Discover the big disconnects in performance management today in the 2024 State of Performance Enablement report.

Josh Bersin: Performance Management is Heating Up

By Betterworks
2 minute read
Updated on April 23, 2022
Josh Bersin Performance Management is Heating Up

There’s a sea change happening around employee performance management.

HR and business leaders are realizing that the old model of annual performance reviews is ineffective for today’s workforce, with nearly 90% of HR professionals agreeing that a Continuous Performance Management® model is superior to an annual or bi-annual review process.

This is a reflection of the changing nature of the workplace in general. Hierarchical business models are rapidly being replaced with more flexible, adaptable and agile cross-functional teams whose work is powered by conversations that take place up, down and across the organization. And when it comes to managing these types of teams, processes that are rooted in continuous conversations, agile and transparent goals, and culture-based models for coaching and career development are vastly more effective.

In short, more and more companies are recognizing that Continuous Performance Management works. But in order to operationalize it, you need robust processes in place, supported by technology that can bring all of these elements together and facilitate these processes throughout complex organizations.

“None of these tools works without a plan; you can’t just ‘turn them on’ and expect everyone to suddenly have better performance,” said Josh Bersin, world-known HR industry analyst and founder of Bersin by Deloitte. “So you do have to design a process people understand. But with the right amount of HR strategy and consulting they offer a transformational change.”

According to McKinsey, organizations are three times more likely to outperform the competition if they have an effective performance management (PM) system. But while many large Enterprise Planning companies such as SuccessFactors, Workday and Oracle all have performance management solutions, these remain largely designed around year-end reviews rather than continuous performance management models. This has opened the floodgates for smaller, more nimble organizations, and the market for Continuous Performance Management platforms and solutions is rapidly heating up.

“There are dozens of very innovative startups companies, including vendors like BetterWorks, Reflektiv, HighGround, Glint, Lattice, Impraise, Standout, Zugata, 15Five, 7Geese, and more,” said Bersin. “And while the ERP players certainly want to succeed in this space, most are happy to partner with these vendors if it makes their core platform more competitive.”

The increasing levels of investment into Continuous Performance Management software is further validation of the product-market fit of this technology and methodology.’s report “Moving Towards Continuous Performance Management,” identifies the top priorities for human resources departments as improving employee performance, boosting staff retention and finding the next generation of high performers and leaders. Continuous Performance Management helps with all of of these aims by making employees more likely to meet goals and stay engaged, while providing the business with critical workforce insights.

“These integrated tools are really a new market and one that will grow very fast,” said Bersin. “I believe we are in the early days of a wholesale replacement of traditional talent management software, and these small vendors are inventing what’s coming next.”