The 6 top Employee Performance Management Trends of 2025

There is no denying that the business world has undergone a multitude of changes in recent years that disrupt performance management methods. In a post-pandemic "new normal" it's finally time to take stock of how businesses can make the necessary changes to their performance management process to survive and thrive in 2025 and beyond. 

Nearly half of working adults in Great Britain are working from home at least part of the time, and it's predicted that up to one-fifth of the UK workforce will look for a new job this year. 

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As we venture into 2025, new performance management trends are emerging, providing organizations with fresh opportunities to motivate, engage, and develop their employees. With the ever-changing dynamics of the modern workforce, it's vital to stay informed about the latest trends in performance management and best practices.

In this blog, we will explore the top performance management trends of 2025, revealing cutting-edge techniques and innovative approaches that will redefine your performance management approach and yield success in the workplace.

Stay ahead of the competition and unlock your team's full potential by embracing these transformative performance management trends to join the performance management revolution and usher in a new era of employee excellence.

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Aligned employee and business goals

Gartner research shows that 82% of employees say it's important for their organisation to see them as a person, not just an employee, but only 45% of employees believe their organisation actually sees them this way.

Workers who feel they are merely working toward successful performance reviews by creating outcomes and value to benefit others are less likely to be invested in their position and the company they work for. Conversely, purpose-driven employees are more likely to be invested in organisational success. 

When you consider that modern employees are seeking job stability and purpose-driven work, it's not a stretch to recognise why goal alignment is a top performance management trend. Improving employee performance begins with transparency.

Employees should understand the company's mission and business objectives, and how they contribute to those goals. Direct feedback can offer added insight into how employee performance contributes to company goals.

Employees who are recognised and rewarded for their efforts are more likely to be secure in their role in the company and engaged in their work.

Investments in upskilling and reskilling

Sixty-five per cent of UK employees consider lack of proper personal development opportunities a good reason to look for a new employer, and 7 in 10 state they would be happier in their current role if they had further opportunities for development.

Meanwhile, 80% of small firms face difficulties recruiting applicants with suitable skills. Investments in employee growth through upskilling and reskilling work to address both concerns.

Personal development opportunities empower employees to learn and grow and increase their security in their position in the company. It also benefits employers by preparing employees for changing roles in the workplace. A 2021 World Economic Forum report predicts that over half of all employees worldwide will need to reskill or upskill by 2025.

These statistics make it clear that by investing in employee development is likely to improve recruitment and retention efforts in 2025. Employers will gain additional advantages through the elimination of skills gaps that better prepare organisations for the future.

Useful Read: How To Use AI In Recruitment: A Guide for HR Pro's

Improved approaches to feedback

More than half of employees who left their job in 2022 did so because they didn't feel valued by their organisation. To retain and motivate employees, business leaders need to find ways to promote transparency and show employees their value through frequent feedback. Organisations that open multiple employee feedback channels and promote continuous feedback from both directions to influence change can reverse these statistics and improve employee morale.

Unfortunately, this is rarely the case. Research shows that only 14% of employees think their employer uses employee feedback to improve the employee experience, and even less (12%) receive personalised feedback on their performance. Many companies still use performance reviews as a main source of employee evaluation.

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Annual performance reviews with vague performance ratings are considered outdated by most employees and often do more harm than good. Only 60% of men and 40% of women have their feedback tied to business outcomes during an annual performance review, and some companies don't have specific performance criteria to direct performance evaluation.

High performers are acutely aware of how technological innovation requires constant upskilling and work continually to optimize performance. Without constructive feedback, employees are often surprised to receive low performance ratings from senior leaders who offer little direction for self-improvement.

By conducting routine one-on-one meetings and developing feedback programmes to collect opinions from employees, managers can open an ongoing dialogue in the workplace that organically corrects poor performance and offers more insight than an annual performance review.

More importantly, both parties can use ongoing feedback to improve the employee experience to drive engagement and improve performance.  

