Performance Management: How To Do It Right?

Effective performance management is the key to unlocking your employees' full potential. Unfortunately, the term "performance management" is used widely without understanding its true meaning. A leader must recognize and value its role in increasing employee job satisfaction levels and improving the organization's bottom line.

Evaluating employees' overall performance and monitoring their development is crucial that you cannot oversee. It is essential to acknowledge employees’ abilities and skills to place them in the right positions for enhanced performance. With elevated performance levels, the organization can expect success coming its way while maintaining a good work environment where employees can thrive.

So, what exactly is performance management?

Performance management can be defined as a process that continuously identifies, measures, and develops the performance of the workforce in the organization.

Companies can simplify goals with the help of performance management software, accelerate performance reviews and performance appraisal while giving some power back to the employees.

As a leader, it's your responsibility to conduct development planning, redefine performance standards, and end employees with compelling development opportunities.

But, an effective performance management process is more than just about setting goals. The ultimate goal of it is to improve the quality of work. A great system knows how to :

• Set relevant performance objectives, i.e., not setting unrealistic goals.
• Balance individual and organizational goals. Individual growth should be given as much importance as the company’s growth.
• Ensure that employees understand and are comfortable with their performance objectives. Also, making sure that the performance period allocated to the employees is sufficient.
• Conduct frequent and timely employee reviews.

Why Performance Management is so hard?

In fact, only 14% of businesses are happy with their current performance management system.

Most of these systems have been in use for several decades. But the needs of today’s workforce have changed drastically. And the changing nature of organizations calls for an entirely updated performance management system.

Google has “open-sourced” its manager training slides, and they have a great framework for diagnosis. In their framework, performance problems tend to be caused by:

Unclear expectations: Your employees are unclear about their expectations. Maybe their manager hasn't set expectations for them clearly, provided inadequate job description, or a team-mate has not clarified that every team member is dependent on the team's performance as a whole.

Lack of skill: Your employees are unaware of performing the tasks expected of them and do not have the proper training to achieve those tasks. They might lack the necessary and required skills to perform their tasks.

Lack of will: Your employees are not motivated or interested in doing those tasks (they lack understanding or agreement of why they should be doing those tasks).

Must-Have Features In A Performance Management Program

However, not every performance management solution is created as an equal.

If you’re looking to upgrade to a more up-to-date solution, it will require a more employee-centric approach. It should have a perfect balance between what the organization wants and how it will fulfill the needs of the employees.

Efficient performance management considers the ease of use for not only the HR personnel but also the employees. Therefore, such systems seek to provide:

• Real-time and consistent feedback.
• Goal sharing and agile goal management.
• Recognition of stellar employees’ achievements.
• Integration with communication tools that people use every day.
• Mobile access with no geographical barrier.

7 Ways To Build An Efficient Performance Management System

Whatever obstacles you may be facing, here are some strategies to make things run more smoothly and efficiently in the workplace.

1: Goal management

To achieve results and improve performance, employees need to have well-defined, SMART goals. With clear goals, workers know exactly what they need to do and get more satisfaction from their work.

In many companies, goal setting happens only once per year. When the year ends, these companies revisit the goals they set a year ago. But often those goals are no longer relevant.

According to Deloitte, companies that look at goals every quarter see 30% greater performance and retention than companies that look at goals yearly.

Your performance management system needs to help users manage their work objectives continuously. Employees should be able to set weekly, monthly, and quarterly goals. They also should be able to share their goals with managers and track individual progress.

2: OKR Management Methodology

John Doerr originally presented OKRs to Google’s leadership in 1999 when Google was less than a year old. And they’ve been in use ever since.

The idea of OKR, which stands for Objective Key Results, is to connect employees' work to the company's strategic goals.

The objective is an ambitious goal that an entire organization wants to accomplish. Key Results are measurable tasks or milestones that define how a given employee can help to achieve their objectives.

Here are a few keys to what makes OKRs work at Google:

• Objectives are ambitious and should feel somewhat challenging.
• Key Results are measurable. They should be easy to grade with a number.
• OKRs are public. Everyone in the team should see what everyone else is working on and how they did in the past.

3: Recognition

Recognition features are very important for a performance management system. Appreciating employees motivates them, increases their productivity and boosts self-confidence. As a result, most existing performance management systems include recognition functionality.

