Reflect on your high school experience—your final grade was not determined solely by the final exam. Instead, it was shaped by a series of assessments, weekly quizzes, mid-term evaluations, and self-reflection assignments, all designed to keep your learning progress on track. This continuous approach to learning was not just about evaluation; it also emphasized growth and development, ensuring a deeper understanding and steady progress.
Now, compare this to traditional corporate performance management. For years, organizations operated within strict hierarchical structures, relying on periodic evaluations to assess their performance against predefined objectives. Originally designed to enhance efficiency, these evaluations frequently deteriorated into mere compliance exercises—routine procedures that prioritized checking boxes over promoting significant employee growth. The underlying belief that adults are solely responsible for their own growth creates a fundamental contradiction: expecting high performance while offering minimal real-time support to enable it.
As Peter Drucker famously stated, “What gets measured gets improved.” Yet, in many companies, measurement is infrequent and disconnected from day-to-day progress, making meaningful improvement difficult. Continuous performance management (CPM) presents a compelling alternative by integrating ongoing dialog, real-time feedback, and agile goal-setting. This employee-centric approach shifts the focus to continuous development, ensuring that employees receive timely support and recognition.
The rising popularity of CPM stems from a growing recognition that traditional approaches often miss opportunities for employee development as their inherently retrospective nature fails to provide timely and meaningful feedback. Historically, performance evaluations were structured around rigid industrial-era hierarchies and productivity. This approach assumes that employee motivation is driven purely by external factors such as promotions and wages.
As work environments became more complex and competitive, there was a stronger emphasis on employee agency. Frederick Herzberg’s two-factor theory highlights the role of workers’ motivation—e.g., recognition, accountability, and growth opportunities—in driving employee performance. Furthermore, a shift toward knowledge-driven business models has prompted organizations to be more proactive in talent development to maintain their competitiveness.
Thought leaders like Dave Ulrich have championed agile HR practices that integrate talent development with business strategy, focusing on continuous feedback and employee engagement to enhance individual and organizational success. This shift gained further momentum in the early 2000s when pioneering companies like Adobe abandoned traditional performance ratings in favor of frequent check-ins, real-time feedback, and goal alignment. Technological advancements that facilitate performance tracking notably drove the transformation. This shift underscores the importance of fostering an environment where growth and communication are embedded in the organizational culture while ensuring simultaneous employee and business growth.
What Sparks Progress?
Components such as real-time feedback and coaching allow employees to adjust their performance proactively, fostering a culture of receiving feedback. At the same time, managers can quickly identify areas needing improvement and offer additional training or coaching before minor issues escalate into significant setbacks or bottlenecks.
Frequent developmental conversations further enhance communication between employees and managers. These discussions go beyond performance evaluations, focusing on aligning expectations and personal development goals. Employees are given greater autonomy in setting their developmental objectives while ensuring alignment with the organization’s overall strategy. This sense of ownership increases engagement, motivation, and accountability.
Clear communication and trust between employees and management are reinforced by agile goal-setting practices that align individual performance with organizational objectives. Through regular check-ins, employees gain a precise understanding of their targets, reducing uncertainty and anxiety about expectations. This enables employees to clearly see how the organization’s goals support their personal career growth, enhancing intrinsic motivation, job satisfaction, and accountability.
Another key feature is transparency through a holistic 360 feedback cycle that incorporates input from peers, managers, and self-assessments. This multi-source feedback approach enhances fairness and objectivity, giving employees a well-rounded perspective on their strengths and areas for improvement. Receiving constructive feedback from peers—who they often spend significant time collaborating with—further enriches the evaluation process.
Technology has also played a crucial role in the adoption of CPM. AI-powered tools can analyze vast amounts of data from employee interactions, project management platforms, and customer feedback, offering real-time performance insights. These technologies help minimize biases in performance reviews by ensuring fairness and accuracy. Additionally, cloud-based platforms and mobile applications streamline the feedback process, making it more accessible and efficient.
Making CPM Work
Transitioning to CPM can be daunting, requiring the organization to take a deliberate and strategic approach to ensure alignment with its needs, culture, operations, and even the industry’s regulatory standards. It should begin with an honest evaluation of the current PMS by top management. The organization’s current performance culture, the adequacy of coaching interactions, and the effectiveness of the current feedback and evaluation system should be assessed to determine if they can provide the expected business improvements. Furthermore, the success of this transition also hinges on overcoming key challenges, including leadership buy-in, managerial engagement, and industry-specific constraints.
