Performance management is a continuous process by which managers and employees work together to create an effective workforce unit to achieve business goals. It is vital to achieving greater organizational success. Performance management has both tactical and strategic elements.
- The strategic aspect is about setting attainable goals for the business and developing high competence and capability.
- The tactical side is concerned with creating an environment in which employees are motivated to stand out and exercise their talents.
Elements of Performance Management
Planning is the first and crucial step. The idea is to define employee goals and align them with the corporate strategy. An effective planning process begins by analyzing the key goals you want your organization to achieve, as well as developing sound practical strategies to realize them.
Goal-setting should be a collaborative process between managers and their employees. Managers should ensure that the major job functions and responsibilities are addressed within a clear goal framework.
Haphazardly stumbling towards goals makes for poor performance and potentially non-competitive business practices. Just having a clear goal can be of great benefit. Even if the goals or strategies to achieve them need to be modified, moving purposefully means you are motivated and learning and, therefore, making progress.
A rigorous monitoring process is very important for any performance management process to succeed. It involves monitoring the progress of each department, employee, and also providing the employee with constant feedback. You’ll have to monitor each step very closely to ensure everything is on track according to your plan. If areas seem to be lacking, you will be required to take appropriate actions to improve them.
Nowadays there are performance management tools on the market that can help your company keep track of the ongoing progress of your employees. This simply means that employees can also track their performance, thus gives them ownership of their own development and which is an important quality to cultivate in effective employees.
Development and improvement
Managers need to encourage further development and improvement right after they have monitored their employees for a certain period of time. Ideally, you have a well-balanced assessment based on interactive monitoring and development that identifies key opportunities.
If employees are on target to meet the goals aligned with corporate strategy, smart and effective performance managers will not just stop there. You should aim to encourage practical ways to stretch the capacity and potential of the employees to go beyond their indicated goals.
Here are five ways, some of which you may not have thought of, by which external study can improve an employee’s career outlook: 5 Ways Studying Business Can Help Any Career. Extra training generally provides value to the individual and employer simultaneously.
Performance appraisal should include observing, listening, giving positive feedback, and also providing recognition. However, the most important part of the process is to provide feedback on what employees have successfully learned, what they still need to learn, and create a plan that will help the employee to develop those indispensable skills. This way, you will enhance employee’s growth and also the health of the company since employees have a greater sense of loyalty to organizations that develop talent from within; therefore, they become more engaged in their work. Also, these development plans allow the organization to build a talented team of employees for strategic succession planning.
Performance appraisal process helps the employees feel:
- Motivated to succeed and to develop
- Positive about their work
- Cherished for specific achievements and contributions
- Benefited by certain, positive feedbacks
- Well informed about the current and future performance objectives
Rewards and compensation
Performance management success is largely based on the rewards and compensation elements. In fact, the appraisal process is not complete if there are no rewards and recognition. Managers should therefore make formal rewards and recognition part of the performance management process to motivate teams and employees that have met or exceeded performance targets.
Rewards and compensation for good performance is actually the practical way to improve morale, employee satisfaction, boost productivity, and help your organization move closer to your goals. This way, employees can strive towards qualifying for the same at the next performance appraisal through continuous involvement and contribution to the company’s goals.
Managers should make sure that rewards and compensation programs are fair and equitable based on a formal record of exceptional performance. Getting the good results from rewarding performance depends on incentivizing the right behaviors. For example, ask yourself whether employees can achieve the rewards while upholding ethical principles, such as being honest to customers and supporting co-workers.
What are the Benefits?
Effective performance management can benefit the managers, employees, and organization in several ways:
- Better organizational performance
- Responsive business promotion (Activate Press Business)
- Improved productivity
- Employee retention and loyalty
- Clear accountabilities
- Overcoming the barriers to communication
- Cost advantages
- For healthy workplace programs, reduced absenteeism
- Reduces conflicts
- Saves time
- Enhances efficiency and consistency in managerial performance
- Spells out employee expectations and self assessment opportunities
- Supports professional and personal development
- Improved health and job attachment.