Performance management strategies are often at the top of an organization’s list of priorities. With hybrid work models becoming commonplace, having the right performance management strategies is imperative to the success of your organization.
The question here is, what are the right performance management strategies for your organization? Which ones truly work?
In all honesty, it depends largely on your business model and the kind of industry you are in. We’ve listed a few top strategies to ensure you have a clear idea of what your current performance is and how you can improve it.
What is performance management?
Performance management is the process of setting goals and objectives for employees, tracking progress towards those goals, and providing feedback and support. The goal of performance management is to help employees improve their performance and contribute to the success of the organization.
There are many different performance management strategies that organizations can use. The most important thing is to choose a strategy that will work best for your organization and your employees.
One popular performance management strategy is known as goal setting. With this strategy, managers work with employees to set specific, measurable, achievable, relevant, and time-bound goals. Employees are then responsible for meeting these goals. Goal setting can be an effective way to improve employee
What is strategic performance management?
Strategic performance management is a method that can help a business achieve its aims and objectives by analyzing and finding ways to improve individual and overall performance. These can be measured using workforce metrics, including HR metrics.
Get your performance management principles in place
No matter the tools you decide to use and the technology you integrate, unless your framework is sturdy, you aren’t going to have much success.
Empower leadership to take on challenges and give their people clarity and lead by example. It is vital that all levels of leadership receive the training they need to be able to engage their teams.
Performance improvement has to be understood as an ongoing process, one that requires leaders to collaborate with their people. A clear line of communication is vital for managers to give and receive feedback.
If your performance management strategies work, great. If they aren’t giving you the results you need, make sure you change them. It is important to be agile and change your policies based on feedback and metrics.
Meet with your teams regularly. Strategy meetings and training sessions are vital to be able to implement performance management plans well. You may have various departments in your organization, but you may not be able to implement the same performance strategy for all of them. As such, it pays to adapt the process for each department while ensuring that your goals stay aligned with the overall business goals.
Keep your employees engaged, let them become part of the performance management strategies. Whether that means they suggest the type of training they need, or you allow them to take more ownership, bringing employees into the decision-making process makes them more accountable.
While performance management feedback is often about an individual, never make it personal—keep it professional.
Now that we have a framework to support the implementation of performance management strategies, let’s find out which ones work best.
What are the characteristics of effective performance management?
There are a few key characteristics that all effective performance management systems share.
Aligned with Organizational Goals:
First, effective performance management systems are aligned with the overall strategy of the organization. This means that the goals and objectives that employees are working towards should support the organization's mission and vision.
Second, effective performance management systems are flexible. They should be able to adapt to the changing needs of the organization and employees.
Third, effective performance management systems provide clear expectations. Employees should know exactly what is expected of them and how their performance will be measured.
Finally, effective performance management systems are fair. They should be unbiased and consistent in the way that they measure and evaluate employee performance.
Creating a performance management framework
The first step in creating an effective performance management system is to develop a clear and consistent framework. This framework will outline the process that will be used to set goals, track progress, provide feedback, and measure performance.
There are a few key elements that should be included in this framework:
1. A goal-setting process:
This should include a discussion between managers and employees about what needs to be accomplished and how it fits into the overall strategy of the organization.
2. A way to track progress:
This could be done through regular check-ins, progress reports, or some other method. The important thing is that there is a consistent way to track and measure progress.
3. Performance standards:
There should be a clear and consistent set of performance standards that everyone understands and agrees to.
4. A feedback process:
This should include both positive and constructive feedback. Feedback should be given on a regular basis so that employees can learn from their mistakes and continue to improve.
5. A way to measure performance:
This could be done through regular reviews, assessments, or some other method. The important thing is to choose a method that is fair and consistent.
Which performance management strategies truly work?
Let’s start with the most obvious one. Align individual, team, and department objectives with the overall business goals. While your HR department’s objective may be to ensure that productivity is at maximum, your production team may be more focused on quality. Finding the right balance and ensuring that your business produces optimum output for the highest quality is vital.