Securing buy-in from top management is critical. Leaders accustomed to annual reviews may hesitate to adopt CPM due to concerns over increased workloads, employee resistance, and the challenge of tracking frequent check-ins. However, demonstrating the benefits, such as improved engagement, motivation, and overall performance, can help address these concerns. It is also important to emphasize that, in practice, regular check-ins require more effort than the often cumbersome annual appraisal process, which makes performance management more actionable.
To ensure consistency and accountability, organizations should establish a minimum check-in frequency (e.g., monthly) and develop standardized, centralized meeting templates. These templates should guide discussions on key topics such as company goals, employee development, and career growth. Standardization is crucial, as managers often juggle multiple responsibilities, which makes it challenging to sustain active participation. Without a clear structure, check-ins risk becoming a routine administrative task rather than a valuable tool for growth. A well-defined framework not only ensures discussions remain accessible throughout an employee’s tenure but also alleviates the burden on managers by providing a clear, consistent approach to best practices.
Human resources (HR) also plays a crucial role in this process by equipping managers with the necessary training, streamlining processes, and embedding CPM into daily workflows rather than treating it as an additional administrative task. This training should support the practice of referencing past check-in conversations during annual performance reviews to mitigate recency bias and objectively reflect an employee’s entire performance from the period, creating a more balanced and effective PMS.
Industry-specific constraints also affect CPM implementation. Highly regulated sectors may require formal documentation, making a full transition to CPM difficult. On the other hand, project-driven industries such as the technology and creative fields may find CPM more naturally aligned with their fast-paced workflows. Organizations should acknowledge that CPM is not universally applicable and tailor its strategies to their unique operational requirements. Organizations could position CPM as a complementary tool, providing real-time insights and maintaining regulatory compliance through the integration of structured documentation and continuous feedback mechanisms.
DBS Bank demonstrates successful CPM integration by blending traditional performance management with an agile, feedback-driven culture. Their Culture by Design process reinforces an agile culture and a learning organization by providing immediate feedback to their 27,000 employees. The MOJO meeting initiative, for example, ensures meetings have a clear agenda and facilitates immediate feedback on whether organized meetings are successful based on predetermined criteria. To support its digital transformation objectives, the company is also actively utilizing a mobile learning platform to enhance employees’ digital competencies in various categories. At the end of the course, qualified employees are granted the opportunity to teach their coworkers, giving them a sense of purpose.
CPM is more than a systemic shift; it is a cultural transformation that redefines how organizations nurture talent and drive performance. By fostering real-time feedback and continuous development, it promotes a dynamic environment where employees can grow and contribute meaningfully. However, for CPM to succeed, organizations must recognize that its effectiveness hinges not just on tools and processes but also on leadership commitment and cultural alignment. HR plays a critical role in ensuring that CPM is not just another corporate initiative but an embedded practice that enhances engagement, accountability, and growth by championing its integration into the organization’s fabric and guiding employees from a compliance-driven mindset to a meaningful process that fuels both personal and organizational success.
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Editor’s Note: This article was originally published in Performance Magazine Issue No. 32, 2025 – Employee Performance Edition.
A performance management system enables an organization to monitor and, if needed, improve its performance. Without one, the organization is essentially missing a foundational pillar, one that is crucial to its success and longevity.
Find out how to implement a performance management system by watching The KPI Institute’s Andrea Minelli as he goes over each step in detail.
The execution of a strategy hinges upon proper performance evaluation. Predicting future internal and external conditions, tracking performance compared to goals, and making wise decisions all depend on an understanding of and identification with management strategy.Thus, companies that employ strategic decision-making have to review and improve their performance measurement practices to guarantee the effectiveness of their policies.
In the Middle East and North Africa (MENA) region—an area defined by diverse landscapes, cultures, and economies—performance measurement practices have evolved considerably. The region has undergone significant transformations in recent years, driven by economic diversification, geopolitical developments, and rapid technological advancements. These dynamics have aggravated the need for effective strategic performance measurements that are both adaptable and able to produce quantifiable results in fast-changing surroundings.
According to theState of Strategy Management Practice Report2024 published by the KPI Institute (TKI), insights from over 90 organizations across MENA reveal trends and strategies for building smarter performance measurement systems. This annual report includes data, expert insights, and advice from leaders in top organizations, offering a comprehensive overview of current best practices in the region.
