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9 Ways You Can Improve Your Performance Management Process

Akshit Dangi

Implementing the perfect performance management system for your workplace isn’t unlike building Rome. It’s a process that takes time and is constantly evolving. Due to this, the results of implementing such a process may require some patience and time from your end.

However, a Gartner study says that most managers already spend about 10% of their work year, or nearly 210 hours, just working through performance reviews and exchanging feedback with their team members. They are checking in with their employees, praise and recognition wafts through the air, and all the key results are now in place. 

Keeping that in mind, is it not a shame that the actual results we so feverishly desire can’t come sooner?

Well, they can—by taking the right steps and nailing down each component of your performance management system, you can surface the optimal process that is well suited for your workplace. You’re already on the right track—you simply need a bit of polish for things to truly shine.

That said, we’ve already got you covered with the secret ingredients you need to get a winning performance management formula. Here’s a guide on how you can improve your performance management process in record time.

The 9 critical ways to improve performance management process

1. Invest in your people

Before you started chasing those goals and OKRs, take a good long look at your team first. Are they capable of handling the goals that you’ve set in stone? More importantly, are they able to effectively manage their growth, development, and progress on their career path?

Whichever answer may suit your team, the thing is that while exchanging feedback with your team is important, it’s also important to give them opportunities to hone their skills and build their career to truly boost their performance. To that end, make sure that,

  • your people get ample development opportunities to grow and acquire new skills,
  • you provide adequate coaching to help them pursue their desired choice of career, and
  • both you and your team members track progress and align the development opportunities to the team’s goals and key results.

2. Focus on a high-level vision and individual goals at the same time

Setting goals for every individual may be important, but in the long run, what matters are the top-line goals that you set for your organization. The vision that you establish for the organization plays a key role is affecting performance as without it, the work your people do would feel inconsequential and aimless.

However, that’s not to say that you should disregard your people’s individual goals. According to the Gartner 2021 EVP Survey, 82% of people want their organizations to view them as people and not just a resource.

This clearly indicates that individual goals must not be overlooked for the vision and should instead be well-aligned with the latter. That way, your people will care about the organization’s success and at the same time, will also feel cared for.

3. Start slow and simple

When you first begin with implementing a performance management system at your workplace, it is recommended that you begin with simple and achievable goals for a single function or department.

It is up to you on which department should you begin rolling out your performance management system in. The main thing to do is to note all the key findings and make adjustments to the system so that, by the time you implement the process for the rest of the organization, the process is smooth, well-defined, and polished.

4. Exchange continuous feedback

Often times, the term feedback is associated with the manager communicating the ways to improve performance with their team by pointing out the negatives and the past roadblocks. This shouldn’t be the case at all, as feedback is a two-way street. It should be exchanged between the manager and their team on a regular and continuous basis.

It is imperative that your people are in a position to voice their concerns properly and are allowed to provide feedback on their department’s workings. Not only would this dissociate the manager from a frontman that simply gives out orders and feedback, but they will be able to better understand their team and their needs.

5. Use data to guide decisions

The best route of managing your performance management decisions is to back it all up with data. By analysing your people’s individual and team performances and utlizing the insights gained from it, you’ll be able to,

  • make sound performance decisions,
  • determine if you have the right people for the right roles,
  • identify past roadblocks and make predictions about the future ones, and
  • fill talent gaps and identify development opportunities for your people.

6. Use the right software

Using an effective performance management software that encapsulates every aspect of your process is an absolute must-have for every organization. If you’re exchanging feedbacks on one platform, recognising, praising, and rewarding people on another, and carrying out your overall performance reviews on another platform, then it’s time to make a switch.

A single platform that can manage it all would minimize friction, standardize every aspect of the process, and would simply be much less of a hassle when compared to using multiple platforms. Not only that, but it would also support continuous feedback and ensure that you do not lose momentum and drown in software fatigue.

7. Listen to your people

Simply going ahead and implementing a system without understanding how your people feel about it is a big no-no. Before giving a performance management process the greenlight, find out how everyone feels about it, from entry-level associates all the way to the executive level.

Not to mention, once you do have a process in place, discuss and establish whether the performance management system in its current form is helping your people or not. Is the system able to help your people be more in touch with their goals and development opportunities? More importantly, are they able to track and improve their performance with the system? 

