Gone are the days when a performance review was synonymous with cold summons to the boss’ office and returning with a long face. With COVID and remote work, organizations are pushed to consider contexts in which employees achieve their outcomes, including personal well-being, greater communication, and even reconsideration of what performance entails.
Today, managers have to look for renewed taxonomies to gauge remote employee performances in keeping with the times. This article will explore how to create a performance management plan that benefits you in 2022.
Performance management plans are a great way to ensure that you get the most out of your employees while keeping them inspired and engaged in their roles. The HR community is constantly evolving. This means what is considered good practice today may not necessarily be so a few years from now.
While the fundamental foundation remains that employees should be the centre of an organisation’s focus, performance management plans need to evolve. In today’s context, this means using the latest tech, such as AI, ML, and automation, to implement relevant, adaptable strategies that align with organisational goals, environmental concerns, social responsibilities, government mandates, and most importantly, what employees need and want. Failure to successfully plan and implement such a performance management plan can create more harmful effects than the desired positive outcomes.
What is a performance management plan?
Performance management refers to monitoring and evaluating the performance of employees. The process of performance management involves managers and their teams jointly setting performance standards for the future and then regularly evaluating the progress.
A performance management plan or PMP is a structured performance roadmap to achieve the strategic, individual goals in line with the organizational objectives. A performance management plan template involves two elements. One, setting measurable objectives of employee performance and two, frequently evaluating performance results.
Thus, PMP helps HR professionals ensure that employees achieve professional goals in sync with the organizational, strategic and long-term objectives.
What Elements Are Crucial In Creating An Effective Performance Management Plan?
Here are the elements that make up the perfect performance management strategy:
Defined Goals
This is the first step. You and your team need to understand your collective and individual goals. You must set an overarching goal, break those goals down into smaller subsets, and divide these targets amongst your entire workforce. Now, it is key that your frontline, management, and everyone in between, put their heads together to figure out the best way to make these goals work. This allows for more accountability through autonomy and directly impacts your teams’ engagement levels.
Transparency
Communication these days doesn’t just mean sending out a memo. This means ensuring that everyone is in on the process and knows that their contribution matters. More importantly, when they are a part of the effort, they know where the company stands, where it is headed, and how their efforts help achieve said goals.
Rewards and Recognition
Your team needs to know and feel that you care about them. This includes every aspect, from their financial well-being to their physical and mental well-being. This directly contributes to their performance and motivates them to work harder.
Back and Forth Feedback
In the past, reviews were one-sided. Managers would tell their employees where they stand in terms of their performance. Performance management nowadays is a lot more technical. Team members want to know how they are doing, and they want that information readily available. Ensuring that feedback is collected and dispersed regularly and constructively ensures that the machine that is your performance management strategy runs smoothly. You can’t expect to start feedback systems and have them work perfectly. They take time, effort, and consistency. Back and forth feedback must become a culture.
Putting Your Performance Management Plan Together
While you will have to modify your plan every year, here are some pointers to help you create a performance management plan for the year ahead:
Collect Actionable Data
Get information on everyone's performance, understand what was wrong, and prioritize each area's actions according to their importance.
Create Goals
Sit down with your entire team and set goals. These goals need to be SMART, i.e., specific, measurable, achievable, relevant, and time-bound. Talk to your team about what kind of goals they think are important to achieve business targets, and work together to align your entire workforce towards a big shared picture.
Empower Your Team
Give your team everything they need to achieve the goals that have been set. This means ensuring they have all the physical equipment to execute their roles and equipping them with knowledge and skills. Align your learning and skills development program with your performance management strategy. This ensures your employees grow as professionals and that in-house skills and capabilities continue to increase.
Create a Feedback a Culture
While your employees shouldn’t feel badgered for updates, you need to ensure that they know where they stand compared to the set goals. Meet with your team regularly and ensure dialogue is open and productive. This allows you to change your performance management plan based on accurate data quickly.
Implement Performance Improvement Plans
While you need to help underperform employees improve their performance, it does not have to be a punishment. Create a positive attitude around the need for improvement. Getting your employees to buy into your performance management plan ensures that they have the will to put in the extra effort. Always ensure these improvement plans aren’t about the person, but instead focus on behaviour and performance areas that need attention.
Measure your Performance
Check-in on how well your performance management strategy is working. Make sure you are achieving the goals you set. If the goals you’ve set are easily achievable, then you haven’t aimed high enough. If your team isn’t able to meet set targets, you have probably asked for a little too much from them. Measuring your performance regularly is key to ensuring that your strategy is amended as and when required.
Good performance management plan examples
Performance Management at Harvard
A January 2019 article in the Harvard Business Review describes how the general format and open-ended nature of performance evaluations are functional because they must apply to everyone in an organization. The steps to creating PMP at Harvard are:
1. Setting goals and priorities.
2. Identifying performance competencies.
3. Conducting ongoing, meaningful conversations between managers and employees.
4. Giving regular feedback.
5. Redefining goals and performance standards.
The company also follows a qualitative rating system for making annual compensation decisions.