This way, both departments get what they need, and the organization can grow.
It is important to nurture this alignment by holding regular interdepartmental strategy meetings. Department leadership and teams will be allowed to synchronize their strategies to achieve common goals. This is also a great opportunity for departments to learn from each other and implement strategies that have worked in one department across all departments.
Set S.M.A.R.T. goals
Once your entire business is aligned towards achieving a common goal, it’s time to set clearly defined goals and indicators. This allows every person in the business to understand what they need to do, how they can achieve each goal, and where they stand in comparison to that goal.
Don’t overcomplicate your goal setting. Use the SMART method, which is an acronym for Specific, Measurable, Achievable, Realistic, and of course, Time-bound.
It is equally important that this is done transparently. Team members should know how they stack up against the rest of the team. If one team member is excelling, they have the opportunity to help their colleagues improve.
Transparency also makes it easier for managers and employees to exchange valuable and insightful feedback.
Go beyond checking in on OKRs
The kind of evaluation method you use depends largely on your business model and the industry you are in.
You’ve got a host of evaluation methods to choose from! Blend traditional tried and tested methods with some of the more recent ones, which are equally effective, such as OKRs and CFRs. In the traditional OKR system, the objectives represent the goals of the organization, teams, and individuals and the key results provide the metrics to assess performance. While this is great in theory, it is oftentimes inaccurate and an administrative nightmare to conduct.
Instead, organizations could try CFRs (Conversations, Feedback, and Recognition). CFRs encourage managers to take on the role of mentors and coaches, rather than micromanagers thus making it a vehicle for continuous performance management. They are crucial for hybrid work since remote work has done away with ad-hoc information we used to gather from unstructured conversations throughout the physical interactions we had daily.
Integrate performance management strategies into business planning
It is vital that business planning includes performance management strategies. Integrate your business planning with employee development plans, leadership training, reviews, and all other performance management activities.
After all, your business goals are tied directly into your performance management objectives.
Communicate, communicate, communicate, but be clear
No matter how cutting-edge the tools you use are, or how effective your performance management strategies have been for others, it cannot be stressed enough how important communication is.
Clear communication about what each strategy is, what it is for, what it is meant to be achieved and how, and how each person is supposed to contribute to that strategy must be communicated clearly to every team member.
Let your team know how each aspect of the strategy impacts them, and be clear if they have some form of compensation to gain from it.
Communication is not just about making sure you are heard; you must be able to listen just as effectively. This is why upward feedback is important. It helps leadership stay agile, allowing quick and efficient adaptation when required.
Respect and inclusion
Employees need to feel like they are respected and included in order to perform at their best. This can be accomplished by valuing employee input, fostering a collaborative environment, and promoting diversity and inclusion.
Additionally, a respectful workplace is one where differences are embraced and everyone feels like they belong. When all employees feel like they are part of the team, they are more likely to be engaged and motivated to achieve company goals.
Finally, a respectful and inclusive workplace will foster a sense of trust between team members. When employees trust their managers, they are more likely to be open and honest about their work, leading to better performance overall.
Analyze, review, improve
Reviewing your performance management strategies is just as important as setting them up. Be sure to understand what changes are happening, what improvements or lack thereof are being seen in each department, and understand how you can enhance that.
Irrespective of the size of your business, accuracy and consistency are vital. Ensure that you invest in the right tools to help you monitor and analyze your performance management strategies. Leverage AI (artificial intelligence) and powerful machine learning algorithms to gain sharp insights into precisely what is happening in your organization and how you can work towards improving each aspect.
Using powerful tech helps leadership make quick, efficient, and accurate decisions, thereby achieving the goal of improving individual processes and growing your business.
There are plenty of performance appraisal methods, but the right tool lets you implement your own approach. Check how to make your performance reviews easy and transparent with Mesh.