Performance management has long been a challenge for both leaders and employees. Traditional appraisal systems, rooted in annual reviews and numerical ratings, are increasingly seen as outdated and disconnected from the realities of today’s work. According to Deloitte’s 2025 Global Human Capital Trends report, a staggering 72% of workers and 61% of managers expressed distrust in their organisation’s performance management processes. Cyprus is no exception. Local businesses, particularly SMEs, often rely on outdated appraisal systems that fail to drive business value and employee development.
It’s time for a shift: From process to performance
The message from Deloitte’s global research is clear: reinvention alone is not enough. To truly unleash human performance, organisations must move beyond tweaking performance management processes, but engineer performance holistically instead. They should embed it into the daily flow of work, prioritising human and business outcomes equally, as well as designing systems that foster trust, purpose, and ongoing development.
In Cyprus, achieving this requires a fundamental cultural and strategic shift. Many managers spend just 13% of their time on employee development, resulting in poor feedback, vague goals, and misalignment between effort and organisational strategy. At the same time and despite ongoing modernisation efforts, 75% of global organisations still admit to struggling with evaluating true performance—especially the value created through collaboration, creativity, and innovation. These are challenges that Cypriot organisations also face and should urgently address, especially in people-intensive sectors like retail, hospitality, and professional services.
So, what does a new approach look like?
1. Separate assessment from development
Performance reviews should not be monolithic events. Instead, development conversations, coaching, and feedback must happen continuously and outside of any compensation-related discussions. In Cyprus, leaders can build trust and engagement by focusing on frequent, low-stakes check-in discussions that reinforce employee development.
2. Build manager capability
Effective performance management relies on capable managers. Equipping them with coaching skills, emotional intelligence, and the ability to provide actionable and timely feedback are all essential. This is especially important in Cyprus, where people management is often seen as secondary to operational demands.
3. Align goals with purpose and strategy
A performance culture thrives when employees understand what they are working towards and why it matters. Aligning personal and team goals with organisational objectives creates clarity, ownership, and motivation—key ingredients for driving and achieving high performance.
4. Embed wellbeing in performance
Organisations that prioritise wellbeing as a driver of performance, see better engagement and higher retention rates. In Cyprus, where the competition for skilled talent is growing rapidly, integrating mental health, flexible working arrangements, and recognition into performance practices can be a powerful differentiator.
5. Use technology and data wisely
Even simple digital tools can improve performance management by making goals visible, providing timely feedback, and measure progress. For Cyprus-based businesses, scalable, tech-enabled approaches offer a cost-effective way to modernise without overhauling everything at once.
The payoff is significant. Deloitte’s research found that companies effective at enabling human performance are more than twice as likely to achieve strong financial results. For Cypriot organisations, the imperative is clear: move beyond the checkbox of performance management and embrace a human-centric model that fuels growth, innovation, and resilience.
In a world where talent is the ultimate differentiator, engineering performance isn’t just good HR—it’s good business in today’s thriving modern workplaces.
· By Charis Kourtelli, Director, and Georgia Hadjipolydorou, Senior Consultant, Human Capital, Deloitte Cyprus
