. Some key points to consider are as follows.

  • Manage check-Ins – HR departments need to consider how performance check-ins are managed and scheduled, how feedback is recorded, and how to ensure that they happen. Thankfully, HR software packages should allow you to manage all aspects of the process, from scheduling check-ins to logging feedback and progress, empowering managers and employees alongside HR and creating accurate real-time data on your entire workforce.

  • Focus on strengths – The importance of strengths-based conversations in performance management is based on the theory of ‘appreciative inquiry’ (Cooperrider and Srivastva 1987), which suggests that people are more likely to improve by understanding and building on their strengths, rather than focusing on their weaknesses. In strength-based conversations, managers ask employees to focus on recent successes and discuss skills and competencies that made them possible. This represents a radical shift from the norm, where most people instinctively investigate their weaknesses in an attempt to avoid them in future.

  • Create a sense of direction – Creating a set of core values gives your employees something to get behind: a sense of direction, shared goals, and the feeling of being involved in the bigger picture. Real-time feedback helps both employees and managers align their work and goals to these values, promoting employee engagement and long-term success. 

  • Promote a new culture – Employees are no longer putting up with unapproachable bosses and intimidating work environments and are quick to voice concerns via social media. They want to be part of a culture that appreciates their skills and talents and recognised for great work. Real-time feedback promotes a modern, inclusive and collaborative work culture, where employees can approach managers for feedback or advice as and when they need it. Under this system, managers double-up as coaches and mentors. This helps steer people and projects in the right direction and offers much-needed support for both under- and over-performance. For this to work, this new way of thinking will have to be applied from top to bottom.