Employee performance is becoming harder to measure as the nature of work changes. Roles are becoming more interconnected, skills are evolving rapidly, and organizations are asking employees to contribute beyond narrowly defined job outputs.

The World Economic Forum’s Future of Jobs Report 2025 found that 39% of workers’ existing skill sets are expected to be transformed or become outdated between 2025 and 2030. The report also identifies analytical thinking, resilience, flexibility, leadership and social influence among the core skills employers consider important.

For Employee Performance Management (EPM), this raises a practical question: Can organizations continue to assess performance effectively when what constitutes good performance is changing?

Results are only one part of performance

Targets and KPIs remain central to performance management, but they do not always capture the full contribution of an employee.

The CIPD’s 2026 performance management evidence distinguishes between task performance, behaviors and other aspects of contribution. It also notes that where work relies heavily on teamwork, organizations may need to incorporate team-based goals or behavioral objectives rather than relying exclusively on individual targets.

This becomes particularly relevant as collaboration and human skills remain important alongside technological capabilities. The World Economic Forum identifies collaboration, leadership, resilience and analytical thinking among the skills employers expect to remain important as work evolves.

The challenge is defining what good performance looks like

A performance system can only be as effective as its criteria.

Employees need to understand what is expected, how performance will be assessed and how their objectives connect to organizational priorities. The CIPD recommends aligning individual and team objectives with organizational strategy while recognizing that different types of work may require different approaches to measurement.

For complex roles, rigid targets may not be sufficient. Learning objectives, competencies and behaviors can provide additional evidence of performance, particularly where outcomes depend on collaboration or changing circumstances.

Managers have to interpret the data

Performance management does not end with collecting ratings and KPIs.

Managers have to interpret results, provide feedback and determine what action is appropriate. The CIPD identifies people managers as central to performance management, with responsibility for connecting organizational and individual objectives, giving feedback and holding employees accountable. It also describes performance management as a continuous cycle rather than an isolated event.

That makes managerial capability an important part of the system. Clear criteria and data can support better decisions, but managers still need to understand the context behind the numbers.

Performance systems also need to account for changing skills

The skills an employee needs today may not be the skills the organization will need several years from now.

The World Economic Forum reports that 59 out of every 100 workers are expected to require training by 2030, reflecting the scale of anticipated workforce reskilling and upskilling needs.

For EPM systems, this creates a stronger connection between performance assessment and employee development. Competency frameworks, feedback and development objectives can help organizations identify not only whether employees are delivering current responsibilities, but also where capability needs to develop.

Building the capability

Designing an EPM system around objectives, performance criteria, competencies, feedback and improvement requires more than an appraisal form. The Certified Employee Performance Management Professional and Practitioner certifications from The KPI Institute cover EPM system architecture, strategic alignment, performance processes, criteria and competencies, as well as calibration and bias mitigation. For professionals responsible for designing or applying employee performance systems, the programs provide a structured framework for connecting performance management with organizational goals and practical workplace requirements.