How do you know when you’re doing a good job? Completing what is asked of you? Exceeding personal and organizational goals?
An effective performance management system provides a clear process, a set of steps that outline how employees can improve performance through personal development, self-awareness of strengths and weaknesses, and actions needed to achieve their goals.
The system should not be seen as an exhausting process, rather an opportunity to create a feedback-rich culture that motivates employees to do their best.
What is Performance Management?
Performance management, not to be confused with performance reviews, is a process that involves creating a work environment that incorporates goal setting, assessments and recognition, with coaching heavily offered throughout the process.
While execution varies according to company needs, structure and culture, a performance management system contains three primary phases. Each phase has a purpose.
Goal Setting – Employees and managers work together to identify goals, based on job duties and responsibilities, that can usually be achieved within a year or more frequent deadlines as the company permits. Clear expectations should be communicated during goal-setting.
Assessments – Managers provide evaluations, either on an annual basis or more frequently, to go over employee development and performance. Feedback is typically provided by management and coworkers. In some cases, the employee may conduct a self-evaluation.
Recognition – Employees should be recognized for accomplishments with incentives and rewards such as promotions or bonuses. This is also a time to discuss areas of improvement and ways management can help the employee improve performance.
When Should It Be Used?
Ultimately performance management is about improving results – whether it’s individual employee performance, team goals, or a combination of both.
Global organizations such as Cisco, GE and Google have implemented performance management systems that focus on team dynamics and how individual employees contribute to their team, according to a 2017 article by Deloitte.
Traditional performance management systems revolved around annual performance reviews, which included ratings or numerical forms of measurement. Today, many organizations are customizing PM systems and incorporating real-time feedback and micro “check-in” sessions that are less formal. The foundation of any system just requires three key phases: the rest can be adjusted according to needs, goals and results.
These best practices provide company leaders with tips to ensure each phase of the process is completed and executed effectively.
5 Best Practices in Performance Management
SMART Goals – Creating focused, clear goals will help ensure all parties understand employee expectations. If your organization does not have a specific process or guidelines for goal-setting, following the steps to create SMART goals can help streamline the process and make sure they are structured accordingly. The acronym SMART stands for Specific, Measurable, Attainable, Relevant and Time-Bound.
Ongoing Feedback – Whether or not your organization conducts annual performance reviews, providing continuous, actionable feedback will ensure employees know exactly how they are doing in real-time. Failing to communicate more frequently could result in increased unawareness of problem areas and lead up to a difficult annual review which could have addressed issues sooner.
Provide Training – Organizations can improve the entire process by providing ongoing training for both employees and managers. Managers can dive deeper into the critical aspects of leadership, including how to give feedback and how to practice active listening when talking to employees. Employees can also benefit from additional training and learn how to better communicate with team members and managers.
Leverage Technology – Many HR technology companies have everything from mobile apps to software platforms that allow you to congratulate colleagues publicly, or request “check-in” sessions with your boss. Using these tools may encourage employees to seek out feedback and constructive criticism faster and more frequently.
Reward Success – From a simple “thank you” in the hallway to extending a promotion, rewarding people for achieving a goal will not only set an example for others to improve overall performance, but it will encourage the person who is recognized to continue the good work.