As you answer these questions, you’ll get a better understanding of the changes and improvements required to make your performance management process a success.

8. Never overlook praise and recognition

In hopes of maximizing performance as soon as possible, managers tend to not take the time and praise their team members for their efforts and work so far. This is a major reason for your people being demotivated, disengaged, and your organization having lower a retention rate.

Along with that, you also need to understand the way in which your people desire recognition. This requires finding out whether they require specific rewards (extrinsic motivation) or simple feedback and recognition for their efforts in front of everyone (intrinsic motivation). So, keep in touch with your employees through 1:1s, check-ins, and other forms of communication  to understand what they truly need.

9. Keep looking for areas of improvement

Performance management is an ever-evolving process. Having said that, many organizations tend to settle in with the process that suits them at a specific point in time. They do not consider whether the process is turning obsolete with time or not and as a result, this slows down growth and progress.

So, make sure to regularly evaluate the competence of your performance management systems and how well the process aligns with with the organization’s current trajectory. To do this, compare quarterly performance, determine whether the growth rate has stagnated, and evaluate your vision’s alignment with your goals and progress.

Why optimize performance management process

Of course, with all these massive steps to take, it’s natural to question why one should optimize their organization’s performance management process in the first place. Is putting in this much effort even worth it? Here are some reasons why you should do it.

1. Enhanced employee engagement and motivation

By tracking the performance of each individual in your organization, giving them feedback for their work, and recognizing their efforts, there is a natural enrichment in your organization’s culture. This enrichment results in your people being more engaged, motivated, and willing to put in their best efforts in making things a success.

2. Increased productivity and efficiency

With adequate performance tracking, it is no surprise that your people would be much more aware of their strengths, areas of improvement, and roadblocks that may potentially hamper their work. This awareness, along with the exchange of continuous feedback, leads to them putting their efforts in the right direction, increasing their productivity and efficiency. 

3. Better alignment with business objectives

It goes without saying that without a proper performance management system, you run a high risk of having objectives and goals that are misaligned with your overall objectives and vision, leading to aimless efforts and low output. By aligning your key results with the overall objectives of your workplace, the overall performance of the organization would see a massive refinement and improvement.

4. Improved talent management and succession planning

As a manager, taking care of your team member’s growth and development along with preparing your organization’s potential successors makes up for a major chunk of your responsibilities. Through insights gained from an effective performance management system, you’ll be in a better position to make informed talent decision and plan your workplace’s succession.

4 Common challenges that companies face after implementing performance management

There is no better way to improve your performance management system than to be aware of the challenges the come in its implementation. That said, have a look at some of the challenges you may face along with how you can overcome them.

1. Lack of clarity and communication

When implementing a performance management system, there is a high chance that your people may not be aware of the reason behind the implementation, their role in the process and how to go about doing things in general. This leads to a lack of clarity and rise of roadblocks that hamper the system from truly shining.

2. Biases and subjectivity

Biases and subjectivity are near omnipresent in performance management systems when you’re first implementing it. Due to the lack of effective vertical and lateral communication in the organization, managers are left by themselves to review their team and make use of their instincts in the overall performance reviews. 

This, however, can easily be circumvented by the exchange of feedback, setting of clear and objective goals, and discussing feedback with other managers.

3. Inconsistent and ineffective feedback

Continuing with what we established in the previous point, the feedback exchanged may often be inconsistent and ineffective due to,

  • lack of appropriate data and information,
  • subjectivity of the manager,
  • unclear and hazy objectives, and
  • lack of development opportunities

A simple, yet effective way to overcome this challenge is to be more in contact with your team, understand their needs and priorities, and incorporate it into the goals. Once that is done, work together with them to exchange feedback with actionable items that each party can follow up on.

4. Limited time and resources

Time is like a river that flows swift and sure in one direction, and as such, it will continue to pass as you make efforts to implement a performance management system in your organization.

This can potentially exhaust a lot of the organization’s time and resources. However, a simple way of treating this problem is to roll out the performance management process covering each function of your workplace one-by-one. That way, your organization’s overall performance and growth would see little impact and you’ll be able to implement the system quite smoothly.

Summing up

And that’s pretty much everything you need to know to improve your performance management process. Remember, implementing and improve such a massive system can requires time, efforts, and patience. But, as long as you do it the right and dynamic way, it’s going to be nothing less than a cakewalk.

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