Performance management is an important tool for all companies. It can promote a greater sense of well-being among employees, as well as cultivate learning and growth. That being said, how do you know that your company’s performance management system is working?
What Is Performance Management?
Performance management is the key, systematic process through which organizations can improve the performance of individuals and teams. However, it is important to note that performance management is not just the actual evaluations themselves, but the overall system put in place to execute these assessments. In addition, performance management is crucial in generating a work environment in which employees are encouraged and enabled to perform to the best of their abilities.
Why Is a Performance Management System Important?
With evolving challenges facing companies, many organizations have shifted their focus to management systems and improving employee performance. Having a well-defined and easily executed system can optimize potential interactions into opportunities for employees to grow and learn. Only 8% of companies believe that their current performance management system is effective in its task of driving value within the company. In addition, 58% believe it is ineffective and tends to waste time. Developing a useful performance management system within your company can reduce this waste and increase the productivity and success of employees.
How Can It Help?
In addition to productivity benefits, having an effective performance management system can create connections among your organization’s policies, practices and departments. This communication can create higher caliber employee performance. A performance management process can better integrate any human resource goals you might have by reinforcing the company’s ideals. This can also create ties among HR practices to complement and strengthen them, therefore reinforcing the conditions that produce desired employee performance.
When effectively applied, performance management can help your company to create and sustain high levels of employee satisfaction and engagement, leading to greater levels of performance within the workplace. The support created through the effective use of performance management encourages employee well-being, meaning employees are more likely to deliver better performance outcomes. Your system should create a structure through which teams and managers can generate an environment where employees can contribute and grow within the company over time.
What Should a Successful Performance Management System Look Like?
The important question in integrating a new performance management system, or even updating an existing one, is how to get started. There are many different ways you can go about setting up your company’s process—it mainly depends on what your company is looking to get out of it and how you want to accomplish goals. That being said, a good place to start is with some simple goals that will lead your performance management strategy.
Some useful performance management activities could include objective setting, creating feedback options, the performance review or appraisal itself, as well as employee development. These activities should all contribute to ensuring that people:
- Understand what is required of them—including results and behaviors
- Understand how to contribute to the goals of the organization
- Are motivated to perform—and perform well
- Have the skills and abilities to deliver required performance levels
- Are supported by the organization in meeting what is expected of them
- Understand how they are performing based on useful feedback
- Deliver the required performance
- Are rewarded appropriately for their hard work and contribution
By establishing these objectives, you guarantee that employees understand what is required of them, feel supported in achieving what is needed and are given regular feedback to enable them to continuously improve. Therefore, employees add greater value to your company through improved effectiveness.
Performance Management Should Be Cyclical
Performance management should be looked at as a cyclical, ongoing process instead of an annual, rigid performance review of employees. Your company’s system should allow employees to receive continuous feedback on their performance and clearly reiterate what it is that is expected of them on a daily, monthly and yearly basis. Additionally, the emphasis should be on ongoing, evolutionary monitoring and evaluation. Current practices need to be able to evolve as the company does, and should encourage learning among employees that generates growth and improvement.
Interested in developing and integrating your performance management system? Learn more about how CoreAxis can help your company grow and evolve at https://coreaxis.com/strategy-implementation/