Until recently, I had never worked for a fully remote company. Now, I’ve tasted some of the challenges, such as building relationships with colleagues without water cooler conversations. I've also experienced the benefits. For example, I could take care of my boyfriend’s elderly dog while he worked out of the house.

As of last year, 12.7% of full-time employees in the U.S. are remote workers. This is projected to rise to approximately 22% over the next two years. This tracks with what workers want. Post-pandemic, a reported 98% of workers want the option to work remotely, at least some of the time.

For companies, this raises the question: How does one effectively manage people and their performance in a fully remote work environment? In this article, we look at common challenges of remote performance management and strategies to cultivate high performance in virtual teams.

Key Challenges of Remote Performance Management

Before exploring remote performance management strategies, it’s essential to take a step back and unpack the core challenges managers face in managing a remote workforce.

Building Relationships Remotely

From improving motivation to facilitating innovation, developing strong relationships with team members is foundational in driving strong business outcomes.

Relationship building comes to us more naturally in in-person communication. When we communicate face-to-face, body language, and numerous non-verbal cues enrich the quality of communication. We can think of these interactions as high-bandwidth communication. Other forms of communication, like email or chat, are considered low-bandwidth communication.

Without face-to-face, real-time conversations, managing performance, coaching, or giving feedback to remote colleagues becomes much more complicated. It takes a lot more intention and planning in a remote work environment.

Monitoring Productivity and Employee Engagement

In a physical office setting, it’s easy to check in and understand how your team and colleagues are doing. In a remote company, things are different. You have limited visibility into your employees’ day-to-day and how long it takes them to complete tasks. Time and attendance tracking software offers solutions to track a team’s working hours. Depending on the features of your time and attendance system, you can also monitor employees’ online activity and productivity.

While technology can “keep tabs” on what employees do at work, there is a fine line between tracking employee productivity and micromanaging in a remote work environment. You want employees to feel supported and cared for, as opposed to policed and overly monitored.

Be mindful that barriers go both ways. If remote employees need time to connect with you, creating opportunities is complicated, especially if you’re in different time zones or the team has flexible work hours. Supporting employee engagement in remote teams requires open communication. Regular check-ins with direct reports and collaborative virtual workspaces are essential.

Engagement also depends on how well and often you recognize remote workers. It’s easy to take an employee’s work for granted when you don’t bear witness to all the effort and hours behind it.

Maintaining Team Cohesion

Teams can take various forms, such as stable departments with specific roles and dynamic teams put together to focus on specific projects. Whether it’s solving problems more effectively, keeping each other healthier by lowering the risk of burnout, or helping each other to grow, it’s undeniable that teamwork makes the dream work.

Developing a cohesive team is more difficult when team members are dispersed across different geographies. This can be even more complex if your team comprises diverse cultures.

Strategies to Maintain Successful Remote Performance Management

As a human resources professional, it’s vital to align remote performance management with your overarching performance management strategy. The performance management system(s) you’ll have in place must also be adaptable to remote work arrangements. Here are approaches to consider and incorporate as you build and refine your strategy.

Set Clear Goals with Objective and Key Results (OKRs)

Set your employees up for success by setting specific, measurable, (appropriately) challenging, and time-bound performance goals with them. Taking the time to set goals with your employees can be a meaningful exercise in employee engagement.

Goals can unite teams, motivating everyone to work towards a shared vision. This is especially critical in a remote environment, given the increased likelihood of remote employees feeling isolated and lonely.

The Objective and Key Results framework, otherwise known as OKRs, is a helpful tool to leverage in this regard. The Objective portion outlines the goal, while the Key Results portion articulates what achieving the goal will look like.

I found OKRs to be an excellent tool for people management when I worked at Teach For Malaysia. The leadership team would first set the organization’s OKRs, which department heads would own. Based on these high-level OKRs, I would co-create annual and quarterly OKRs with my team members and my manager.

In weekly one-on-one check-ins, we’d use OKRs to keep us accountable and focused on how our day-to-day work connected to the organization’s goals. On a bi-weekly basis, the organization’s OKRs would be reported on and shared throughout the company.

In this way, OKRs provided a backbone that kept expectations and efforts aligned, as well as our motivations high. Recent research backs this up, unveiling that 34% of employees would feel more motivated if they understood the connection between their work and the company's mission.

Measure Success with Key Performance Indicators (KPIs) 

A close cousin of OKRs is KPIs, or Key Performance Indicators. KPIs are metrics that provide insight into whether your team is on track toward achieving goals.

KPIs are especially useful in a remote team setting. They create a shared language to track progress and performance across geographies and time zones.

KPIs enable you and your team to make informed, data-driven decisions - even if they happen asynchronously. They also enable teams to be agile and allocate resources effectively and efficiently.

When choosing KPIs to track performance toward specific goals, consider whether your chosen indicators are leading or lagging for the goal in question. Leading indicators enable you to anticipate trends and forecast what might happen in the future, while lagging indicators clarify and confirm patterns occurring over time. Both are helpful to track but may not inform decision-making in the same way.

For example, if your OKR is retaining a certain percentage of staff within the first two years of hiring them, a lagging indicator could be the number of resignations received at the end of the first year. A leading indicator could be the level of employee satisfaction at the end of their first six months.

Both OKRs and KPIs offer quantifiable evidence of performance, which eliminates a lot of biases around employee performance. These metrics are even more effective when tracked using performance management software - a purpose-built tool for measuring and tracking individual and team performance over time.

Connect Through Virtual Team Building

Team building is a practice I treasure deeply. It creates a sense of belonging and community between individuals - which is easily lost in a remote work environment if it isn’t prioritized.

