Why Growth Enablement is the New Performance Management

A New Vision: Eman’s Journey with Performance Reviews

Eman, a Senior HR Manager at a mid-sized company, dreaded performance review season. The process was time-consuming and stressful. Managers submitted feedback they didn’t fully believe in, employees were dissatisfied with vague ratings, and the system felt like an annual ritual leading nowhere. Despite her team’s best efforts, the process didn’t reflect the fast-paced, agile workforce her company needed to support.

One day, Eman attends a workshop on modern performance management. She learns about organisations that had replaced outdated review processes with continuous feedback loops, and the results were transformative: improved engagement, better alignment with team goals, and a more motivated workforce. Aman reflects on what her organisation could achieve with similar changes. The old ways aren’t just inefficient, they’re holding her team and company back.

Why Traditional Performance Management Systems Are Failing

Performance management systems today are too rigid, built for an era of fixed roles and predictable outcomes. Annual reviews and forced rankings are relics of the past, offering limited value in a fast-paced world where work is dynamic, collaborative, and highly agile.

A research report recently published shows that 70% of employees believe their performance management system is ineffective, and 34% of managers feel they aren’t equipped to have meaningful, developmental conversations (Deloitte, 2024). These systems don’t just fail to inspire, they actively disengage.

The reason these models fail is simple: they were designed for a different world. Today’s workforce demands transparency, continuous feedback, and flexibility. In an age of hybrid work and rapid technological advancements, it’s clear that traditional performance management no longer works.

A New Vision for Performance Management in 2025 and Beyond

Performance management must evolve from a static, bureaucratic process to a dynamic, empowering tool for growth. This future isn’t about rigid evaluations, it's about Growth Enablement.

1. Rename and Redefine Performance Management

The term "performance management" has become synonymous with judgment and evaluation. Renaming it Growth Enablement reflects a more proactive, developmental approach that emphasises continuous improvement, adaptability, and skills enhancement.

“Performance management should focus on enabling employees to unlock their potential, not just evaluating their past work.” - Josh Bersin, Talent Management Expert.

2. Prioritise Continuous Feedback and Personalised Coaching

Annual reviews are misaligned with today’s fast-paced work environment. To build engagement and foster development, organisations must focus on real-time feedback and coaching.

• Real-Time Feedback Loops: Continuous feedback mechanisms provide timely insights that allow employees to adjust their approach before issues escalate. Unlike annual reviews, they support real-time growth and adaptability.
• Manager-Empowered Conversations: Equip managers with tools and frameworks to have meaningful, strengths-based conversations regularly. This helps employees align with team goals while developing their skills.
• Dynamic Goals and Accountability: Goals should evolve alongside business needs. Frequent touchpoints ensure alignment and allow for course corrections, fostering a sense of shared responsibility.

Spotify and Zappos Family of Companies are leading examples of companies that replaced static reviews with strengths-based feedback systems. This approach has improved collaboration, employee satisfaction, and retention, proving that frequent coaching conversations drive both individual and organisational success.

“A performance management system should prioritise the development of people over evaluation. This ensures the organisation stays agile and responsive in a changing business environment.” - McKinsey & Company, What Works-and Doesn’t-in Performance Management (2024)

3. Leverage Technology for Tailored Growth

AI-powered tools like Lattice and Betterworks provide real-time, actionable feedback, helping organisations track progress and personalise growth plans. These platforms enable managers to focus on areas of opportunity while ensuring employees feel valued and supported.

A 2024 McKinsey report highlights that 65% of organisations are regularly using generative AI in at least one business function, up from one-third last year (McKinsey & Company, 2024). With data-driven insights, HR leaders can address gaps proactively and deliver tailored solutions at scale.

