How to revamp your performance management process in 2025

Performance management has come a long way over the years. The processes, tools and best practice have evolved as we’ve developed our understanding of employee motivation and performance. 

Back in the day, performance management would have consisted of formal, awkward once-a-year appraisals. Thankfully, the performance management process in 2025 is far more dynamic, data-driven and employee-focused. To truly make an impact on your organisation and to keep your employees engaged, it’s important to keep up-to-date, ensuring your performance management process is continuous, relevant and insightful.

It’s also important to keep in mind that changes within our processes are about more than just introducing new tools or technology. It’s about creating an environment where employee performance is nurtured through ongoing conversations, transparent feedback and data-driven insights. 

Let’s explore how you can revamp your performance management process to meet the demands of 2025, while incorporating employee listening and employee surveys as a key component.

Related: Check out our 2025 employee engagement trends

Why the performance management process needs to evolve

For a long time, and for many organisations, the performance management process has been static, focused on annual reviews, rankings (including the infamous and ill-advised ‘rank and yank’ ranking systems) and scorecards. While these methods have been used for decades, they can feel outdated and disconnected from the realities of day-to-day work life at best, and damaging at worst. After all, our goal is to motivate great performance — not to intimidate and frustrate our people.

In 2025, it’s not enough to simply assess performance at the end of the year. With the rise of flexible working, understanding of the increasing importance of employee wellbeing and changing expectations around feedback and career development, organisations need a performance management process that’s more agile and reflective of these shifts.

We know that the majority of organisations plan to move away from traditional performance reviews in favour of more frequent feedback cycles and development-focused approaches. This illustrates the growing consensus that performance management should be something that evolves over time, providing value to both the organisation and its employees.

Building employee listening into performance management

One of the key changes in the modern performance management process is integrating employee listening into the fold. By actively seeking feedback from employees about their needs, experiences and goals, organisations can not only improve their performance management process but also seriously improve levels of engagement, wellbeing and employee retention.

Employee listening (which involves regularly gathering insights from employees through surveys, feedback tools or direct conversations) allows organisations to more completely understand the challenges their employees face and the support they require. This feedback can then be incorporated into performance management, allowing for more tailored development plans and more meaningful feedback.

How to revamp your performance management process for 2025

To successfully revamp your performance management process this year, you’ll need to create a system that’s ongoing, feedback-rich and aligned with both organisational and employee goals. 

Below are 12 key steps to help you improve and modernise your performance management process:

1. Shift to continuous feedback: Move away from annual reviews and introduce regular check-ins — something you might know as continuous performance management. Frequent feedback encourages employees to improve consistently rather than waiting for a yearly review.

2. Set clear, personalised goals: Use performance data to establish clear, measurable and realistic goals for each employee. These should align with both the employee’s professional growth and the organisation’s objectives.

3. Incorporate employee feedback into reviews: Ask employees for feedback on their development and work environment, integrating it into the performance review. This makes the process two-way and helps managers to hear the employee voice.

4. Leverage technology for performance tracking: Adopt performance management software that provides real-time data on employee progress. This ensures performance is tracked consistently, and insights can be accessed whenever needed.

5. Focus on development, not just evaluation: Our benchmark data shows that 43% of employees don’t feel their career development aspirations are being met at their current company. What’s more, 28% say they don’t have the training and development they need to actually do their jobs. Clearly, something needs to change — take this opportunity to transform performance management into a development tool, where feedback is centred on helping employees improve and grow rather than simply evaluating past performance.

6. Use data to personalise feedback: Collect data from employee surveys, peer reviews and performance metrics to create a full picture of an employee’s strengths and areas for improvement.

7. Ensure alignment with business strategy: Performance goals should align with the overall strategy of the organisation. This creates a sense of purpose and ensures that individual efforts contribute to the broader business objectives.

8. Implement 360 degree feedback: Gather feedback from multiple sources — managers, colleagues and employees themselves through 360 feedback. This well-rounded approach provides a more accurate and comprehensive view of an employee’s performance.

9. Encourage employee self-assessments: Allow employees to reflect on their own performance, providing a starting point for discussion. Self-reflection encourages personal responsibility and a more open dialogue during reviews.

10. Focus on wellbeing and support: Ensure that employee wellbeing is a core component of performance discussions. Supporting an employee’s physical and mental health can significantly impact their work performance and motivation.

11. Recognise and celebrate achievements: Our data shows that 39% of employees haven’t received thanks or praise for their work in the past week — which is a real missed opportunity to boost morale and motivation. Regularly celebrate both big and small wins. This recognition boosts morale, creates a positive organisational culture and motivates employees to maintain high levels of performance.

12. Discuss long-term goals for career growth: Most employees, when asked, will have an idea of where they want to be in five years’ time. They know how they want to progress, they know what they want to be earning and they know what training will give them a real edge. Engaging in these discussions shows your employees that you are invested in them, that you care about their future at your company — this can go a long way in creating a feeling of loyalty. Take the time to have discussions about long-term career aspirations and lay out a game plan on how they can get there. Let them know exactly what they need to do in order to obtain a certain advancement, for example, and then give them a reasonable time frame. Be careful not to make any promises you can’t deliver on — if you can’t give your promising, ambitious employee what they need from their career, it’s best to come clean, rather than misleading them.

Tying employee listening to performance management

Incorporating employee listening into your performance management process isn’t only about asking for feedback — it’s about acting on it. When employees feel that their opinions matter and are used to shape the performance management process, they are more likely to be engaged and invested in their roles.

For example, if employees consistently express a need for more development opportunities or more transparent feedback, take action to address these concerns within your performance management process. This could mean introducing more regular coaching sessions or ensuring that feedback is given in real-time rather than waiting for formal reviews. It all starts with opening the discussion and finding out what really matters to your people.

Revamping your performance management process is an opportunity to create a more engaged, motivated and high-performing workforce. By moving away from outdated models and embracing continuous feedback, personalised development plans and employee listening, organisations can not only improve employee performance but also boost satisfaction, retention and overall organisational success.

Performance management relies on dedicated leaders. If you want to be all you can be so you can give your team what they need to perform and do better, consider getting in touch to enquire about 360 feedback. The more aware you are of your leadership style, the better able you are to advance. Contact us today to see how we can help you.