Is your organization following the age-old performance management processes to evaluate the work performance of your employees? Are you aware of the new-age digitization techniques of managing employee performance? Do you aspire to set off your organization on a new journey of employing digitized methods to monitor and drive performance? If yes, read this article to unravel the innovative ways to create a performance management process in organizations.
Performance Management Process - Definition and Functions
Performance Management Process (PMP) is an ensembled process where employer and employee in collusion formulate standards to evaluate employee’s performance in line with the set objectives. It is a continual process of planning, monitoring, reviewing, and discussing the performance of employees.
PMP fixes the hurdles to a good performance and facilitates setting up a conducive and productive work environment for the employees. It examines employees’ job trajectories, translates their operational performance into monetary terms, and analyzes their contribution to realizing their personal goals and long-term organizational objectives.
Thus, PMP refers to a set of communication-based processes designed in an organization to enhance, manage, and sustain employee performance. The aim is to unlock the employee’s potential and encourage them to work to the best of their abilities. A defined performance management process inherently drives to realize employee and organizational goals congruently.
Steps to Create a Performance Management Process
Creating a PMP for your organization requires meticulous planning, designing, and formulation. It broadly involves the following four steps:
Step 1: Planning
To plan means to set the direction of where you want to go and how? Strategic planning for a PMP is a critical-thinking step to set clear expectations of future performance. It encompasses defining the following:
- the job responsibility or role
- primary objectives of performing that role - [SMART (Specific, Measurable, Achievable, Relevant, Time-Bound) objectives]
- short-term and long-term future goals
- metric to assess the performance standards
Performance management planning is a collaborative, two-way process where the employee and manager hand-in-hand draw a layout of the role to be performed and strategic goals to achieve. Therefore, it is vital to engage your employees in the initial stages of the PMP process to give them a sense of accountability and commitment. Work in sync with your employees to plan their future performance. Allow them to share their inputs and feedback on the performance plan. It is essential that you jointly discuss and agree on the performance standards set for the future.
Step 2: Mentoring
Setting a strategic plan for future employee performance alone will not reap the desired benefits. Employees need persistent guidance and direction to perform their jobs well. Hold regular meetings with them (one-o-one and team meetings) to inquire about the progress of their work, the challenges they might be facing, and any additional support or resources that they may require to execute their job responsibilities. Counsel them and provide practical solutions to alleviate the performance hurdles. Seek their feedback and give your valuable inputs to enhance their performance. Acknowledge and appreciate their efforts to elevate their motivation and engagement.
At this step, it is also crucial to revisit the set performance goals and job responsibilities. Analyze employee performance and evaluate actual work progress so far. Make necessary alterations to the set objectives in case you observe considerable deviations from the expected performance. It will curtail the possibilities of discovering performance gaps at the time of appraisals (Step 3).
Step 3: Reviewing
Once employees start delivering performance, review the performance management process to monitor the results. There are two aspects to it -
- Review the employee performance to examine if it is in sync with the expectations set in Step 1. Periodic or continuous (and not annual) performance appraisals facilitate measuring and assessing employee performance and keeping a tab on their work progress. Use a legitimate scale to rate their performance as per the metrics.
- Review the outcomes of the performance management process to evaluate if it met the primary objective of managing the employee performance. The results will highlight the challenges to optimal performance, training gaps, improvement areas, cost and time effectiveness, etc. It also ensures if the PMP is helping the employee achieve their personal and organizational goals.
Feedback constitutes the core part of this PMP step as well. Thus, recognize the efficient work performance of your employees (through monetary and non-monetary ways) and give precise, actionable feedback on the improvement areas for better future performance.
Step 4: Learning By Doing
The final step to creating a PMP is to learn from the experiences and take complete ownership of the success and failures. It sets a platform to address the performance gaps and take corrective actions for the discrepancies observed while executing the performance management process. Make a note of the things that went well and the ones that created or faced obstacles. Provide adequate time to your employees to pause and reflect on their actions. Sensitize them on the high stakes involved in their performance.
It is also a step to consider revamping your PMP to face future challenges. You can map out and put into action revised planning, mentoring, and reviewing models to manage employee performance.
To conclude, creating a performance management process is a perpetual cycle of setting performance goals, executing them, assessing the performance, sharing feedback, and resetting new strategic goals for deriving optimal employee performance.
Modern Techniques To Create a Performance Management Process
The advancement in technology has transformed the performance management process in organizations. HR is now available with innovative digital tools to manage employee performance. These automated tools serve significant value in today’s virtual office scenarios involving online interactions and performance evaluation.
New-age cloud-based solutions aid in mechanized collaboration between employers and employees to drive employee performance. Performance management software is an innovative tool in the hands of HR to create PMP using digital techniques. It takes a data-driven approach to automate the traditional performance evaluation mechanics such as Objective Key Results (OKR), Key Performance Indicators (KPI), and Management by Objectives (MBO).
The digitized PMP performs the following tasks -
- It maps employees' performance to the organizational roadmap.
- It sets parameters or KPIs by focusing on key result areas (KRAs) and objectives
- It makes a baseline for improving performance standards.
- It automatically reviews and communicates results in quantitative and qualitative terms.
- It creates online feedback templates and forms to facilitate peer-to-peer and 360-degree feedback processes.
- It prepares digital employee performance dashboards for comparative evaluations.
- It measures an employee's job capability and aptitude for the job.
In a Nutshell
Organizations create a performance management process to manage, enhance, and sustain employee performance in compliance with the organizational objectives. Planning, mentoring, reviewing, and learning are the core steps to build an efficient continual PMP. The evolution of the digital era has revolutionized the way organizations create PMP to manage the performance of their employees.