Key Takeaways from Recent Trends in Performance Management
As Organisations move toward year-end reviews and look ahead to 2026, data from Adare’s most recent HR Barometer 9.2 reveals that performance management processes are undergoing a major reset. Organisations are redefining what high performance looks like in a labour market shaped by hybrid work, shifting Employee expectations, and increasing pressure on productivity.
Declining Confidence in Traditional Goal-Based PM
Adare’s most recent data found that while 84% of Organisations have a performance management process in place, almost half (49%) continue to rely on traditional ratings-based systems. 22% have adopted Objectives & Key Results (OKRs) or similar goal-based approaches, with the rest using hybrid or check-in models.
Despite the wide variety in approach, there was a common theme of declining confidence. Only 37% of Organisations view their existing framework as effective or very effective, and the next largest cohort of respondents (38%) were neutral. Even among HR leaders, confidence had dipped with just 5% describing their performance management framework as very effective, compared with 12% a year ago. The signals growing dissatisfaction with both traditional appraisal cycles and OKR-only approaches.
What Should Performance Management Processes Seek to Achieve?
Performance management has been defined as ‘systems and attitudes which help Organisations to plan, delegate and assess the operation of their services.’ Performance management is underpinned by the principle that better individual Employee performance will result in better productivity and ultimately better overall Organisational results.
An effective performance management system will:
• Set individual and team objectives that align with overall Organisational goals.
• Monitor and enhance Employee and Organisational performance.
• Make Employees accountable for performance levels by rewarding strong results with better benefits and career development opportunities.
Not Simply a Process to Manage Poor Performance
Although a performance management process should be capable of identifying deficiencies in individual Employee performance, the overall goal is to maximise individual and Organisational performance rather than monitor poor performance.
The Organisational upsides of effective performance management include:
• Clear alignment of individual Employee activity with Organisational goals and targets.
• Early identification of positive performance and areas of concern to address.
• Improved Employee satisfaction and retention.
• Encourages career development and nurtures strong performers.
• Facilitates succession planning.
• Ensures salary increases, bonuses, and promotions are based on objective data and merit rather than subjective judgment.
• Creates a culture of accountability and continuous improvement.
• Early identification of performance issues before they escalate.
An effective performance management process should be capable of fostering a high-performance culture, promoting continuous improvement, and ensuring that Employee performance aligns with the Organisation’s strategic direction.
External Pressures Are Reshaping Performance Models
In the year ahead, Organisations are also finding that they are having to adapt performance management systems to macro pressures including talent shortages, productivity challenges, and evolving workforce expectations. Adare’s HR Barometer 9.2 found that hybrid work models also continue to impact Employee expectations. Coaching, transparency, and clear growth pathways are favoured over static annual reviews. At the same time, Organisations remain focused on accountability and productivity especially in a persistently tight labour market where talent supply is not meeting demand. This tension is pushing Irish Organisations to rethink their HR activity including how performance is evaluated, discussed, and rewarded.
From Compliance Activity to Strategic Advantage
Adare’s recent data shows that static frameworks, particularly those built around annual appraisals and ratings, are struggling to keep pace with the demands of hybrid and increasingly dynamic work environments. When individual Employee goals become detached from overall Organisational goals, engagement drops and performance conversations lose meaning.
For the upcoming year, Organisations are seeking to identify what performance management framework best balances engagement with high performance. The answer lies in an adaptive, blended model that combines clear goal setting, continuous feedback, skills visibility, and business alignment. Organisations are increasingly recognising that Employee satisfaction and retention are deeply intertwined with performance management activity.
Heading into 2026, Organisations who recognise that performance management frameworks must evolve from a compliance exercise to a strategic enabler will be best positioned to boost productivity, engagement, and growth. Agile, data-driven, and Employee-centric frameworks are already being employed to build high-performance cultures without sacrificing trust or retention. This trend highlights a strategic shift towards performance management systems that are more dynamic, growth-oriented, and aligned with Employee aspirations. A performance management process which values, supports and facilitates ongoing learning and development creates a "win-win" for both the Organisation and for the individual Employee.
How Adare Can Help
Existing performance management frameworks are sometimes perceived negatively by Employees, but leadership teams should work hard to dispel this myth. A performance management system that is based on two-way communications builds trust, promotes transparency and delivers exceptional individual and Organisational performance.
For support with the development of a new performance management framework, the review of an existing process, or upskilling and training Managers, please contact our team of experts in Adare who can advise and guide your Strategic HR interventions.
Adare is a team of expert-led Employment Law, Industrial Relations and best practice Human Resource Management consultants. If your Organisation needs advice, support, or guidance about compliance requirements or any HR issues, please contact Adare by calling (01) 561 3594 or emailing info@adarehrm.ie to learn what services are available to support your business.