Prioritizing employee wellbeing

Employee well being is a combination of physical and mental health, along with the positive social and cultural attitudes that contribute to the workplace. The impact of well being contributes to absenteeism, job performance, burnout, and turnover. Gallup research shows that:

• 75% of medical costs accrued mostly due to preventable conditions
• Companies lose $20 million to lost opportunity for every 10,000 workers who are struggling
• $322 billion can be attributed to employee turnover and lost productivity costs globally due to employee burnout

Furthermore, 79% of employees experience work-related stress and one in 14 adults in the UK feel stressed every day. By improving company culture and supplying employees with the resources they need, employers can help reduce workplace stress and improve overall well being.

Employers who invest in strategies to improve employee well being can reap the benefits by empowering employees to lead healthy, fulfilled lives and enabling them to perform at their best levels in the workplace. 

Embracing hybrid flexibility

Fifty-eight per cent of workers in the UK prefer a hybrid role. Although hybrid work and workplace flexibility mean different things in different industries, remote employees are finally becoming recognised as an acceptable solution across many sectors. In industries where remote work isn't an option, flexibility will be key to improving employee engagement and managing performance.

Useful Read: How to engage remote employees: Tips and Strategies

This typically means providing employees with more control over their schedule and work environment. For example, allowing employees to have some control over when they work and who they work with can improve work-life balance for employees. 

However, adjusting to new scheduling demands and working out schedule conflicts can be challenging for employers. Management tools that simultaneously give employees more control and improve communication and transparency will be crucial to success. When employees have access to scheduling options and related pay and benefits, they can make informed choices and have more control over their time off.

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Tools that provide instant insight into all employee schedules at once provide managers with the ability to keep track of hours, vacations, absences, etc. without placing extra burdens on HR teams. 

Increased control over work and their work environment provides employees with an improved work-life balance and can reduce barriers to entering the workforce. As a result, employers are likely to see improved engagement and an expanded labour pool to address skill shortages. 

Technology in performance management

Businesses leverage technology and different software types to analyse company data and streamline processes for HR leaders. As companies produce more data than ever before, and remote work continues to increase, the role of technology in data driven performance management will continue to grow. Innovative tools, user-friendly mobile apps, and platforms can be used to collect employee data, recognize key performance indicators, improve workplace communication, reduce errors, and evaluate performance.

Advancing technologies like artificial intelligence (AI) and machine learning will streamline HR workflows to free up time for over-burdened HR leaders. The use of such tools can offer added insight to dramatically improve the employee experience and elevate employee and team performance. 

AI is one of the most prominent technologies expected to provide exceptional value in data driven performance management. It has changed the way companies gather and analyse employee performance data.

AI-driven analytics help professionals identify patterns, trends, and areas for improvement, enabling them to develop targeted strategies to improve individual performance and help companies remain competitive. 

Tools that improve scheduling flexibility and automate performance tracking will also play a big role in performance management. Performance management systems like scheduling platforms can be used to reduce scheduling conflicts by keeping track of employee availability.

With the right features, managers can also track employee attendance and manage employee paid time off remotely. In some cases, a performance management system can even generate reports and be used to improve workplace communication. 

As development opportunities and personal growth continue to be a pivotal factor, personalised learning platforms that offer a self service experience will become more prevalent. E-learning increases information retention rates up to 60% and 42% of organisations have experienced an increase in income since introducing e-learning as part of their training.

Online learning opportunities allow employees to learn at their own pace and help employers avoid low attendance levels due to scheduling conflicts. Moreover, these platforms allow employees to take control of their professional development. 

Using employee performance management to improve business strategies

You know that excellent employee performance is the secret sauce that leads high-level companies to success. Yet, understanding how to engage and motivate employees can be a challenge. Employee performance is closely related to workplace culture, company processes, resources, and effective communication.

When you have a clear understanding of the trends and underlying factors affecting employee performance, you can adopt your performance management process to correct errors and reduce barriers to success. By providing employees with the resources they need to succeed and using measurable data to track performance, you can empower your team to reach new levels of success. 

Shiftbase is an employee management platform that allows businesses to access their workers' schedules, timesheets, payroll, and HR in one place. It also includes features for communication, task management and reporting. Contact us to learn more about how Shiftbase can help you successfully track employee performance and use data for informed business decisions. 

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