It provides you with the flexibility to incorporate a system that will help in elevating individual performance. And not only that, recognition plays a pivotal role in the workforce's overall performance. It improves the organization's bottom line in the long term.

To further help you with that, Vantage Circle’s one-stop solution provides companies with the necessary platform to reward, recognize and appreciate the employees’ dedication and effort.

Recommended: Vantage Rewards- Your One Stop-Solution to every Employee Engagement Need

4: One-on-One Meetings

One of the most under-appreciated tools of any manager's toolkit is that of the one-on-one meeting.

It's time you take out to connect with each employee in your team, get a sense of what they're working on, where their priorities are, any obstacles that are in their way, share information they need to know and develop a relationship with them grounded in trust.

Here are some tips for running productive one-on-one meetings:

• To begin with, be consistent and regular with these meetings.
• One-on-one meetings are a two-way street. Listen to what your employees have to say. Try not to superimpose.
• See a one-on-one meeting as a bonding opportunity.
• Mainly keep track of what you discuss.
• Regularly discuss future expectations.

5: 360 Degree Feedback

360-degree reviews let employees receive feedback from their peers. In small improvements, employees can indicate who they want to be reviewed by. A reviewer then gets a notification to their email with a link to the review.

Reviewers answer questions and can view historical feedback about the employees. This feedback puts the review in context and includes records of one-on-one conversations, praises, check-ins, and feedback forms. It helps managers to complete a correct annual performance review of the employees without leaving any loopholes.

6: Ease Of Use

Your performance management solution needs to offer a simple user interface. Also, has to integrate with tools that employees tools every day, such as Slack, Gmail, and Outlook.

Your performance management app needs to be more employee-focused. And because the majority of your users will most likely be millennials. Thus, it needs to appeal to their preferences and needs.

7: Ongoing Feedback

Ongoing feedback is an essential pillar of modern performance management systems. It should be performance-based that will help you measure individual employees’ skills and abilities.

Providing feedback is critical to engagement and retention. But to be effective, feedback needs to be regular and on the spot. Millennials want immediate recognition of their efforts. And they value feedback not only from their managers but also from their peers.

Challenges Faced While Implementing a Performance Management System

1. The Design

One of the most crucial aspects of implementing these systems is that it needs to be aligned with the organization’s needs and requirements. Therefore, choosing the right and appropriate tool will prove vital for the organization’s long-term success.

Human resource managers make a common mistake because even if they are compatible with the organization, they negate how it will inflict them. Instead, employees should understand how the system is going to elevate their performance.

Another thing to keep in mind before choosing any tool should be the user interface and gamification levels it can provide. It should not become monotonous over time. The system should be tangible, robust, flexible, and sustainable to help the organization in the long run.

2. Budget of The Organization

The budget is something that every manager should consider before opting for a tool. You will find numerous tools in the market that will provide you with all the necessities. However, the tools you think might be out of your budget and can offer a significant roadblock in implementing a system you want.

It is essential to scrutinize the system and align it with the employees' needs. Ensure that there are no significant drawbacks and you opt for the desired tool that fits the organization.

3. Managing the System

One of the hardest things to do after implementing a performance management system is managing the system to keep it afloat and running smoothly. It requires a disciplined approach and a proper framework that will help the organization. Furthermore, the system should be flexible to be changed efficiently according to the rising needs with modernization.

It is a continuous process that revolves around appraisals, feedback, and employee development. This makes it crucial to manage the system daily to never lack an environment where employees can thrive.

4. A System That Elevates Performance

The crucial factor of a performance management system is its ability to distinguish employee performance. It needs to figure out the individual strengths and weaknesses to understand their overall competency levels. Furthermore, the system should help employees to develop their skills and abilities to enhance performance.

However, it is quite challenging to have a system that will do all that for you and the organization. The perfect solution will be hard to find. Still, it is essential to have a system that will provide you with the necessary performance management needs and enhance work efficiency.

To Conclude

In brief, effective implementation of a performance management system can propel your organization to new heights. Thus treat the above point as a checklist to build a more productive workforce.

This article is written by Barasha Medhi who is a part of the marketing team at Vantage Circle. Barasha can be found either searching for interesting HR buzzwords to write about or looking at pictures of cozy Bel Air mansions. For any related queries, contact editor@vantagecircle.com.