Performance and performance management – it’s something every organization, be it a Fortune 500 or a non-profit or a public sector institution talks about. Odds are they talk about it a lot and despite all that talk it is still likely a topic that causes managers and leaders to want to pull out their hair and one that stirs feelings in employees ranging from dread to fear to mental eye-rolling. Some organizations tackle the challenging of reviewing and communicating performance via three-point scales or five-point or twenty-seven point; others embrace 360 degree reviews; some organizations have highly calibrated processes whereas others have “Oh, it’s that time of year again” approaches; then there are the organizations dropping the idea of formal performance appraisals in the goal of creating more dialogue and something better. The point: assessing, measuring and managing performance is complex and ever-evolving; but there are some core principles that regardless of where an organization falls on the spectrum of processes and approaches that hold true.

Performance Happens Every Day

Employees come to work every day, some do solid work and get done what they need to. Others may perform more marginally and there will inevitably be a contingent that builds a reputation for being “rockstars” or “role models” or “ninjas.” Every organization regardless of industry has employees doing good work and great work and work that falls somewhere on either side of that; they’re doing that work every day and every day serves as an opportunity to recognize the good and the bad, to praise and to coach. So whether your current system formally appraises employees annually or in some other fashion, remember that the role of leaders and managers goes beyond “addressing performance” but rests in keeping an ongoing “performance dialogue” going.

Great Performance Requires Clear Communication

As operational demands change and organizational strategies shift – it is important to make sure that the impact on performance expectations are made clear. From setting annual goals to clearly articulating key responsibilities to holding regular touchpoint and one-on-ones, the opportunity to ensure employees understand what is expected from them, how they are being measured, and the impact of those measurements on them, their team, and organization become more and more important. In making the leap from “meets expectations” to “exceeds expectations” there is as much onus of responsibility on the manager to be clear on what is required and expected – regularly, not just during an overly stuffy sit down once a year – as there is on the employee to meet those requirements and expectations (or to speak up when they are facing a hurdle in doing so). In this sense, communications becomes the two-way dialogue it is intended to be; leadership can better understand the nuanced challenges impacting employees across the organization, and employees understand how to rise to the level of “rockstar” or the like. Or as Jim Collins puts it in his book Good to Great, there is a difference between managing and leading, between telling and communicating: 

“The moment you feel the need to tightly manage someone, you’ve made a hiring mistake. The best people don’t need to be managed. Guided, taught, led–yes.”

High Performing Organizations Make Performance Investments

Recognizing that performance happens every day and that superior performance isn’t just a matter of an employee doing their job but also understanding what drives and defines performance in the organization are significant factors in facilitating performance and creating a performance culture, but then the question becomes, “what next?” In some organizations that may be intricate performance measurements layered over top of tools and forms and processes, in others it may be a matter of continuing the conversations that is already hopefully taking place – regardless, the acts of assessing, measuring, and managing performance should lead to a larger conversation about talent; where an organization is strong, where it has opportunities, and where it has the ability to create and mold talent on the cusp – this process as its most basic can look at employees as fitting into one of four categories (further illustrated in the tool/diagram below):

Invest – employees who are setting the paradigm, driving operational successes, impacting and informing strategy, those that see expectations and blow right on past them; these employees have a high level of actualized contribution to the organization with minimal to no distractionary consequence (negative impacts, distractions, derailments, etc.) to their colleagues, peers, projects, or teams. Dollars spent here, not just on salary and incentives but also on training, development, and talent fostering are almost guaranteed to create a strong return on investment for the organization and create stronger engagement with your best employees.

Assess – employees who make strong contributions but perhaps not always consistently, they may need help in seeing the big picture or understanding the impact of their work and contributions (let alone those of their colleagues and peers); these employees have a high level of actualized contribution to the organization with a middling to high level distractionary consequence to their colleagues, peers, projects, or teams. Dollars spent here are an investment in “what if,” this group of employees has the potential to become high performers but requires strong leaders, solid coaching, and often times greater organizational effort in order to achieve their best.

Push – employees who are middling or haven’t quite yet found their groove, they may show glimpses of high potentiality, or they may simply show up every day and do their job based on their understanding of the expectations upon them; these employees have a low to middling level of actualized contribution to the organization with a low to middling level distractionary consequence to their colleagues, peers, projects, or teams. Dollars spent here can be viewed as equal parts investment and analysis – the idea being to tap the full potential in this group or determine if perhaps this isn’t the right role or organization for them at this point in their career.

Exit – employees who aren’t meeting expectations, haven’t embraced the organizational culture, or more simply put are a bad fit for any number of reasons; these employees have a low level of actualized contribution to the organization with a high level distractionary consequence to their colleagues, peers, projects, or teams. Time rather than dollars should be spent here in helping this group understand their next steps, how to better utilize their unique set of KSAs with a future employer, and to prepare themselves to find the right role in the right organization that best meets their personal career value proposition.

A previous version of of this article originally appeared in TalentCulture as "Performance Management: Going Beyond the Appraisal"