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If you believe that your traditional performance management process - the annual appraisal - needs a rejig, you’re not alone. In a 2015 report from Deloitte, 49% of responding companies said that their performance management (PM) process was an ineffective use of time and resources. 89% of respondents claimed that they have changed their PM processes or are expected to do so in the near future.
Some reasons for this could be attributed to the endless hours spent completing forms, conducting meetings, and creating ratings. All of these actions are designed to look at an individual’s past performance. Instead, in today’s remote and distributed world, employees need real-time approaches to continuous feedback that can help them improve their present and future performance.
To make this change, organizations are taking a closer look at the very principles that underlie their performance management efforts. The focus now is on identifying an individual’s strengths, investing in their development as supported by relevant metrics, and following a continuous process. Let’s take a look at what that entails.
What is performance management?
Essentially, performance management is an ongoing process that includes setting individual and team goals, tracking an employee’s performance, and then developing strategies to help with future performance.
Over the past few years, the performance management system has evolved to feature more frequent check-ins, continuous feedback, and transparent review processes that help in developing an individual’s strengths and capabilities.
Performance management best practices
1. Use OKRs and set SMART goals
Objectives and Key Results (OKRs) can streamline and boost your company and team’s performance. The beauty of the framework is two-fold: it can motivate your team to set ambitious objectives and ensure that your goals are being reached with constant Key Result tracking. To top it off, if your goals are S.M.A.R.T (specific, measurable, actionable, relevant, and time-bound), then you’re creating more clarity, commitment and a sense of autonomy amongst your people.
2. Keep reevaluating goals and KPIs
With remote and distributed work being the new norm, it’s important to remember that workloads have changed considerably. Set meaningful KPIs to measure the performance of your team, and of your organization as a whole. Then, reevaluate your KPIs at specific periods. Spend some time to check whether it's necessary to make changes to your KPIs so they’re achievable, relevant and aligned with company objectives.
3. Have regular development conversations
Your regular check-ins shouldn’t have to feel like interrogations. They should instead empower and help your employees achieve their goals. Ensure that when you have development conversations, it is the sole item on the agenda, rather than a passing question within a larger check-in meeting. Let your employees take the lead and encourage them to tell you how they want to grow. Then, you can pitch in and figure out how best to support their goals. At the end of the conversation, it’s important to follow up with an employee development plan - one that outlines their big-picture goal.
4. Define and describe each role
An employee may find it much more difficult to succeed if they’re not clear on what exactly is expected of them, how they have to go about it, and what the end result should look like. One way to ensure this in the beginning stages of the employee experience is to have well-defined roles and performance standards in the hiring process. Clear expectations are a springboard for success.
5. Build a high-performance culture
Cultures are built ground up. And a high-performing one requires strategy and nurturing for its effects to be visible within the organization. This includes setting shared goals, allowing space for healthy conflicts, celebrating individual and team wins, and focusing on the team over the individual. Once you have a high-performing culture, there are plenty of benefits you can reap, some of which include more idea generation and engagement, less turnover, and increased retention.
6. Give continuous 360 feedback that is actionable
As you can imagine, a 360-degree feedback strategy is an “all-angles” approach. This means individuals get regular feedback from all directions including managers, direct reports, colleagues, and even clients (if the employee is in a customer-facing role). This feedback mechanism instils a sense of accountability and enables people to grow as a unit. However, it’s important to make sure that the feedback does not come across as pointing fingers and is instead given in a constructive, actionable manner to guide the employee toward future success.
7. Monitor progress
Keep reviewing key areas of performance. Technology - particularly performance management tools like Mesh - has empowered teams to use metrics and analytics to track the progress on goals. With this, you can even check that interventions take place early if at all they are necessary.
8. Recognize performance publicly and frequently
It may seem obvious, but deserves to be reiterated: a recognition-rich culture makes people feel valued. It has a great impact on their commitment levels and leads to better teamwork and more satisfied customers. Highlight how a team member went above and beyond for a customer, share a LinkedIn recommendation, or share a special GIF on your internal Slack channel to throw in some visual flair. These timely shout outs can strengthen the confidence of your team members.
9. Don’t depend solely on reviews
While reviews are important, they cannot be thought of as the only way to see if an employee is performing well. Also consider other parts of your system, including planning, coaching, employee development and recognition programs.
Benefits of following these best practices
When you follow the best practices of performance management, you can get the following benefits:
- Clarity of goals, time frames for deliverables, and an understanding of the importance of achieving targets to ensure business longevity.
- Boosts morale and helps people grow and build a strong work culture.
- Defines career paths and empowers employees to reach their personal goals.
- Increases retention thanks to frequent feedback sessions and recognition.
- Autonomy and accountability as a result of monitoring progress.
- Highlights gaps in training before they have an impact on productivity.
Support your performance management strategy with Mesh
Enable your managers to coach their teams in real-time with continuous feedback, transparent reviews and seamless goal-tracking. Book a free demo with us today.