Your workforce performance metrics can give you the insights and tools needed to enhance your business results. In this blog post, learn how to upgrade your performance review process and prepare your organization for the future of talent management.

To improve the narrative surrounding performance reviews, you need to change more than just your employees’ opinions about the process. Your HR leaders should be fellow strategic partners for growing your business, and your talent management and performance appraisals need to be treated as elements that drive business results. Organizations leveraging their HR teams as strategic partners are 1.8 times more likely to be highly effective at quickly adapting at scale to capitalize on new opportunities. To prepare your company for the future, your annual reviews can no longer be merely a performance management process. They’re now an integral part of your organization’s success—if you leverage them well.

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Use Performance Insights to Drive Business Decisions

Of course, you always want to see your employees further develop their skills and grow professionally, but the people insights you gain from your talent management software can be used for so much more than coaching your developing workers. You need fresh skills and innovative talent to keep up with evolving technology and changing trends. A robust performance management system can show you trends in your talent pool. These trends will help you make strategic, data-informed choices about how to deploy the skills that already exist in your organization.

For example, your organization may decide it needs to implement AI technology into its processes to enhance productivity, but you don’t yet know how to get started. You can use data from your talent management system to assess which employees already have AI skills, as well as who has the greatest potential to obtain these competencies and execute them well. With this information in hand, you can develop a strategy to help these employees improve their skills and apply what they know to your AI initiatives.

Performance data is also an indicator of which employees show potential for advancement or future leadership opportunities. You can analyze past performance reviews and manager feedback to help you decide which employees to put in your succession planning pipelines. Doing so means you’re taking preemptive measures to minimize disruptions to your company’s workflows when key roles become vacant. When you nurture your internal talent for future roles within your organization, it makes leadership handoffs easier for teams. It’s also likely to save your recruiters time and resources since they won’t need to source senior roles that are typically more challenging to fill.

Performance appraisals are also strategic tools for compensation planning. You can analyze past performance trends and establish a baseline for expected employee growth and improvement throughout the annual review cycle. From there, you can communicate these expectations and incentivize your employees to meet their benchmarks with compensation awards like annual bonuses and merit increases. In this way, you’re ensuring that your workforce is growing the skills they’ll use to drive your organization’s results while providing a competitive compensation award aligned with their professional goals.

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Incorporate Employee Feedback Into Improvement Strategies

An effective talent management process leaves room for employees to self-reflect on their performance and participate in their goal-setting and development. Your employees will be more engaged with the review process when they’re active collaborators in their career growth. These conversations are also an opportunity for employees to discuss how they’re handling their workloads, the amount of stress they carry, and other factors that may impact job performance.

Recent data from Gartner shows that 45% of employees worry they won’t be able to sustain their current level of performance over the next year. Anxious employees can’t do their best work. Knowing if your workforce is starting to feel overwhelmed gives you the chance to mitigate burnout and set your employees up for success.

With employee self-assessments documented in your performance management system during the formal review process, they can reveal valuable insights about your talent pool’s general attitude toward their job and your organization. Analyze your employees’ self-assessments. Look for trends in your performance review data that might reveal common workflow challenges or other inhibiting factors, and use that data to inform your organization’s improvement projects.