What performance management looks like in 2024

The way we organise teams in 2024 looks very different from a decade ago. As a result, the way we manage the performance of those teams – and the individuals within them – needs to adapt too.
We look at the key elements of today’s business and HR landscape and analyse how they impact performance management for your organisation.

1. Understand we’re in a different economic environment

It has been an interesting ride for the economy over the past few years. In 2020, when the pandemic first hit, several sectors – especially face-to-face retail and hospitality – were severely impacted. However, others, such as professional services, tech and financial services, didn’t seem to miss a beat.

In fact, what followed was a boom for these industries, where revenue grew (often aided by government-funded subsidies), wages rapidly climbed and a war for talent began to rage.

Many employers took the view that they needed to do what they could to retain talent. For some, this meant allowing employees more latitude when it came to how and when their work was completed. For others, it meant letting a lot of things slide…

In 2024, the economic conditions look very different from a couple of years ago. Costs are being cut, budgets reined in and there often simply isn’t as much work available as there once was.

Against this backdrop, power has shifted from employee to employer. But does that mean a return to pre-pandemic management styles? Not necessarily.

2. Figure out how you’ll incorporate flexible working

While economic conditions may have changed, many of the trends that the pandemic accelerated seem here to stay. Perhaps none of these was more profound than the shift to remote working. Although this happened first out of necessity – with lockdowns and social distancing compelling people to stay out of the office – it has now become standard for people to work from home, at least some of the time. And this has profound repercussions for the way we need to manage staff for high performance.

Each business owner and manager really needs to analyse which model suits their business and its culture best. Some may decide this means a full return to the office; others may decide it means allowing employees to never come into the office at all. Most are likely to find, however, that it has already led to a combination of the two, where employees have some onsite days and some days where they can choose to work from home.

3. Get structure right

Managing performance with remote employees introduces new challenges, as many businesses have found over the past few years. However, I’ve almost universally found that many of these can be overcome through structure.

That means scheduling regular one-on-one, team and even organisation-wide catchups, and making these a non-negotiable, no matter where employees are working from.

That doesn’t necessarily mean having all employees attend the office – a lot can be done via Zoom or Teams – but it does mean checking in and monitoring productivity for all staff. That said, I’d always encourage managers to have any difficult conversations face-to-face where possible.

4. Focus on results

While structure is vital, one thing that has really changed over the past few years is a shift in focus from how and where work gets done to the results. For the best workplaces, productivity and output have replaced long hours and presenteeism as the
measure of success.

This means performance management in 2024 is not about time spent at a desk, but at the quality of work that’s being produced.

So rather than emphasising working hours, set clear, measurable goals and hold employees accountable for delivering results, regardless of their work environment.

When you do, establish clear performance metrics that align with your business objectives. Communicate these expectations transparently to your team and make these the focus of everything you do.

5. Think coaching and mentoring, not review

As long ago as 2018, we asked whether performance reviews were dead or just evolving. I think we can now say for sure that the traditional performance review has had its day.

Instead of the traditional annual performance review – which was essentially a big reveal to an employee on how they were tracking – the best businesses in 2024 have built constant feedback into everything they do. This means the focus has shifted away from once-off meetings to ongoing coaching and mentoring, where employees are empowered to make mistakes, take risks and ask constant questions.

The result is that employees and employers are more open and honest, but also more closely aligned. There is no need to use the review as a mechanism for taking corrective action, because small issues are dealt with in a collaborative environment as and when they happen.

6. Show employees you care with feedback

More than ever, employees who leave their jobs do so because they feel undervalued. To avoid this happening, employers shouldn’t just manage employee performance – they should also make sure they’re getting things right from their end too.

The best way to do this is through constant feedback on the company and the team. This should be formal – through regular employee questionnaires – and informal, through an ‘open door’ management policy.

You should also be quick to pass on any feedback to employees or management to make sure any small issues don’t become big ones.

7. Linking performance with pay

In 2024, effective performance management also means rethinking how you reward and incentivize your employees. After all, while employees value factors such as culture and autonomy, for most people money still motivates.

With this in mind, the more you can link your employees’ pay with the productivity and performance, the more likely you are to have engaged employees. This should generally include setting personal, team and even company performance objectives and linking bonuses, equity programs or profit sharing to them.

In short, the more your employees’ objectives align with the organisation’s, the less likely you are to face performance management issues.

That said, you’ll need to work out how to do this while still fostering a collaborative and harmonious culture that values all contributions.

In short…

Performance management in 2024 looks a lot different than it did a decade ago. Instead of focusing on performance reviews, it involves a holistic, nuanced and less authoritarian approach to managing staff.

Want more?

If you’d like to learn more about how to transform your organisation’s approach to performance management get in touch.