Department of Health (DoH) Performance Management Plan
The DoH uses the concepts from the Turning Point Performance Management Framework that includes:
1. Setting performance goals and standards: communicating expectations to the employees.
2. Developing data systems to define performance measures.
3. Monitoring, analyzing and reporting of performance data.
4. Identifying improvement areas and redefining strategies to manage changes.
Performance Management at Google
People management practices at Google are driven by data and analytics. The company takes a scientific approach to set measurable performance goals and track progress using a system of Objectives and Key Results (OKRs). Employees set goals for themselves and formulate a list of quantifiable results to facilitate achieving the objectives. Managers focus more on conducting regular 1:1 meetings with their teams. They emphasize analyzing employee behavior to achieve targeted performance.
Goldman Sachs
Goldman Sachs has been around for a very long time. Performance management systems have always been in place; however, their performance management systems became less effective as the times changed.
A little digging revealed that employees were not keen on being ranked and stacked according to their performance. They wanted more regular feedback. The leadership then created a simple feedback system that allowed more frequent, high-quality dialogue between teams and managers.
This resulted in better performance.
Their approach to improving feedback systems was to incorporate regular feedback loops, making feedback a part of their culture. They also used peer reviews, which allowed teams to learn how to collaborate better.
Accenture
This is a great example for organizations that believe it may be too hard to move away from legacy approaches simply because of the sheer number of employees they have. They went with the approach of providing feedback after each assignment. They also made sure that compensation in regards to performance was fairer.
The key here was that they moved away from looking at their workforce as mere means to achieve business goals, but rather as people.
How to write a performance management plan
A performance management plan is a subcomponent of the performance management process. Writing a PMP involves the following steps:
1. Identify past employee issues that need immediate attention.
Focus on determining the performance and behavior-related matters that require urgent addressing and rectification.
2. Formulate and communicate performance goals.
Set SMART (Specific, Measurable, Achievable, Relevant, Time-Bound) performance goals on the expected performance standards. For example, you can set a goal of increasing the production output by 25% or decreasing the operational expenses by 10% by the end of the first quarter of 2022. Involve the employees in the goal-setting process. The best way to do that is to choose a performance management software.
3. Equip employees with resources and quality feedback.
Employees and managers work together to formulate a learning and development plan for their professional growth.
4. Set up regular progress meetings with the employee.
Annual reviews are a thing of the past now. Set up regular review meetings to assess employee performance throughout the year and give continuous feedback. Frequent check-ins help analyze the employee focus levels and keep track of overall goal progress. Getting continual positive results proves that your performance management best practices are working.
5. Outline reformatory measures for not meeting standards.
Specify the punitive actions in the PMP for habitual non-performers. Devise an appropriate reformatory plan to help them overcome performance deficiencies and deal with behavioral concerns.
Tips To Ensure Your Performance Management Plan Is Implemented Well
- Don’t create a plan and then expect everyone to follow it. Start with getting feedback about what improvements your team believes are needed. Listen to them carefully and ensure all relevant learnings are incorporated into your performance management plan.
- Clear communication is essential to your performance management plan succeeding. Once a great plan has been created, the next most important aspect is to make sure everyone understands the plan and is aware of the role they play in it.
- Break down your overarching business goals into smaller ones, then break those down into goals for each contributor.
- Employee roles have likely evolved since they started working for you; make sure the goals you set also reflect these changes.
- Employees need to know what is in it for them. If you have a great work culture, they are likely to be motivated to excel in their roles to ensure the business succeeds. However, give them an extra boost by giving them the right kind of recognition for their achievements. Make sure the rewards you hand out are the kind that is useful to your team.
- It is all about collaboration, which means everyone needs to be on the same page, from leadership to new hires. Get everyone to buy into the plan.
- Always check that individual goals are contributing to your overall business growth plan.
- Stick to the overall plan, but always stay flexible enough to ensure you make adjustments to meet the goals.
- Invest in your employees through rewards and recognition and employee learning and development plans. Remember, they are the core of your organisation.
- Be ready to improve your plan every cycle and make sure you have enough information to create a strategy that keeps your employees and company ahead of the competition.
Insights into the best performance management plans
Best practices when creating a PMP:
1. A good performance management plan is a team effort.
Managing employee performance is a collaborative task between managers and employees. A foundation of mutual trust, support and empathy for each other fosters this partnership. It gets reflected in employee performance and organization growth.
2. Your company's goals must align with employee tasks.
PMP must align the employee goals with the macro organizational objectives. It integrates individual performance into their respective roles to support organisation growth.
3. Professional development plans for your employees are vital.
Apart from monitoring and evaluating employee performance, PMP must facilitate realizing their professional goals. Organizations where employees review their personal goals are at the top of Deloitte's Total Performance Index. It also helps leaders and employees adjust their goals. Crafting a new performance management model every year will help you achieve that with ease.
4. A performance management improvement plan is continuous and forward-looking.
It focuses less on evaluating past performances and more on setting agile goals, periodically evaluating results, giving regular feedback and making new plans for enhanced future performance.
Set your performance management plan for 2022
Performance management plans can be rather complex and difficult to execute consistently. The good news is that technology has advanced enough to handle all this for you. Reliable performance management solutions leverage powerful AI, accurate algorithms, and automation.
Once your plan is set, you must monitor it and make sure you are on target.
Mesh is a one-stop platform for all your performance management and employee engagement needs. At Mesh, we provide customized, cloud-based solutions to companies working on remote hybrid work models.
We help organizations set goals and OKRs, continually evaluate performances, and give feedback to the workforce. Our services can help you create an effective performance management plan for 2022.
Need help to set up your performance management plan for 2022? Try out a task management platform that has it all.
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