For many companies, “performance management” still takes the form of annual reviews. This is a problem because, despite huge investments in time, energy and capital, research has shown that for most organizations this antiquated process fails to yield any clear improvements in employee performance. According to Gallup:

  • 47%  of employees receive feedback only a few times a year, or less
  • Just 23% of employees agree the feedback they do receive is valuable
  • Only 14% of employees agree their performance reviews help them to improve

When your employees don’t have a clear idea of what’s important or how to improve their skills,  companies struggle to meet targets. This can lead to a disengaged workforce, which cost American corporations $550 billion each year. Fortunately, there is a better way.

Highly effective Continuous Performance Management™ programs can truly motivate your workforce through aligning employee’s work with your organization’s highest priorities, continuously providing the personalized coaching they need for growth, and helping to recognize, reward and retain top performing talent.

At its core, Continuous Performance Management is all about building and nurturing a motivated workforce. Fostering a motivated workforce is one of the single most important things any organization should focus on. Motivated workers focus on what matters (to the company and to them), are agile and aligned around key strategic objectives, and achieve today’s goals while also developing themselves to meet tomorrow’s challenges. For employees, there are four “Drivers of Motivation:”

  • Their manager is actively engaged in their success
  • Their manager cares about their professional development
  • They see how their work contributes to the bigger picture
  • Their impact is recognized and rewarded

A well-designed Continuous Performance Management process, backed up by robust technology designed to support it, addresses each of these “Motivation Drivers.” But transitioning any organization to this methodology doesn’t happen overnight. Every company is different, and so the process you put in place should reflect that and be uniquely tailored to your business’ needs. This will take time but the rewards can be huge, according to McKinsey organizations are three times more likely to outperform the competition if they have an effective performance management system.

I recently sat down with the Human Capital Institute for a webinar where I discussed how to get how to get a Continuous Performance Management process up and running, and what is needed to upgrade your current program.  

This article originally appeared on HCI.org