What is performance development?

Performance development is a continuous and structured process aiming to enhance an individual's skills, knowledge, and overall work performance. It is a proactive, growth-focused strategy for improving employee effectiveness rather than focusing on past performance.

What is the difference between performance management and performance development?

The terms performance management and performance development are often used interchangeably. Still, there are some important differences when comparing the two.

The performance development definition focuses more on planning and looks to the future. Performance management, on the other hand, is retrospective.

Performance management concerns itself more with making the most of a workforce's current capabilities rather than nurturing the growth of individual employees. Performance management relies heavily on evaluation, using assessment and performance reviews to measure employee skill and productivity.

That data is then used to manage employees, often like parts in a machine (the machine being the organization as a whole). While not mutually exclusive, performance management sometimes limits itself by viewing individual employees as a static data set rather than dynamic workers with the potential to improve.

Performance management is to checkers, as performance development is to chess. In the latter, much more attention must be given to each piece's differing values and unique possibilities.

What are the key components of a performance development?

There is no universal solution to performance development as each industry, company, and position faces unique responsibilities and challenges. However, most processes to develop performance include these five components.

Performance reviews

Whether you manage or develop employee performance, an appraisal is necessary to understand each scenario accurately. Performance development reviews should cover specific topics that may be above and beyond a basic employee review. Specifically, you must identify growth opportunities.

Unlocking an employee's potential is the primary goal of performance development, and reviews are a great time to identify areas for improvement. Again, these areas will vary depending on the company and role. Still, you are trying to gauge an employee's skill ceiling, not simply their past performance.

Continuous feedback

Developing employee performance is not something that happens overnight or after one meeting. You must offer constant and consistent support to nurture an individual's growth.

Continuous employee feedback ensures that your subject is on track and has everything they need to reach their performance and development goals. This generally requires 1:1 meetings, regular check-ins, and real-time progress monitoring.

Continuous performance development requires long-term support from management. Learn about the importance of coaching skills and feedback training for managers.

Goal setting

A crucial part of the performance review and feedback interactions is setting and working toward goals. This isn't just assigning ambiguous performance benchmarks or productivity quotas. It should be a two-way conversation, marrying the employee's career goals with the company's best interests.

A shrewd people operations manager can create performance development plans that motivate employees with personal growth opportunities while simultaneously improving their contributions to the organization. It is truly a win-win situation.

Complementary guides: Learn more abour the SMART goals framework and consult these SMART goals examples.

Competence development

After the analysis and strategizing are complete, you are ready to put your plan into action. The "how" of performance development separates good HR and training from middling results.

A skill gap analysis can help you identify which areas to focus on, giving you obstacles to overcome so the subject can reach the next level of professional development. This, once again, depends on the individual and their current role.

Training, mentorship, and open-ended problem-solving are all strong possibilities for developing the competencies an employee needs to advance.

Motivation and engagement

Effective upskilling in the modern workplace requires more than just training material. Motivating employees on their performance development is vital to long-term success.

Incorporating career pathing into a performance development plan certainly provides incentives, but maintaining strong engagement is the major challenge for many leaders and people operations pros.

There are countless strategies for employee engagement, such as:

• Social learning
• Gamification
• Recognition
• Tangible rewards
• Promotions

Employing appropriate incentives will motivate workers and further improve ROI from their training and development.

How can organizations switch from traditional performance reviews to a development-focused system?

Relying exclusively on the traditional review process is one of the first bad habits companies need to drop if they want to stay on top. Here's why and how to transition to development-focused performance reviews.

Assess the current system

Just like with worker performance, you can't come up with a strategy if you don't understand your starting point accurately. Take a step back and objectively analyze your current process, with an eye toward any shortcomings or roadblocks that might hinder progress.

To gather objective feedback, poll employees, management, and HR to identify critical goals and pain points. You can create a list of likes/dislikes and wants/needs to build a framework for your new and improved system.

Start at the top

While everyone's feedback is valuable, your first focus should be senior management and team leads. Ensuring stakeholder buy-in and relying on the wisdom of company leaders will set you on a more reliable bearing.

That isn't to say, collaborate with management and ignore the primary performance development group. But you want to avoid formulating a plan that goes against the outlook or direction of those at the helm.

Offer training and education

At the core of any strategic employee development plan is training and education. The trick is finding and delivering this content in a feasible and engaging way. This requires everyone to be on the same page, understanding the new process, and giving leadership the tools they need to empower their teams.

Learning management systems and learning experience platforms are becoming the norm for modern companies embracing a learning culture.

These tools allow people operations to deliver effective, flexible, and personalized training on a scale that simply wasn't possible with traditional methods. Not only that, but microlearning, gamification, and social learning can drastically impact employee engagement and training results.

Establish clear objectives

A frequent problem with traditional performance reviews is insufficient communication and unclear expectations. Employees try their best to be good workers and do what they think they're supposed to do, but they don't always know exactly what that is.

Employees should be fully aware of the metrics they are being graded on and expectations in their roles. This is why it is important to include them in development conversations, not just assign generic target numbers.

Define what you want to achieve with development-focused reviews, such as skill growth and career advancement for the subject.

