Performance management communicates and clarifies job responsibilities, expectations, and development planning to employees. It’s also a way to align employees and resources to achieve strategic business goals.
There are five critical steps to a well-rounded performance management process. This article will explore each in turn: 1. Goal Setting.
Goal Setting
When some people think of performance management, they may immediately think of an annual employee evaluation. However, there is much more to an effective performance management process than that. A key component is goal setting, which involves a collaborative discussion between an employee and supervisor at the beginning of the performance review period to clarify responsibilities, priorities, and goals that optimize an individual’s performance and align with organizational strategic objectives.
It also includes a development plan that supports goal completion and ongoing feedback and communication between managers and employees. This allows for a clear understanding of what is expected and helps individuals stay on track to meet their performance objectives. It can also help identify areas where training is needed, which can be incorporated into the formal learning and development program.
The University of Exeter has a helpful PDF guide to goal-setting that can be useful for anyone, especially those with physical limitations. For example, it suggests setting challenging but achievable goals, which can increase motivation and job satisfaction. It also discusses the significance of ranking each component and how to create relevant performance criteria that can be used to assess an employee’s performance. Goal-setting is a powerful tool for increasing productivity and employee engagement when performed correctly.
Performance Measurement
The performance measurement process gathers and evaluates data for achieving a target or goal. This could involve evaluating the organization’s outputs (its goods and services), inputs (its personnel and resources), or outcomes (its knowledge, attitudes, and behavior). A common approach is a balanced scorecard that assesses financial performance, internal processes, and learning and development.
Identifying performance objectives or goals is the first step in the process. These may be specific, such as increasing sales or reducing costs, or they could be more general, such as “excellence in customer service.” Once the performance objectives are identified, managers need to select and develop the metrics that will be used to measure the performance. Choosing current standards or developing a novel, new statistic that centers on the customer experience can be as easy as this step.
Ideally, performance management includes frequent check-ins with individuals during the year designed to prepare professionals and managers for quarterly or biannual reviews. This allows managers to assess better an individual’s improvement, achievement, and overall performance. It also ensures that individual professional goals align with company goals and encourages engagement by showing employees how their efforts contribute to achieving overall business objectives. The result is a more productive and engaged workforce that brings added value to the organization.
Feedback
In the best performance management systems, managers and employees regularly communicate job responsibilities, priorities, and performance expectations. They also provide professional development planning that aligns with departmental and organizational goals. Whether through one-on-one conversations or annual reviews, this two-way dialogue allows professionals to self-assess and identify areas where they can improve while recognizing their achievements.
There are several ways to provide feedback, but the most crucial is ensuring it’s pertinent and timely. A team leader may arrange for frequent meetings with each of their direct reports to go over how they’re doing with the quarterly sales targets. This is a great way to get real-time, ongoing feedback and help your employees focus on their work rather than getting caught up in performance reviews.
Another method of providing feedback is through formal discussions, which can be conducted using various methods such as Management by Objectives or forced distribution. In addition, a performance management system can include employee surveys and 360-degree evaluations.
It’s no secret that engaged employees lead to greater productivity and overall business success. Organizations with highly engaged teams are 21% more profitable. However, many companies must utilize their performance management processes to their full potential. It may be time to reevaluate your performance management system if you need more results to evaluate the workforce.
Rewards
An effective performance management system includes clear, measurable, and attainable goals supporting business objectives and an employee’s career trajectory. These goals are discussed in the initial meeting between the manager and employee, along with a development plan that supports goal completion. Then, employees can reevaluate their growth plans on an ongoing basis with the help of their managers.
This is a critical part of the process because it allows employees to understand how their work contributes to the company’s overall success and encourages engagement. It also reveals training needs and helps guide compensation and promotion decisions. Finally, a robust performance management system ensures that all employees have an established path for advancement in their careers by aligning their objectives with the company’s strategic goals.
This is accomplished through consistent one-to-one check-ins that provide real-time feedback, which can be hardwired into daily work rhythm with the right tools. This is not a fanciful HR initiative; it’s essential to the success of any organization. It drives engagement, catches underperforming employees sooner, and helps you address issues quickly so that you can redirect your talent to get the results your business needs. It’s important to note that the best performance management systems use metrics and criteria based on what matters to your business – from top-level corporate goals down to frontline daily production targets.