How does this connect to performance? According to recent research from Qualtrics, cultivating a sense of belonging amongst employees motivates them to perform and, ultimately, deliver better business results.

Carve out time to connect with your team on a human level. This can be as simple as incorporating a 10-minute icebreaker into regular team meetings.

A virtual team-building activity I enjoy is pairing everyone up and sending them into breakout rooms. Each person shares their hidden talent with their partner. Everyone then returns to the main meeting room and shares their partner’s hidden talent with the rest of the group. In that way, we all learn something new about every person on the team.

You can have various virtual team-building activities to make them accessible and inclusive to your employees. Not everyone will want to connect in the same way, and that’s ok.

Consider whether the activities are real-time or asynchronous, how regularly they take place, and whether they are just for fun and connection or also have a practical component. Form non-work-related Slack channels to connect and share asynchronously about random topics of interest. You can also curate workshops for people to learn new skills together. There are a plethora of different approaches to virtual team building.

You also don’t have to do this on your own. Encourage your team and employees to get creative and share team-building ideas.

Practice Transparent and Consistent Communication

Effective communication is crucial to minimize the many details that can get lost in translation in a virtual work environment.

One practical way to overcome this is to leverage multiple communication channels to reach out to each other. From video conferencing to texting to team collaboration software, there are a myriad of different ways you can facilitate clear, immediate communication when working remotely. If you’re also working across multiple time zones, it’s also helpful practice to record meetings and take notes to share with people who cannot attend so they can get up to speed easily.

Besides that, team meetings and regular check-ins allow managers to support colleagues. I meet with my manager twice a week. She always reminds me that I can reach out to her and others in our team if I have questions - which has gone a long way in making me feel supported and set up for success in my work.

Another aspect of transparent communication is ensuring employees have easy access to company policies and procedures. Employees must also get timely updates on any changes in these policies.

One trend I’ve seen often in my work is employees wanting clarity around how performance is evaluated, how it’s connected to compensation, and how promotions happen. Transparency about these policies fosters a culture of trust amongst employees.

Employee Development in a Virtual World

Employee development can take several forms in remote teams. Whether the feedback is constructive criticism for performance improvement or celebrating an achievement, it gives employees visibility into what they’re doing well and how to improve. In a remote work setting, this also helps people to feel connected, supported, and seen.

You can bolster this further by incorporating learning and development goals into OKRs. This signals to employees that you are invested in their growth. This could be a stretch assignment or a commitment towards completing specific workshops to upskill.

Be sure also to set aside time to discuss professional development goals regularly. Take this a step further and co-create long-term training and career development plans with your employees so you both know and can work towards these goals together.

Another way to develop employees while creating opportunities for connection is through remote mentorship programs. Depending on the level your employee is at, you can either connect them with someone more senior or encourage them to hone their coaching skills by taking on a mentee.

Review and Manage Performance Continuously

You’ve set clear expectations for performance with OKRs. You’re tracking them regularly through KPIs and in check-ins with your team. They’re also aligned on how to track their goals, regardless of where in the world they are.

What comes next is having a performance management process in place to review and manage employees’ performance continually. This helps with goal-setting and to see how everyone is performing relative to one another and their goals.

Continuous performance management lets you recalibrate and course-correct as needed. After setting goals and tracking them regularly, you can include structured performance reviews or performance evaluations every quarter to six months. These reviews should feed into an in-depth annual review that concludes your performance review cycle.

Reward and Recognize Colleagues

The company is thriving thanks to your robust performance management and review cycle. Congratulations! Make the time and effort to acknowledge all of your colleagues’ achievements. This helps them feel seen, valued and appreciated for what they do.

Similar to communicating in a virtual environment, take a myriad of different approaches toward celebrating your colleagues’ milestones and achievements. Send them a direct message to thank them for all their hard work on a particularly complex project. Or tell them how grateful you are to have them on your team in your next one-on-one meeting. In a virtual environment, public recognition through communication platforms enables others to find out about and celebrate them. Each type of employee recognition you imbed in your management culture contributes to a positive employee experience.

We have a dedicated #celebrations channel on Slack, which is a fun and inclusive way to recognize and celebrate achievements together. Besides that, recognizing and celebrating accomplishments is also part of our team meeting agendas.

Beyond recognizing your employees’ great work, you should intentionally reward them. This can be challenging to standardize and implement consistently across an organization, especially a remote one.

Consider incorporating an employee rewards system into your HR tech stack. They take the load off HR in executing a rewards program by automating the process and onboarding employees to the process. While monetary rewards, like performance bonuses, are effective, employees also appreciate several non-monetary incentives, from extra days off to experiential rewards.

Develop Understanding across Cultures

One benefit of working for a remote company is the opportunity to hire from a global talent pool. However, you may also encounter challenges dealing with different working styles if your team members come from different cultures and backgrounds.

If this is true for you, one worthwhile investment to consider is using cultural inventory tools. These enable you to discover and compare your work approach with other cultures, countries, and colleagues.

During my MBA, I had the opportunity to explore this through a class on global leadership. In this class, I was introduced to the GlobeSmart profile tool by Professor Ernest Gundling, which gave me great insight into how my working style compared to that of my peers from other countries - and how I might adapt my working style to work more effectively with them.

Conclusion

Performance management in a remote environment is undoubtedly tricky to navigate. But at the end of the day, the guiding principles remain the same. Regardless of whether employees are in-person or remote, employees perform when they have clear goals and feel seen, connected to, and supported by their team and manager.