Companies in the MENA region have adopted more flexible methodologies like OKRs alongside tried-and-tested frameworks like the balanced scorecard (BSC). The BSC is still rather popular, but the adoption of OKRs jumped to 34% in 2024 from 20% in 2023. This change represents an increasing demand for adaptability and short-term goal-setting, which helps businesses solve current problems while maintaining alignment with long-term objectives. Hybrid systems were developed by about26% of firms in 2024, indicating a trend toward more flexible performance evaluation practices.
The fact that 57% of companies were already using key performance indicators (KPIs) in 2024 to evaluate staff performance shows a trend toward metrics that focus on the workers. A balanced emphasis on operational efficiency and strategic results is shown by how companies in the MENA region follow practices such as operational and process monitoring (51%), followed closely by corporate performance evaluation (48%).
However, it is also worth noting that the report found that the capability to select relevant KPIs has dropped from 3.4 in 2023 to 3.2 in 2024 (on a scale of 1 to 5), showing a declining ability to find metrics that are linked with strategic objectives. Furthermore, a 5% reduction in KPI relevance to a modest level of 3.1 indicates a widening gap between KPIs and actual organizational performance.
Challenges and Recommendations in Performance Measurement
The report highlights that selecting and aligning KPIs remains the top challenge for organizations. The process is further complicated by the fact that only 28% of organizations in the MENA region utilize dedicated KPI management tools, resulting in inconsistent data collection and sluggish decision-making.
If MENA businesses are to rise above these challenges, TKI recommends using business transformation KPIs to allow companies to enhance performance evaluation considerably. These KPIs track more general organizational changes, including behavioral changes, return on investment (ROI), and staff acceptance rates, rather than conventional measurements, providing a better view of the course of transformation projects. Tracking the percentage of employees actively involved in scheduled adjustments, for instance, helps one understand the workforce’s commitment to the strategic goal.
Another important transformation KPI is performance management maturity. By assessing how well the organization alters its performance management systems over time, this metric provides a baseline for ongoing improvement and illustrates a holistic picture of the business’s transformation route. Such a KPI can be generated as an index through a comprehensive performance audit.
Many companies realize that performance evaluation mostly depends on identifying one statistic to guide decisions. True success in measurement, however, depends onstructure and clarity, which are needed to support decisions that reflect the company’s strategic goals at all levels.
Recognizing the unique challenges in the MENA region, the GPA Unit—a division of TKI that specializes in strategy and performance audits—has developed a comprehensive toolkit dubbed Performance Measurement Maturity Model Framework V1.0, which is designed to address essential areas of performance measurement. This framework empowers organizations to tackle common KPI challenges, providing a structured pathway toward maturity in KPI management. By focusing on core areas—KPI selection, documentation, target setting, data gathering and visualization, and robust governance—this framework guides organizations from basic practices to a mature, data-driven approach.
In the last few years, The KPI Institute (TKI) has supported several organizations with the implementation of a hybrid performance management system (PMS), namely a hybrid between a KPI-based framework and OKRs. This is especially useful for entities that want to benefit from a more agile approach to performance management while still retaining part of the control offered by a more stable framework, such as the Balanced Scorecard (BSC). A hybrid methodology was also seen as an option by organizations that were already using a PMS but were not willing to undergo a complete framework change.
The majority of clients that chose this solution as opposed to solely deploying OKRs were already working with a BSC and had prior knowledge of KPIs and the field of performance in general but felt the need to update their framework and incorporate the latest developments from the field into their practices.
Most of our clients that implemented a hybrid solution were facing challenges, mostly at the operational and individual levels. Due to a fast-changing environment, their operations had to learn to adjust with a higher frequency; therefore, a system that encourages such changes and operates within a shorter timeframe became more desirable.
At the individual level, the increasing percentage of millennials and Gen-Z in the workplace made it a necessity to deploy a value-based PMS that not only relies on committed results and business as usual but takes into account employees’ ambitions as well as actively includes them in the setting process of all objectives and results.
Solution
The solution we proposed and the integration of the two systems are usually highly dependent on the specific needs of the client as well as their organizational structure, external stakeholders—especially in the case of governmental entities—or environmental requirements.
The usual stages of a hybrid PMS deployment are as follows, but these are subject to change depending on each project’s specifics:
Needs analysis
Design and documentation of the hybrid PMS at all levels
Education of all stakeholders on the hybrid PMS
Implementation
Reinforcement through communication campaigns or review meetings, among others
A project as described above for a medium-sized organization of around 100-150 employees—if the individual level is included in the project—can take up to one year.
Key Success Factors
The key success factors of implementing any hybrid system are, first and foremost, its compatibility with the organization’s scenario, followed by top management sponsorship, and employees’ openness to learning and operating with two philosophies merged into one.
