Organizations always face pressure to optimize operations and enhance productivity all while maintaining strong employee engagement, but this pressure becomes immense during times of economic uncertainty. As companies navigate these uncertain times, reimagining performance management is more than simply a strategy for survival; it’s a pathway to thriving in the long term.
When done well, performance management drives both business strategy and the desired organizational culture. However, it can be challenging to achieve these desired outcomes given often-conflicting perceptions among stakeholders.
For example, employees are largely looking for coaching and feedback, yet past experiences may create apprehension about the performance management process. Managers want simplicity but often are not as skilled in providing coaching and feedback. Business leaders are looking for a process to set expectations, hold people accountable and reward those who perform above expectations.
Given these competing interests, refreshing your performance management process and building manager capabilities is well worth the effort — particularly when pressure is increasing to get performance management right.
A well-designed process is proven to drive business results. By enhancing employee experiences, investing in manager capabilities and aligning performance management with business objectives, you will not only withstand challenges, but also set a foundation for sustainable growth and success.
Employees prioritize stability and career growth, particularly in uncertain times. A well-structured performance process is integral to creating and fostering a positive employee experience.
Employees want to do a good job and contribute to business success. And most employees want to understand how they are performing against expectations, or they look for information that will help them achieve their career aspirations and development.
When you prioritize clarity, fairness and development in your performance management systems, your organization can readily provide the data and insights employees need, effectively fostering greater employee engagement.
Managers play a pivotal role in executing your organization’s performance management processes, yet many cite either being too busy to focus on coaching and feedback — or they simply don’t have the skills to do so. Awkward conversations and misunderstandings can be created when managers aren’t well educated and provided with role-playing opportunities to learn how to give constructive feedback.
Given current economic conditions, strengthening manager capabilities is more critical than ever. Managers need the skills to communicate effectively, provide constructive feedback and drive a culture of accountability and support.
When there is good line-of-sight between business goals and employee objectives, the business impact of an effective performance management process can be profound. A well-executed program can better algin employee objectives to business goals, which leads to improved performance and productivity.
In economically challenging times, businesses need to ensure every resource is used efficiently. Having a performance management system that is in sync with corporate strategy as well as supports connection points between employees and their objectives can make all the difference.
Ultimately, the data you derive from your performance management process can help you adjust performance metrics, drive strategic initiatives, and support resilience and adaptability in an ever-changing market.
Recognizing the growing importance of performance management in this landscape, in September 2025 we will be hosting a series of virtual focus groups to delve into performance management design and pay for performance.
Participants will have the opportunity to explore how organizations are adapting performance management frameworks to respond to present challenges as well as future opportunities. By engaging in these conversations, attendees will gain valuable perspectives and strategies to enhance their performance management design.
Foundational themes
Emerging themes
If you are interested in participating in one (or both!) of our complimentary performance management or pay-for-performance virtual focus groups, register your interest here
