The Performance Management System isn’t a simple field to navigate. It’s constantly evolving, hence the necessity for an effective performance management system. New performance management trends emerge per annum and every one too often, human resource departments catch on wrong. Employees are left feeling deflated, unmotivated, and unengaged and managers are frustrated at the poor levels of team and individual employee performance. Thankfully, more and more companies are waking up to the importance (and resulting benefits) of effective performance management systems. the primary step towards revitalising and improving your existing performance processes is to understand what an effective performance management system is. to try to to this, we’ll address the following questions:
What Is Performance Management System? (Performance Management Defined)
When discussing performance management, many people immediately consider the annual performance review process. But the performance appraisal is merely one component of what’s considered to be performance management. one among the simplest definitions of performance management is provided by Michael Armstrong in his Handbook of Performance Management, which carefully and plainly lay out the Armstrong performance management cycle:
“Performance management is that the continuous process of improving performance by setting individual and team goals which are aligned to the strategic goals of the organisation, planning performance to realize the goals, reviewing and assessing progress, and developing the knowledge, skills, and abilities of people.”
A key point here is that performance management may be a continuous process — not a once-a-year activity. Quality performance management should, therefore, bring together a number of different, integrated activities to make an ongoing ”performance management cycle”, as shown below.
What Are the Stages of the Performance Management Cycle?
The first stage of Armstrong’s performance management cycle is that the “Planning” phase for the forthcoming period. Planning should involve:
Agreeing on SMART objectives
- A personal development plan
- Actions to be taken within the coming months
A Review of the employee’s job requirements, updating the role profile where necessary. Historically, organizations tended to carry out this planning stage once a year. However, with the business environment becoming increasingly agile and fast-moving, many organizations are adapting their processes to line “near-term” objectives every three months. The organization’s goals and values should feed into performance planning to make sure that individual performance aligns with the overall strategy of the organization. Specifically, each SMART objective should contribute to achieving one or more of the organization’s goals.
Personal development planning, meanwhile, should consider what behaviors, skills or knowledge the individual must develop to successfully achieve their objectives and uphold the organization’s values.
Traditionally, organisations have placed tons of their emphasis on the “Review” a part of the cycle — actually because a performance assessment is required for reward purposes. However, we’ve always advised that it’s the “Act” and “Track” stages that are the foremost important. These stages are where performance is actually delivered and results achieved. Individuals got to be encouraged to schedule in regular time to figure on achieving their objectives and personal development plans. Similarly, managers got to be checking in with their staff regularly. they need to give frequent, effective feedback and use coaching skills to assist their team members overcome challenges and identify opportunities for learning and performance improvement. If this is often left until an end-of-year review, it’s too late — objectives and development plans may find yourself only partially achieved.
Notice that within the above performance management cycle, there are not any arrows between the four stages. this is often because, in reality, the stages don’t flow one after the other. Act and Track should be continuous throughout the year. Reviews may happen at any point and planning may happen several times during the year and be re-visited because the needs of the business change.
What Does the New Continuous Performance Management Cycle Look Like?
Since 2015, this philosophy of continuous Performance Management has been adopted by leading organisations like Microsoft, Deloitte, Adobe and General Electric. of these major names have abandoned traditional once-a-year performance appraisals in favour of regular ”check-ins” and frequent (or real-time) feedback.
These regular performance discussions are typically developmental and future-focused. They provide team members with an opportunity to explore what has gone well and the way success are often replicated again, any challenges faced and the way they’ll be overcome — and agree on actions both the individual and manager got to fancy develop the individual and further improve their performance. Such check-ins also are an excellent opportunity to deal with employee development while offering training opportunities and regularly reinforcing performance expectations. Here is how this Continuous Performance Management process typically looks in leading organizations.
Performance Management System Process:
There are a couple of basic elements involved in building an effective Performance Management framework, including:
Goal setting — you would like to line goals the proper way. they have to be meaningful and understood. Employees should have context on why these individual goals matter and the way they’re furthering organisational objectives. Employees will care far more about their roles and be far more engaged once they know — and truly understand — how their job matters.
Goal setting should be a collaborative process. Where once goals trickled downwards from the higher-ups in an organisation, modern companies are aligning goals upwards. So goal setting should involve meeting with employees and being transparent about company goals, direction and obstacles. Armed with this information, employees can create goals which complement organisational objectives and make daily decisions to further these objectives. Furthermore, when employees are put within the drivers’ seat and allowed to develop their own goals (before having them approved by their line manager), employees experience a heightened sense of autonomy and ownership over their work. Inevitably, this leads to improved employee performance.
Transparent communication and collaboration — Employees want — and deserve — their managers and leaders to be open and authentic in the least times. They don’t want to be kept within the dark when their companies are browsing adversity . they need to be kept au courant pertinent information. On top of this, they need real-time communication while building healthy relationships with their colleagues and managers. this may involve regular feedback and honest discussion — even when such communication is difficult or uncomfortable.
Employee recognition — An effective Performance Management system should prioritise employee recognition and reward. Employees should feel valued and appreciated for the work they are doing and therefore the effort they put in. If employee recognition isn’t a priority, this may most likely have a negative bearing on your voluntary turnover.
Honest and regular feedback and reviews — The more frequent and precise the feedback, the better individual performance. It’s that simple. Employees want regular insights into their work and therefore the better-informed employees are regarding their performance, the better able they’re to enhance and excel.
Employee development — No ambitious top performer wants to stay at a company long-term without honing and developing skills. Advancement and development are important to employees — to not mention, companies stand to benefit when employees are more skilled and capable.
So what’s Effective Employee Performance Management?
Having all of the elements of the performance management cycle in situ is extremely important, but this may not necessarily cause effective performance management for your organisation. There are many other factors live , such as:
Having buy-in from leadership and senior management to Performance Management
Ensuring the Performance Management cycle is continuous and not an annual process
Ensuring performance conversations and reviews are meaningful and not ”tick-box” exercises
Having easy to use performance management software which supports effective performance management and provides you visibility of Performance Management activity.
The skills and willingness of your managers to deliver effective pPerformance Management on a day-to-day basis