The hybrid solution that we recommend is easier to use and more versatile; therefore, it can work for most organizations. It is compatible with the BSC on the corporate level, where stability and committed, longer-term objectives are needed, followed by OKRs on the operational levels, where agility is mostly needed. However, this must be customized depending on the organization’s needs and aims.
Alignment
Ensuring alignment between different organizational levels while using a hybrid PMS relies almost exclusively on effective communication between the representatives of those levels. This ensures that by the time the lower level needs to set their performance components, they fully understand what needs to be achieved at the higher level and what their contribution looks like, equipping them for the alignment process.
Response
In most cases, employees are slightly reluctant to accept a hybrid system during the first phase, especially since it is, by default, more complicated than working with only one framework. However, after intensive training and discussions, most of our clients’ employees embraced the idea of a hybrid system and can see the benefits it brings them, such as people-centricity, flexibility, and measuring their value-add or the simple fact that they can be involved and listened to when setting the system’s components.
About the Guest Expert: Alina Miertoiu is a Senior Management Consultant at The KPI Institute. She facilitates on-site and off-site consultancy on OKRs and BSC frameworks in various industries and conducts training courses on OKRs, KPIs, Performance Management, and Benchmarking. She is a PhD candidate in the field of OKRs and Performance Management at Babes-Bolyai University.
Editor’s Note: This was originally published in Performance Magazine Issue No. 28, 2024 – Employee Performance Edition.
Does your organization adopt an employee or customer-centric operating methodology? For decades, the main focus of businesses in the Middle East has been on the customer, embracing mottos such as “The customer is always right” or “Customer comes first,” with the primary objective of attaining high customer satisfaction to expand market share. While this remains a universal goal, the approach to achieving it varies among companies, with some prioritizing employees over customers.
Employee performance management has gained increased attention in recent years compared to previous decades. This shift is largely a result of a changing mindset in both the private and public sectors regarding core business principles and operating methodologies. Companies have started to be more aware that what leads to customer satisfaction is a happy workforce, prompting them to focus more on managing employee performance.
Business magnate Richard Branson encapsulates this shift with his statement: “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.” This shows us the importance of transitioning towards a more employee-centric business model to keep employees satisfied and engaged while achieving business goals. For all these reasons, employee performance management plays a pivotal role.
To better understand what employee performance management entails, it is important to examine its sub-processes:
Employee performance planning: The planning phase is a prerequisite, establishing the groundwork for the entire process. It is imperative to clarify roles, responsibilities and competencies by having the proper job descriptions and competencies framework developed based on the market’s best practices.
Employee performance measurement: This phase teaches the creation of scorecards at the employee level, guiding the assessment of competencies and behaviors. It also delves into the advantages and disadvantages of creating a final performance index for each employee, incorporating clearly defined criteria such as objectives, KPIs, competencies, and behaviors.
Employee performance review: This phase details organizing and conducting employee performance review meetings, ensuring value for managers and employees. During meetings, managers transparently discuss employee performance, acknowledge achievements and progress, and highlight improvement areas.
Employee performance improvement(talent management): This phase emphasizes the right course of action after the performance review meeting and the enablers of performance improvement. It guides the addressing of low-, medium-, and high-performing staff members, underscoring the importance of a monitoring process to ensure the effective implementation of corrective actions.
Performance recognition: This process guides the creation of rewarding models for acknowledging high-performing individuals and teams, enabling the design of a sustainable reward system encompassing financial and non-financial rewards.
In 2023, several aspects of performance management, especially employee performance management, have evolved. This shift is a response to the so-called “post-pandemic new normal,” forcing businesses to rethink survival strategies for 2024 and beyond. Six main trends have emerged:
A noteworthy change is the evolution of the job landscape. Financial security, which once deterred employees from leaving their jobs, is no longer the sole factor. Jobs now offer employees opportunities for growth, continuous feedback, flexible working hours, remote or hybrid work options, and comprehensive benefits, enhancing their work-life balance. These trends underscore the imperative for businesses to shift towards employee-centricity to achieve strategic objectives and foster sustainable business practices with reduced turnover.
Employee performance management will witness further changes, particularly in performance review and goal-setting. The workplace will increasingly focus on personal and professional goals, transforming performance reviews from a process into project-based evaluations, enhancing the workspace and contributing to a more sustainable business.
To prepare you for the year ahead, The KPI Institute can equip you with the industry-leading tools and skills required to nurture employee performance. Sign up for the Certified Employee Performance Management Professional and Practitioner courses now and secure your slot here.