Take advantage of automation

You will need to leverage modern technology to modernize your performance development procedures.

Traditional performance management was often ineffective because it simply wasn't feasible to deliver personalized support on a large scale. The result was generic, blanket training seminars.

Pilot the new system

A major obstacle for many HR departments when reinventing extensive processes is feeling like they need a perfect system before they replace the old one. Not only will your performance development plan never be perfect, it will never even be complete.

As your workforce grows and improves, so too will the company. With a culture of learning established, hungry employees will need an endless supply of new content to fuel their upskilling, cross-skilling, and advancement within the company.

This may sound intimidating, but a company is a living, breathing thing, and your role will directly contribute to its growth. Don't be afraid to start slow, soft launch the new system, or stagger the rollout to specific groups at a time.

Over time, your process will expand to fill in the gaps and satisfy the needs of new projects as they emerge.

Collect feedback and iterate

One of the most efficient and effective ways to continue to refine the review process is by gathering feedback from those involved. This can happen during any step of the process, including at the end of reviews.

Use collected feedback to make improvements and additions whenever feasible. This not only takes away a lot of the guesswork but embraces the modern thinking that performance reviews are a team effort.

At this point, you can roll out your new process to the entire company and continue to fine-tune it with ample input.

How do you measure the success of a performance development system? Key metrics

It is easy to get engrossed in the data and theory behind performance development planning, losing sight of the real objective: building a more capable workforce.

Below are some metrics you can use to track progress and measure the overall effectiveness of your process.

Skill development and uptake

Upskilling is one of the most important and direct measures of performance development. The acquisition and application of new skills to improve employee performance is arguably the only metric that really matters. After all, how else can you develop performance?

To measure this, use your skill gap analysis to identify missing skills. As employees acquire these skills, note the timeframe and resources it took for that achievement. This data lets you easily show what skills were developed in any given period.

Time to competency

Time to competency is a measure of how long it takes for employees to become proficient in a skill set or role. This term is often used in reference to new hires but can apply to learning at any stage.

A valuable metric for tracking the effectiveness of a performance development system is how long it takes employees to learn. This isn't just how long it takes to learn new skills, as in the metric above. It can refer to new hires reaching target productivity or promotions conquering their new roles. Improving time to competency saves your organization time and money.

Performance goal achievement

A simple but meaningful measure of your system's success is the ratio and time in which workers are meeting the goals you set. If a high percentage is falling short of their goals, you may need to reassess your expectations or methods.

However, if everyone is achieving their goals, you may want to investigate whether those milestones should be set higher. It is also vital that employee performance goals have a measurable impact on your company's success.

Feedback frequency

While it may not be a direct indicator of the quality of your system, feedback frequency can be a telling data set for many other considerations. If upward or downward feedback is not occurring at recommended frequencies, it may indicate the cause of other performance issues.

360-degree feedback scores

As employees develop their skills, it makes them more capable team members. The result is often better feedback scores from peers and supervisors.

Analyzing 360-degree feedback trends can offer valuable insight into many aspects of your organization and individual employees, including their development.

Promotion rates

Promotions are one of the easiest goals to align during performance development. Employees are usually interested in advancing their positions. At the same time, the company benefits from a more capable worker taking on more responsibility.

An increase in promotions after instituting changes to your employee review and development system is a positive trend. Deserved promotions are a no-lose situation for workers and company development.

Employee satisfaction scores

As employees improve their skills and move up in their company, their satisfaction also tends to rise. This is especially true if company objectives are aligned with an individual's desired career path.

High employee satisfaction rates also suggest an absence of pain points in the current process, such as unclear goals, imposter syndrome, and a lack of appreciation, All of which can be solved with a good performance development planning process.

Employee retention and attrition

When people are more satisfied at work, employee retention increases. This is another win-win situation as workers are happier, and the management has to worry less about attrition and hiring.

Check out our guide on how to reduce employee attrition. We discuss 10+ strategies to retain your best people.

Improvements in communication

Under a system where everyone is on the same page and working toward the same key goals, communication naturally improves. Quantifying this isn't always easy, but there are metrics you can look at.

Including communication-related questions in 360-degree reviews is one example.

Another is the frequency of 1:1 meetings between supervisors and subordinates. These suggest trends in communication and social learning, which are to the benefit of everyone involved.

Foster talent development with Deel Engage

Deel Engage combines performance, learning opportunities, and career development into a central platform.

Here are the features you can use to power talent development in your organization:

1. Skills matrices and training needs assessment surveys help gauge individual learning interests and their skillsets
2. The performance management module facilitates regular feedback in your custom performance review cycles
3. The training module provides the resources your people need to grow from a library of external or internal content drafted by AI as required
4. The career management module enables you to create tailored development programs for each role and individual
5. Deel HR, our truly global HRIS solution, manages the entire talent lifecycle compliantly and is always included for free

With the help of automation software and AI, tools like Deel Engage can significantly improve the capabilities of human resources professionals. Personalized learning, career pathing, and progress monitoring can be managed on a massive scale in a fraction of the time.

Book a demo to see how our solutions will help you foster continuous improvement in your workforce.