Effective employee-manager communication greatly benefits organizations. If it isn’t practical, employees won’t feel like their needs are being supported. They won’t work hard to accomplish their strategic goals and objectives to better the company. Performance management builds strong communication and ensures all employees conduct their roles to the best of their ability. Companies can create effective strategies and workflows using performance management systems and retain historical performance data to track everything easily.
What is performance management? Performance management is a communication tool used to identify, measure, and develop the performance of employees, teams, and departments to support the overall business goals and objectives. It is a continuous practice that incorporates goal-setting, feedback, check-ins, and engagement surveys during employee performance cycles. Conducting performance management ensures that each employee is actively engaged, growing in their work, and invested in your company’s success for the long haul. When done correctly, performance management begins when a job is defined and ends when that hired employee leaves your organization.
While performance management is typically the role of a manager or department lead, an HR professional should contribute by encouraging managers and supervisors to take responsibility for managing performance within their team and plan for performance improvement across the organization.
How does performance management work? Performance management is either formal or informal. Managers can assess employee behavior, conduct, peer feedback, and quality of work. This system has a grading and scoring system based on employees’ achievements, performance scale, and feedback mechanism. These features track performance, measure career goals, and map employees’ next five or ten-year growth plan. The system divides the review process into self-review and manager’s review. Self-review and manager’s review are two sides of the same coin. In the self-review system, employees rate their performance and share learnings. They assess their key performance indicators (KPIs) of work goals and many targets achieved in a particular quarter. Manager’s reviews are based on a critical analysis of the company’s return on investment (ROI) generated through employee performance. Managers are responsible for showcasing the dollar value of their employees’ efforts and helping them get promoted or receive handsome bonus amounts.
Performance management directly impacts the efficiency and work quotient of a workplace. By running feedback-driven performance reviews, employees get a sense of belongingness and value, which increases their motivation and inspires them to outdo themselves at work. Several departments within a company practice performance management to track performance, run rewards or loyalty programs, and upgrade designations.
Importance of performance management Performance management can impact your business significantly, no matter the industry or size of your organization, because it can make or break employee performance and engagement. When performance at a company is well-managed and employees are working at their full potential, organizations reap the rewards. Because performance management is about understanding and motivating employees to perform while supporting the broader goals of the organization, not only will the company achieve peak performance and reach new heights, employees will do the same. Employees in every department and within every role will know what’s expected of them, motivating them to improve their skills and development and deliver the results needed per their employee success plan. While some companies think checking in with an employee once or twice a year during a performance appraisal is enough, those who utilize performance management will likely get better results since they can more easily solve what isn’t working and double down on what is. Employees will benefit from a continued push to reach their goals and progress rather than rushing to meet objectives once employee performance review season rolls around. Performance management is about measuring and improving the employee’s contribution to the organization and should always be noticed. Remember that the goal of your employees is to achieve the company mission and vision, along with theirs. 94% employees want their managers to provide them with proper feedback and opportunities for enhancing their performance level. Source: Enterprise Apps Today
Components of performance management strategy Performance management is an essential tool that helps employees realize their full potential while assisting management and HR to get the most out of the workforce. Since performance management is a process that aims to bring individual goals together with group and organizational goals, it’s a strategic and formal process. When building a strategy, here are the standard components you should include.
Employee check-ins Employee check-ins have the power to make or break the feedback culture. These casual one-on-one conversations are typically between an employee and manager about the employee’s performance, progress toward their goals, and what they need from their manager to be successful within their role. Frequency matters when it comes to employee check-ins. They should be performed weekly to create a comfortable tone and to urge an ongoing and evolving conversation. It helps to build a strong feedback culture where employees feel heard rather than managed.
Sufficient feedback No employee wants to be left in the dark regarding how they’re doing at work – they want to know how they’re performing. Because they want to be sure they’re doing a good job, managers need to communicate with their employees regarding their performance. Employee feedback checklist Every manager must touch upon employee performance attributes, like:
– What the employee is doing well
– What the employee can improve on
– How the employee can evaluate their own work
The more feedback a manager gives to an employee, and vice versa, the better for everyone.
Goal setting and management Part of a well-thought-out performance management strategy will enable SMART (specific, measurable, achievable, relevant, time-bound) goals to be aligned throughout the organization. Goals can be created or cascaded down by managers. The goal management functionality also facilitates the tracking of goal progress. To drive employee engagement, managers must work to ensure their employees’ personal goals align with the organizational goals and that progress toward these goals is part of their regular check-in conversations. In addition to SMART goals, other types of goals that are a part of performance management include:
– Project goals are goals of the company’s project objectives. These goals often change as projects are complete, but they iron out other macro goals.
– Behavioral goals are employee conduct goals and standards a workplace aspires to achieve. They can also entail working on ways to improve any behavioral issues that have occurred in the past.
– Stretch goals are goals that test the patience and resilience of employees. These can be anything that expands a high-performing employee’s knowledge, skills, or abilities.
360-degree performance reviews One of the most valuable elements of performance management strategies is the 360-degree performance review. This method is when employees are allowed to both receive and give constructive feedback regarding the performance of their peers, managers, and direct reports. It creates a well-rounded view of their performance instead of only receiving feedback top-down from their manager. It can benefit employees as they better understand their strengths while also providing new development opportunities and where they need additional coaching. These varying perspectives allow employees to get a complete picture of their strengths, weaknesses, and new ways to grow.
Employee engagement surveys What matters most to your employees? That’s where an employee engagement survey comes in. As the name suggests, the main reason organizations carry out an employee engagement survey is to discover if employees feel engaged or disengaged. While there’s no right way to measure engagement, you can start by implementing employee engagement software to your company’s tech stack. Doing so can help organizations solicit and track employee feedback, recognize employee achievements, and promote positive activity. What should an employee engagement survey include? Some commonly assessed factors within these surveys include:
– Career Advancement
– Recognition
– Pay and benefits
– Training and development opportunities
– Leadership
– Work environment
Aside from measuring engagement, it has the added benefit of allowing employees to voice their concerns and comment on what is being done well within the company. These results, in turn, highlight areas for improvement and development.
Recognition and rewards A little recognition and praise can go a long way, and it’s a big part of performance management. Whether you use feedback apps or collaboration tools to empower employees and encourage them to celebrate small successes or announce an employee’s success in a team meeting, they can boost workplace productivity. Managers should offer recognition and rewards for goals met, values demonstrated, and work well done to keep employees engaged and working toward their organization’s goals. 94% of employees will stay with a company for longer if it invests in recognition and rewards.
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