Much more than just a substitute term for the traditional appraisal process, Performance Management has a far broader scope.
In the era of instant feedback – where reviews and ratings govern many of our daily decisions – the annual employee appraisal can be considered antiquated at best.
Twelve months is a long time in business, yet many will happily leave it this long to provide any genuine feedback to their staff. This often stunts an employee’s potential, to the detriment of both the individual and the business.
An approach which provides ongoing, genuine and consistent support for employee development and growth – even before they join the business.
It’s known as Performance Management.
What is Performance Management?
Performance Management begins with clear job descriptions and recruitment processes that help you bring on board the right people, and on-boarding programmes to help them hit the ground running.
It’s a framework that will help employees perform and reach their potential, creating an environment where they can thrive.
Once in the job, it means a never-ending cycle of education, coaching and feedback. Turning every interaction between manager and employee into a learning experience and a chance for the employee to be heard.
It’s this mentality that really underpins a Performance Management strategy. Recognising that feedback and direction isn’t something that should happen annually, but is integral to your employees’ everyday experience.
Progressive organisations are now implementing a more continuous approach to managing, motivating and rewarding good performance. Research has found that 74% of managers that are effectively coaching and developing their employees say a Performance Management system is effective. 62% of these say their business’ performance is better than their competitors (Mckinsey, 2018).
Such a shift in approach will, of course, take time to implement. In this blog, we’ll look at how you can start taking steps in the right direction.
1. Define your objectives
Performance Management is a somewhat broad term, and no two businesses will go about its implementation the same way.
To help define your strategy, it’s important to have clear goals and objectives in mind, beyond simply ‘helping employees do better’.
Raising morale or boosting productivity will naturally have an impact on your bottom line, but without a clear goal, success is hard to measure.
You should, therefore, look to set and document some clear objectives that can be tracked. This could be certain financial goals, improved staff retention numbers or increased satisfaction scores in customer service surveys.
Ultimately, your Performance Management programme should align with your organisation’s strategic goals.
2. Communicate the benefits
In aiding the development of employee skills and encouraging them reach their potential, a Performance Management framework can be great. But it’s important to realise that employees could perceive your intentions very differently.
Workers might see the continuous coaching ethos as micro-managing, or perceive the added focus on performance as extra pressure. Similarly, managers themselves may worry about how they’ll fit more regular catch-up sessions into an already busy schedule.
Communicating your plans and objectives clearly and honestly will help people buy into the new approach. Explain exactly what changes you’re making, why you’re making them and what it means for individuals going forward.
Remember that from an employee perspective, performance evaluation is linked to salary. So be clear on how it will affect wage increases and promotions.
If you’re moving away from annual appraisals, you can bet the first question on employees’ minds will be: “When do we get our salary reviewed?
3. Train your managers
It’s widely accepted that for a modern manager to succeed, they must be able to coach. But that’s not to say every manager has the natural ability to do so.
If you’re asking managers to make feedback and coaching a key part of their relationship with employees, give them the confidence and skill set to do so.
Whether through workshops or one-on-one sessions, think about how you will give your managers the training they need. How can you use that time to further communicate the benefits your Performance Management programme will bring?
4. Take advantage of technology
Perhaps the most fundamental first step towards efficient, effective Performance Management is finding the right technology to support it.
Many cloud-based HR platforms provide Performance Management functionality to help shape and support your new, improved processes. Built-in workflows and goal-setting features are geared towards managing and motivating performance on a continuous basis.
Goal setting functions typically allow you to set and communicate goals at both company and employee level. This will help to keep individuals engaged in their work by regularly refreshing targets.
Meanwhile, customised schedules and automatic reminders can help ensure that both managers and employees stay on track with regular catch-ups.
Performance Management: why do it?
Performance Management frameworks are already yielding positive results for adopters – encouraging more businesses to rethink their approach to appraisals.
Don’t just introduce a Performance Management plan for the sake of it. It’s important to set clear objectives and monitor its ongoing success.
After all, in the culture of Performance Management, even your Performance Management programme itself can benefit from constant feedback and review…
For more information on the benefits of performance management, read this blog post.