Case Studies: What Bold Change Looks Like

Zappos: A Strengths-Based Feedback System

Zappos has completely redefined its performance management approach by eliminating traditional reviews and adopting a strengths-based system. Here’s how:

• Personalised Coaching: Managers work closely with employees to identify and develop their unique strengths, such as problem-solving or empathy in customer service roles.
• Employee Retention: This approach has significantly improved retention rates, particularly in high-turnover positions, by focusing on growth over evaluation.

Key Takeaway: Zappos demonstrates that fostering individual strengths builds loyalty and motivation, reducing turnover in even the most challenging roles.

Spotify: Focusing on Strengths for Enhanced Collaboration

Spotify transitioned from traditional reviews to strengths-based feedback loops. Here’s what changed:

• Team Collaboration: Aligning individual strengths with team goals has created more effective collaboration across functions, boosting both engagement and innovation.
• Increased Engagement: Spotify saw a 30% improvement in team collaboration, showcasing the impact of focusing on strengths rather than weaknesses.

Key Takeaway: Spotify’s model highlights the importance of aligning employee strengths with organisational objectives, creating a win-win for both employees and the business.

What HR Leaders Must Do Now: Rethink and Revitalise Performance Management

The future of performance management demands bold and empathetic leadership. HR leaders must stop tweaking broken systems and embrace transformative changes. Here’s how they can start:

1. Turn Managers into Coaches, Not Critics Equip managers with the skills and tools needed to deliver ongoing, meaningful feedback. Strengths-based coaching inspires employees to excel while building trust and growth.
2. Embed Development into Daily Workflows Make feedback a seamless part of everyday operations. Real-time coaching keeps employees aligned with goals, reduces anxiety, and fosters continuous improvement.
3. Adopt a Strengths-First Culture Follow the example of Zappos and Spotify by focusing on what employees do best. Building systems that amplify strengths creates a culture of growth and engagement.
4. Use Technology to Personalise Feedback and Growth Leverage AI tools to provide insights into employee performance and identify opportunities for improvement. Tailored development plans ensure every employee feels valued and supported.

“Continuous feedback isn’t a luxury; it’s a necessity for companies that want to thrive in a rapidly evolving workforce.” - ?McKinsey & Company, What Works - and Doesn’t in Performance Management (2024)

Growth Enablement: The Future of Workforce Success

Eman reflects on her organisation’s need for a transformation. By moving away from static reviews and adopting continuous feedback, Eman can empower her team to unlock its true potential. This shift to Growth Enablement isn’t merely about replacing systems, it’s about creating a workplace where employees are valued for their strengths and supported in their growth journey.

The future of performance management demands bold action. Leaders must replace judgment with empowerment, evolve traditional processes into adaptive frameworks, and embrace technology as a catalyst for change. With these steps, organisations can create environments where people thrive, and innovation flourishes.

And finally, I couldn’t sum it up in any better way than this:

“Performance management is about ensuring that organisations create the right environment for talent to thrive and evolve continuously.” - Dave Ulrich, Author & HR Expert

By adopting a Growth Enablement approach, HR leaders can pave the way for a future where employee development is the cornerstone of organisational success. The time for change is now - let’s embrace it, and start unlocking potential for the workforce of tomorrow.

About the Author

Adam Chapo, MSc, MCIPD, ACC is a Human Capital Futurist and founder of InnovSphere Solutions , dedicated to transforming individuals and organisations through innovative people strategies. Connect with Adam on LinkedIn to explore how you can elevate your approach to human capital within your organisation.

References

• Bersin, J. Performance Management and Employee Growth: A Paradigm Shift.
• Deloitte. (2024). Global Workforce Trends: Rethinking Performance Systems.
• McKinsey & Company. (2024). The State of AI in Early 2024.
• Gallup. (2024). State of the American Workplace: How Strengths-Based Approaches Are Driving Engagement.
• Zappos. (2024). Building a Culture of Development and Growth.
• Spotify. (2024). Leveraging Strengths to Drive Innovation and Engagement.
• Ulrich, D. HR and the Future of Performance Management.