It’s been five years since the COVID-19 pandemic began, and the workplace has changed significantly and rapidly. Shifting work patterns, new communication methods, and evolving employee expectations have made performance management more challenging; especially with the rise of hybrid and remote work.

Keeping teams productive and engaged requires the right strategies, tools, and a clear understanding of what works today. Below we’ll look at how performance management has evolved since the pandemic and highlight key takeaways to improve current processes.

 

What is Performance Management?

Before examining the pandemic’s impact, it’s essential to first define performance management. At its core, it is the continuous process of communicating and clarifying job responsibilities, performance expectations, and development goals. Its purpose is to optimise individual performance while aligning it with the organisation’s strategic objectives. Effective performance management ensures employees understand their roles, receive constructive feedback, and have the support necessary to achieve both personal and business goals.

A strong performance management strategy is built on three key elements:

  • Purpose: Defining a clear purpose helps shape a company’s approach to performance management. A well-structured strategy ensures consistency, making it easier for employees and managers to understand and apply.
  • People: Performance management revolves around people. Who is involved, how they participate, and why their input matters can determine whether employees and managers stay engaged and productive.
  • Process: The process ties everything together. It dictates how performance management operates throughout the year, from setting goals to conducting reviews.

The success of a company’s performance management approach depends not only on these three elements but also on two other factors:

  1. The existing performance management framework within the organisation.
  2. The overall company culture and how it supports feedback, growth, and accountability.

For newer companies or those experiencing rapid growth, particularly those with millennial and Gen Z employees who value regular feedback, overhauling outdated processes and implementing a dynamic, ongoing system may be the best approach. A modern and responsive performance management system can create a positive workplace culture, improving employee engagement and providing a solid foundation for long-term success.

While methods may vary, the ultimate goal remains the same: enabling employees to create meaningful value for the organisation while supporting their professional development.

 

The Shift to Remote and Hybrid Work

Before the COVID-19 pandemic, most office workers were expected to be on-site, with few exceptions. In 2019, only 4.7% of UK employees worked from home, a figure that surged to 46% at the height of the pandemic.

Having experienced remote working, many employees now want to maintain this flexibility. Companies that offer flexible working hours, remote work opportunities, and generous leave policies can improve employee retention and satisfaction. In fact, 89% of HR professionals reported higher employee retention after introducing a flexible work policy. By late 2024, 13% of UK workers were fully remote, while 27% followed a hybrid work model.

This shift has had a clear impact on performance management. Many performance reviews and feedback sessions now take place via phone, video call or email instead of face-to-face meetings. While still effective, managing performance in a remote or hybrid environment requires new approaches. Business leaders must adapt their performance management process to keep employees engaged, ensure productivity, and support talent management strategies.

 

The Impact on Productivity

A major concern for businesses and managers during the shift to remote working and hybrid work was its effect on productivity. However, research suggests that flexible working arrangements can maintain or even improve performance levels.

In the UK, 46% of employers believe remote working and hybrid work improve employee performance, up from 43% in 2021 (CIPD survey). A Stanford Business study also found that remote work led to a 13% performance increase, driven by longer shifts, fewer breaks, and reduced sick days. Factors such as greater employee satisfaction, a quieter work environment, and no commuting time further contribute to higher productivity.

Despite this, some managers remain sceptical. A phenomenon known as ‘productivity paranoia’ has emerged, with 85% of business leaders fearing that managing performance remotely leads to lower productivity, despite data showing increased working hours, meetings, and activity levels.

To address this disconnect, businesses must refine their performance management process, ensuring that performance reviews, goal-setting, and feedback align with company OKRs. For more insights on improving productivity while working remotely, check out our previous blog on boosting performance from home.

happy employees

Evolving Performance Management Practices

1. Outcome-Based Employee Performance

With many employees working remotely or in hybrid work setups, businesses have had to rethink how they assess employee performance. Instead of tracking hours worked or time spent at desks, managers now focus on key deliverables and SMART goals to measure productivity.

