<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=2059727120931052&amp;ev=PageView&amp;noscript=1">
March 7, 2023
7 min read

Performance Review Templates Bundle


This post was originally published in January 2021 and updated to reflect the latest performance management trends in March 2023. Several weeks into 2023, we have some hindsight on performance management trends in 2022 and a good idea of what to expect this year. Last year, employees asked for flexibility, and they got it — around 51% of U.S. knowledge workers are hybrid, going into the office at least one day a week, and around 20% are fully remote. Employees wanted more feedback, which was shown to increase engagement. 

Companies need to evolve last year’s performance management strategies to retain and engage current employees this year. HR trends this year indicate a continued focus on employee experience and well-being in light of low engagement and high levels of burnout and turnover. It’s also become increasingly important to measure and analyze the effectiveness of performance management strategies. 

An employee-first, data-driven performance management approach enables your organization to prepare employees for future disruptions and remain competitive as an employer. 

Let’s take a closer look at four performance management trends in 2023. 

1. Performance Management Trend: Upskilling and Reskilling Employees

83% of HR professionals say that they’re having a hard time finding qualified candidates for skilled roles, and 71% of CEOs expect the skilled talent shortage to be their biggest problem well into the future. As a result, upskilling and reskilling existing employees is high on the priority list for many organizations. 

Is your company practicing #reskilling? @ClearCompany says training and developing your current employees is a key #PerformanceManagement trend to watch for in 2023:

HR teams report that these strategies are some of the best for closing skills gaps:

  • Targeting skills gaps with specific employee training (42%)
  • Rewarding employees for learning new skills (40%)
  • Experiential learning, or on-the-job training (39%)

98% of companies report large skills gaps at their organizations now, which means it’s the perfect time to start reskilling and upskilling your employees. In addition to boosting the resiliency of your workforce, professional development has many benefits:

  • It boosts employee confidence. When you invest time and energy into developing your employees’ skills, they are more reassured in their work. Employees like knowing they are equipped with the tools and skills they need to succeed in their jobs.
  • It opens the door for career advancement. Teach your current employees new skills and train them on additional responsibilities to prepare them for career paths within your company — which benefits retention, too. 
  • It expands your employees’ knowledge base. The more your employees learn, the more your company benefits. Reach and exceed company goals with knowledgeable employees.

2. Performance Management Trend: Everything but the Annual Review

One of the main problems with traditional annual performance reviews is that they’re seen as unfair and incomplete. Unfair reviews can also harm company culture — 85% of employees said they would think about quitting after an unfair review, and 34% of Millennials have cried after a review. There’s no question that perspective is missing when performance reviews come from just an immediate supervisor, and causing unnecessary stress for your employees certainly doesn’t make sense. 

Get ClearCompany’s expert-informed performance review tips, then download our review templates and best practices guides: Performance Reviews: Best Practices from an Expert

As a result, companies are using a variety of new ways to evaluate performance, adding frequency, perspective, and context to their assessments. Here are some of the ways companies are managing employee performance outside of the annual review:

  • Peer and 360-degree feedback for more fair and balanced reviews
  • Project-based appraisals to enable timely rewards and recognition
  • Continuous feedback via weekly one-on-ones with managers 
  • Aligned goal-setting to clarify expectations and motivate employees

3. Performance Management Trend: People Analytics

According to the experts, HR leaders are diving deeper into people analytics in 2023, turning to their own employee data as they search for new ways to motivate, grow, and retain workers (and attract new ones). People analytics help you understand what’s going on with your employees: what has happened, why it happened, what could happen in the future, and how to reach your ideal results. 

With people analytics, you can dig into the what, why, and how of employee performance trends at your company and take the guesswork out of developing performance management processes that maximize employee talent. Analytics allows your team to make data-informed decisions about the support and resources you provide and empower each of your team members to reach their full potential.

For example, imagine that your performance analytics show a trend in which remote employees are receiving lower ratings on their performance reviews than hybrid workers. From there, you can dig in to find out:

  • Is there a particular reviewer who is giving the low scores and may need additional training?
  • Are the employees missing support or resources needed to perform remote work?
  • Are your managers equipped to manage and evaluate a remote workforce?
Take charge of #PerformanceManagement in 2023 with these 4 trends:

4. Performance Management Trend: Employee Well-being

It’s no surprise that in the wake of a worldwide health crisis, most employees want to work for an employer that cares about their well-being. What might surprise you is that 44% of employees still say they feel stressed every day at work, and just one in four believe their employer cares about their well-being. These numbers make it clear why employee well-being is a top performance management trend in 2023.

A person’s well-being, according to Gallup, is impacted by the health of five core factors of life: career, social, financial, physical, and community. When people are doing well in all of these areas, they’re considered to be “thriving” — and employees who are thriving are more likely to be engaged, less likely to experience burnout, and have higher retention rates. 

In short, empowering employees to lead healthy, fulfilled lives enables them to give their best at work. You can promote employee well-being, and in turn, improved performance with tons of popular benefits:

Employee-first Performance Management with ClearCompany

Employee-first performance management tools that are accessible to managers and workers wherever they are is a requirement for your organization to keep up in 2023. Your performance management system needs to help your HR team support employees, reach its own goals, and further business objectives. With so many options on the market, your HR team should take the time to find the best performance management software for your organization.

ClearCompany can assist with your performance management goals with our employee engagement surveys, review templates, and employee feedback and recognition tools. Generate reports and analyze trends using your employees’ real performance data to make informed strategic decisions.

See how ClearCompany Performance Management can power your employee-first strategies in 2023 — sign up now for a free demo and ask the experts. 

Applicant Tracking Made Simple

The easiest-to-use ATS software you’ll find, designed to support a remote hiring strategy.

Schedule Your Demo