Remote work has become the new normal, and hybrid work models have become commonplace. This is where the performance management cycle comes into play. You have to take four crucial steps to ensure your performance management cycle works effectively, whether your teams are onsite or working from their homes.
What is performance management?
In simple terms, performance management is a structured action plan that organizations follow to ensure their employees are meeting the required standards. The purpose of performance management is to identify areas where employees need improvement and set goals that will help them reach their potential.
What Is The Performance Management Process?
The performance management process is the system that organizations use to manage employee performance. The process usually consists of four steps:
- Planning: In this stage, managers and employees discuss expectations and set goals for the upcoming performance period.
- Monitoring: During this stage, managers keep track of employee performance and provide feedback.
- Evaluating: At the end of the performance period, managers and employees review progress and discuss areas of improvement.
- Adjusting: Based on the evaluation, goals and expectations are adjusted for the next performance period.
What is a performance management cycle?
The performance management cycle is a process that is constantly being improved. It has to do with regularly planning, monitoring, and measuring the workforce’s performance. The performance cycle model must align individual performance objectives with the goals and objectives of the organization.
The very concept of the performance management cycle was first talked about in Peter Drucker’s book, ‘The Practice of Management,’ published in 1954. Drucker’s original book focused on the MBO method (Management By Objectives).
The prevailing theory was that such practices would allow managers to understand the desired goals and implement strategies to achieve them.
Why adopt a performance management cycle?
Standard procedures must be followed to either promote and reward individuals or take action on those that are not performing. The goal of performance management cycles is to ensure that the person in the role is the right fit.
2. Motivate your team
The reason you conduct performance reviews and evaluate your team is to find out how well they are doing and to help you decide to what extent they should be rewarded. Rewards could be increases in pay, better benefits, or promotions. These kinds of performance-based rewards help your team stay motivated.
The higher the motivation of your workforce, the higher their loyalty to the organization. A workforce that is rewarded appropriately is inspired, engaged, and is less likely to look for jobs elsewhere.
The better your performance appraisal and reward system are, the more productive your team is likely to be.
5. Training needs
Your HR team has to draw up an effective learning and development strategy for the entire workforce. Performance management tools help them understand which areas need focus. They can then design the strategy around addressing those areas.
Stages of the performance management cycle
The HR team figures out exactly what kind of performance is expected from employees. This means defining what good performance is based on objectives that have been set for the company.
Job descriptions are useful to determine what is expected of each employee. Involve your workforce in the process, let them know what is expected of them, and understand their expectations. The more involved they are in the process, the more accountable they become.
While there are bound to be some basic requirements, performance plans should be as flexible as possible, allowing changes to be made according to changes in business objectives or requirements.
The S.M.A.R.T framework can be especially useful in this context. Remember that the goals set have to be clear, achievable, and aligned with your overall business goals.
Offsite monitoring can be quite challenging. Use the latest technology and tools to ensure an accurate idea of each person’s contribution to the overall process.
Track every goal set in the planning phase. It allows you to constantly measure the performance against expectations and provide feedback on each individual’s progress. Use employee performance review software that give you real-time insights and provide analytics about every activity team members carry out.
This is where you look at the information you’ve gained using the performance management cycle and understand the key issues. You may gain insights into why one employee is performing better than another or understand what is causing a particular employee to have poor performance. Discuss the results with your employees and talk to them about how far they can achieve the desired goals. Let them know how you think they can improve. Also, make sure you ask them for input on how you can help them get there.
If an employee has done great, their performance review discussion could give you performance review tips on how they managed to do better than the others.
The fourth part of your performance management cycle is where you reward your team members for what they have achieved. Employee recognition is a vital part of the performance management cycle. If you want your team to keep trying to meet the desired goals, they need to be rewarded appropriately. Being recognized by leadership for their work efforts can be very meaningful for an employee. Spend some time coming up with employee recognition ideas that are motivating and often a surprise for employees, who may assume their contributions are going unnoticed. This will go a long way!
Tips on creating a working performance management cycle
Here are a few quick tips for creating an effective performance management plan.
- Have a clear outline of what is expected from each team and each individual.
- Create the right environment that allows employees to perform their best without hindrance.
- Individual accountability must be treated as a process. This involves leadership talking about, assessing, and accepting the contributions of the team members.
- Upward feedback is essential to incorporate at every stage of the performance management cycle, right from deciding the performance parameters to creating performance improvement plans.
Performance Management Cycles: Best Practices
There are a few best practices to keep in mind when implementing a performance management cycle:
- Set realistic and achievable goals: Goals should be specific, measurable, attainable, relevant, and time-bound (SMART).
- Communicate expectations: Managers should communicate their expectations to employees at the beginning of the performance period.
- Provide feedback: Feedback should be given regularly throughout the performance period. It should be both positive and constructive.
- Be consistent: The performance management process should be applied consistently across all employees.
- Use data: Data collected during the performance period can be used to inform decision-making in the next cycle.
Advantages of the Performance Management Cycle
There are several advantages of using a performance management cycle:
- Helps managers identify areas of improvement for employees.
- Encourages employees to set and achieve goals.
- Facilitates regular communication between managers and employees.
- Provides a structure for giving feedback.
- Helps organizations make data-informed decisions.
Speeding up the performance management cycle
If you are looking to speed up the performance management cycle process, you can do a few things.
- Start by setting appropriate goals driven by each goal's impact.
- Have a clear understanding of how employees can achieve these goals and enable their success.
- Give your team access to all the tools, skills, and development routes to ensure they give them the support they need to succeed.
While these are great ways to enhance your performance management cycle, the process involves collecting vast quantities of data, processing it, and then analyzing it.
Use tools that give you real-time insights and provide analytics about every activity team members carry out. You don’t want your people hunched over forms, use intelligent forms that come with pre-populated content based on goals set and feedback received. Every business is likely to have a slightly different performance management cycle. Make sure the tools you use are easy to customize to your needs.
Are you looking for ways to help your employees plan their tasks? Adopt a user-friendly task management platform that is fun and easy to use.