A Deloitte Insights report found that over 65% of executives believe performance management must shift towards outcome-based metrics rather than traditional output-focused measures, often referred to as ‘presenteeism’ metrics. Many view these older methods as ineffective for managing performance in today’s flexible work environment.

Investing in a performance management system, such as emPerform, helps businesses streamline processes by providing a centralised, tailored platform for tracking key performance indicators (KPIs). With dedicated performance management software, organisations can conduct performance reviews, gather ongoing feedback, run surveys, and assess employee engagement more efficiently. This makes it easier to monitor and support talent management, ensuring employees remain aligned with company objectives while working in remote or hybrid settings.

 

2. The Evolution of Performance Reviews

The traditional annual performance review has become less effective in the era of remote working and hybrid work. Many businesses are shifting towards real-time feedback as part of a more dynamic performance management process, which helps improve employee engagement and productivity.

Employees welcome this change, with 75% valuing regular feedback, and 65% wanting even more. While quarterly and annual performance reviews remain useful for long-term goal setting, ongoing feedback and frequent one-to-one meetings help managers better support employee performance on a day-to-day basis.

Business leaders also recognise the benefits, with 89% of HR managers believing that regular performance conversations strengthen employee engagement. Companies that provide continuous feedback report 14.9% lower turnover rates compared to those relying solely on annual reviews. By integrating performance management software, businesses can streamline managing performance, ensuring employees receive the support they need to thrive in remote and hybrid work environments.

 

3. Leveraging Data in Performance Management

The rise of digital performance management systems has reshaped how businesses track employee performance, especially with the shift to remote working and hybrid work. These tools enable organisations to monitor progress, facilitate communication, and provide data-driven insights to improve productivity and talent management.

Adoption of performance management systems has grown significantly, increasing from 56% in 2019 to around 80% in recent years. With bespoke reporting and dashboards, businesses can easily assess hybrid working employees, track performance reviews, and ensure the right mix of skills and competencies is in place where needed.

Leveraging performance analytics and reports helps companies make informed decisions, improving how they are managing performance across different work environments. By integrating data into the performance management process, businesses can drive employee engagement, refine objectives, and align individual contributions with company goals.

 

4. A Focus On Employee Wellbeing & Belonging

The COVID pandemic blurred the boundaries between work and personal life, making employee wellbeing a critical aspect of performance management. As Peter Cheese, chief executive of the CIPD, stated: “The pandemic may be over, but its after-effects are not. Many individuals continue to experience long COVID, mental health challenges, and the ongoing impact of flexible working practices.”

Without effective management, remote working can lead to isolation, difficulty building connections with colleagues, and overworking. In fact, 61% of remote employees struggle to disconnect from work, resulting in higher stress levels. This makes it crucial to manage performance with wellbeing and belonging in mind. To reduce burnout and avoid increased employee turnover, businesses should incorporate mental health support into their performance management process. HR professionals are increasingly implementing initiatives such as virtual team-building activities, mentorship programmes, and recognition platforms. These efforts help strengthen connections among team members, improve engagement, and ultimately support higher employee performance in both hybrid work and remote working environments.

 

The COVID pandemic has significantly impacted performance management, but with the right strategies in place, you can ensure high levels of productivity and employee engagement. By focusing on key areas such as employee wellbeing, talent management, outcome-based performance reviews, and integrating data-driven insights, you can create an environment where employees feel valued, motivated, and engaged by your leadership.

Incorporating performance management software like emPerform into your HR toolkit can support you in setting clear goals, tracking employee performance, and managing development plans. This ensures that your entire workforce remains aligned and focused on common objectives, whether they’re working remotely or in a hybrid work model. For more tips on optimising your talent management practices, explore our resource library.

Book a FREE demo with emPerform today or contact us for any advice on performance management.