A Guide to Performance Management
Performance management is a must for any organisation that seeks to grow.
That’s because it’s so intimately tied to employee performance, organisational competence, and overall customer satisfaction.
If you want to learn more about the performance management process and how to implement it at your own business, this guide will help.
What is performance management?
Performance management is essentially a process that tracks employees’ work with the aim of improving it.
That’s a simple way of putting it, but as any experienced HR professional will tell you, a performance management system can be highly nuanced.
For one thing, it goes beyond a plain performance review. It’s highly dynamic and always seeks to identify, measure, and improve worker performance based on current company missions.
KPIs, peer reviews, and more may be included. It’s an ongoing process that allows managers to assess people’s work and whether or not it’s supporting actual business objectives.
That’s how it also identifies what can be done to better align employees’ skills with those objectives, e.g. through upskilling initiatives.
Two Key Approaches to Performance Management
There are many ways to do performance management. What suits one organisation may not suit another due to differences in the way they operate, after all.
Broadly speaking, however, these are the two most popular approaches to it:
1. The Results-oriented Approach
This approach is preferred when there are easily identified performance metrics involved.
For example, let’s say you’re doing performance management for a Sales Team. In that case, several clear metrics appear, from sales or conversions to clocked hours on the sales floor.
2. The Behavioural Approach
But what if there are no clearly identifiable performance metrics that would apply to individuals? What if most of the output in a department is team-based or from collaborative projects?
In that case, you switch to this. This approach focuses on how employees behave and what that indicates about their ability to perform and put in effort.
Your feedback in this case will be focused on identifying ways to get employees to behave in ways more aligned with your goals.
The Steps for Performance Management
So, how do you start doing performance management? Different performance management guides will split up the process in varying ways, but here are the core steps:
1. Set up the plan and parameters
Technically, you already have a starting point for this in your employees’ KETs (key employment terms or job descriptions).
That being said, it’s important to review employee responsibilities regularly. Organisations change, even if only subtly, and roles within them may do the same over time.
In any case, set and communicate goals clearly at this stage. Make sure employees understand what they’re expected to do so they can also see how they will be assessed.
2. Track employees’ performance
Naturally, you have to monitor employees’ performance continuously in order to manage it.
By tracking it, you can minimise the possibility of them going astray through reminders and communication. They can stay focused on their actual tasks and do their jobs better.
3. Provide training and improvement
As you track employees’ performance and compare it to the goals and expectations established in the first step, you’ll identify areas for improvement. Your employees may discover some themselves.
Work with them to find such points and figure out how to implement them or address gaps. Put together training programmes, mentoring systems, etc.
4. Measure progress
As you monitor and improve performance, use actual metrics that everyone can track for transparency and utility.
You want a system that allows you to measure employees’ progress. Are they improving? Developing? The metrics should let you answer that.
Be sure to share this with employees, of course, so that they know what they should aim for.
5. Offer positive reinforcement
Ideally, you should offer positive reinforcement for employees hitting their goals. This helps motivate them and encourage them to keep getting better.
Common rewards are performance bonuses, public awards, rewards programmes, and more.
Tips for Good Performance Management
Now, a lot of people have been doing performance management for years. As such, we already have some ideas about what works and what doesn’t.
Based on that, here are some tips that you can apply to your own performance management.
1. Constantly assess and re-evaluate goals
There can be constant shifts to organisational goals depending on the business’s needs. Forces outside of your control can necessitate such shifts – look at the Covid-19 pandemic, for example.
That’s why it’s vital to re-evaluate your organisation’s and employees’ goals often. Make sure that they’re still right for the situation.
2. Use SMART to frame goals
SMART is a proven criteria guide for goal-setting. It means that goals are the following:
- Specific
- Measurable
- Achievable
- Relevant
- Time-bound
Each of these makes goals easier to comprehend and monitor. For example, specificity prevents misunderstanding, whereas measurability ensures easy progress tracking.
With this framework, you give employees something clear to work towards, as opposed to vague objectives.
3. Do regular performance management conversations
Talk to employees often about what you expect and what performance management involves.
This constant communication will allow both employees and managers to know what’s going on through open conversations about how they’re doing.
This means no one is caught off-guard by unpleasant surprises and you also get space for constructive feedback.
4. Use a standard process
This simply means you should ensure that the performance management process is standardised.
It should be applied in the same way to all employees for fairness and consistency. Otherwise, you’ll run into accusations of unfair assessment and favouritism.
In Summary
Performance management is a key process for those who want to ensure employees are heading in the right direction for an organisation’s growth. It ties directly into workforce development and optimisation of organisational capacity.
If you want to learn about related topics, you can get more useful HR tips and tricks from our other how-to guides and templates. Browse them now.
