What is performance management?
Performance management is a relevant yet the most detested function in an organisation. People approach it as a visit to the dentist, essential but averted. The basis for these aversions is many. The employees feel their managers/immediate bosses do not listen to them during the performance appraisal process, and hence it does not bear rewarding results for them. Likewise, the managers and HR personnel are dissatisfied with their current annual performance reviews and seek solutions to make them more effective.
Performance management is the continual process of administering and enhancing employee performance. It is a driving force that anchors employee engagement strategies in an organisation. The aim is to align individual objectives with the organisational goals and values for long-term synergetic growth.
The core principles of performance management drive the quality and effectiveness of the appraisals. People form an intrinsic part of a performance review process. Hence, the performance management principles focus on developing people and managing their performance. Let us understand these principles in detail.
Principles of performance management
- Give continuous feedback on employee performance.
The annual or semi-annual performance reviews are distressing and taxing for the managers/leaders and the employees. The conversations are intense and intimidating, with too much pressure on both the parties to pull it off productively, but the efforts often go in vain. The feedback on the entire one-year or six months performance is ineffectual at that point. It does not render beneficial results in improving future performance.
A continuous feedback system at regular intervals is the optimal performance improvement tool. Devise programs to keep performance reviews an ongoing process for constant recognition and guidance. It helps hold the relevance of the feedback and gives an avenue to employees to continually work on it. Stimulate managers to give continual actionable feedback that their team members can instantly implement and deliver required results. Precisely speaking, initiate processes to shift from traditional, annual reviews to continuous performance management to manage people.
- Do not excessively formalize the performance review process.
The primary reason for performance appraisals being a daunting task for employees and managers/leaders is the excessive standardization of the entire process. In reality, effective performance management comes from gauging the motivational attributes of your employees and developing conditions to help them achieve their goals. It does not thrive in a rigid, bureaucratic system having no scope for informal interactions.
Thus, make performance management systems a dynamic and impulsive mechanism for employees to help them build productive and meaningful relationships with their managers. Build informal performance systems that encourage regular, easygoing conversations (1:1s), not constrained by time, place, and topic. Do not make compensation, promotions, and pay hikes the ulterior motives of informal one-on-ones with employees. It eases the mounting pressure of conducting formal performance reviews.
- Align employee growth to organizational success.
For organizations to achieve long-term sustainable growth, it is imperative to sync employee productivity and growth with business goals. It ensures that their efforts contribute to achieving common goals and steer the organization towards the success path. Discuss and understand the roadblocks to good performance and arrive at solutions to eliminate them. Confer about the learning and development opportunities to help your employees progress in their careers and contribute productively to achieve business objectives.
- Turn your managers into coaches.
Managers today have broader roles to play than managing people. Train them to play the role of a coach or a mentor. Direct them to help their team members identify their intrinsic skills, strengthen their confidence, and encourage them to leverage their skills to acquire new capabilities. This constant support builds employee trust in their managers and their commitment to the company. The ongoing coaching helps them develop their true potential and work on the improvement areas.
- Make performance appraisal a two-way communication process.
An effective performance management system needs to be a collaborative problem-solving tool for managing employee performance and enhancing overall organizational performance. This collaboration is attainable when you make performance appraisal a two-way communication process.
Thus, while your managers use performance management systems to set and assess performance standards, they must also ensure the active participation of employees in the review process. Encourage employees to give open and honest feedback on the organizational procedures, policies, and work environment. Stimulate them to share their viewpoints, ask questions, and raise concerns to their manager. It makes them feel valued for their contributions and increases their active engagement in the assessment process.
- Use OKRs and KPIs as performance management tools.
Organizations must change how they perceive, execute, and interpret the employee goal-setting process. They need to adopt the new framework, Objectives & Key Results (OKRs), to set SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) goals. Strive towards making it a collaborative and flexible task where employees define their performance goals with their bosses and remodel them as per relevance. Continually track their progress using Key Performance Indicators (KPIs), a calculable performance measure of specified targets. The ongoing evaluation of goals helps them stay on track and get more engaged at work.
- Develop a transparent performance system and communicate it well.
Transparency and effective communication are also the vital core principles of performance management. Build transparent review systems that reflect a coherent picture of the procedures to evaluate employee goals and performance. Communicate the performance expectations clearly to the employees for better performance planning. It avoids confusion, builds employee trust in performance management processes, makes them more receptive to feedback, and motivates them to perform more productively.
- Facilitate your employees to drive the performance review process.
Delegate the performance review responsibilities to your employees. Empower them to take charge of the preliminary steps such as filling in the performance records, scheduling one-on-one meetings, and planning the content flow during the conversations. Giving control instils a sense of ownership and a feeling of accomplishment in employees.
- Create a positive performance work culture for employees.
Performance thrives when an organization provides a productive work culture to employees. Build a value system that focuses on collaborative working, knowledge-sharing, counselling, learning, and mutual respect. Equip your employees with tools to perform their jobs efficiently. Empower them with responsibilities by showing trust in their competence. Engage them in the decision-making process and give recognition to their ideas and suggestions. Invest in their growth by providing valuable training opportunities. Reward them with the right incentives at the right time to appreciate their efforts. A positive and productive work environment creates synergies that reap long-term rewarding results for employees and the organization.
- Automate performance management process.
Doing appraisals using manual techniques such as a pen and a paper or filling-in performance review forms prepared on spreadsheets or Word documents/Google Docs has become obsolete. Automating the performance management process is essential to keep pace with today’s fast-upgrading digital times. Invest in the right tools and technology to expedite the appraisal process and enhance the efficiency of the performance evaluation process. Let us understand this further in our subsequent section.
How can technology help you implement performance management best practices?
The rapid advancement in technology has taken performance management in organizations to new heights. The cloud-based, automated HR solutions are now available to eliminate the paperwork and ease the operational and administrative tasks of the managers and HR professionals at each stage of the performance management process.
The distinguishing features of the new-age performance system are -
- Standardized procedures for collating and evaluating employee performance records on a real-time basis
- User-friendly controls for collaborative goal-setting and consistently monitoring and measuring the progress
- Automated scheduling and setting of reminders
- Customizable templates accessible to managers and employees for writing performance reports
Thus, technology is a great facilitator that helps implement the performance management best practices in organizations. It helps leaders and HR professionals focus on the most valuable asset - their people.
Make performance assessments more effective
In today’s competitive and highly technologically-advanced times, organizations cannot afford to use traditional performance management systems that rely on conducting annual reviews in a formal set-up. The revolution in technology and shift to global mindsets have redefined the core principles of performance management. The market is booming with ultra-modern HR software that comes with unique features for managing the performance of the employees.
Mesh provides automated, cloud-based solutions for all your performance management needs. With Mesh, you can set goals and OKRs, establish continuous feedback loops, schedule 1:1s, and get performance reports of your employees to help you build an effective performance management system for your company. Request a demo to know more.