What is a performance management process?
The University of Berkeley defines performance management as an ongoing process of communication between a manager and an employee that takes place throughout the year to support accomplishing the company’s strategic objectives, and which comprises ‘clarifying expectations, setting objectives, identifying goals, providing feedback, and reviewing results’. Performance management policies allow managers to proactively monitor their staff members and help them perform at their best on an ongoing basis.
Rather than wait for scheduled appraisals, managerial staff can identify issues any time throughout the year and step in to take action as required. These open communication channels mean any problems can be promptly addressed and employees guided if they are doing something incorrectly. Naturally, a properly designed performance management process leads to continuous improvement on the part of both employees and the company as a whole. This is especially important if you want to grow your business.
How does performance management benefit your business?
Having a performance management process in place is a must for any successful company and benefits employees and their employer alike. In the uncertain times of the COVID-19 pandemic, in particular, a sound performance management process can be especially helpful for navigating your business through uncharted waters. Benefits of performance management include:
- a culture of open dialogue
- better communication
- opportunity for staff to ask questions
- awareness of training gaps
- hands-on managers
- helps with managing workloads
- awareness of expectations
- happier employees
- improved productivity
- easier planning
- a positive workplace
- better performance
Five steps for successful performance management
Based on the above definition by the University of Berkeley, here are the five steps every effective performance management process should entail:
1) Clarify expectations
Get into a habit of communicating openly what you expect from your staff. A written list of expectations and clear responsibilities goes a long way. They will appreciate knowing exactly where they stand and what needs to be achieved. Clear communication eliminates any uncertainties or guesswork, which ultimately boosts performance.
2) Identify goals
Work out what goals each employee has and how you can help them reach these targets. Every employee will have different goals and start from a different point, so make sure you actively listen and work with them to agree on appropriate goals.
3) Set objectives
Based on the defined goals, set some specific objectives the employee can work towards. It can be incredibly helpful to see some figures or concrete outcomes in black and white. This will allow your staff to focus on the agreed goals and apply strategies that’ll help them achieve these objectives. They’ll also enable you to provide targeted support to your staff.
4) Give feedback
Your employees may have questions about particular processes or raise certain issues with you that they’ve come across. This is an opportunity for you to share your opinion and give them individual feedback. What have they done well, and what could still be improved or tackled from a different angle? This is the sort of feedback that makes performance management so successful. Just remember to always balance constructive criticism and positive feedback.
5) Review results
Meet with your staff on a regular basis and review what they’ve been up to. Are they working towards the defined objectives? Do the numbers show that they’re on the right track? Some roles will be easier to evaluate than others. Employees with clear sales targets, for example, can be objectively monitored. Others may require a more subjective evaluation focusing on different parameters such as attitude and dedication or customer satisfaction measured through reviews or surveys. Either way, the employee (and the manager!) should walk away with a clear understanding of how they’re tracking.
Related: Tips for Business Communication During the COVID-19 Crisis
How does performance management differ from appraisals and one-on-one meetings?
Performance management is a much broader approach than performance appraisals or one-on-one meetings. Its goal is to improve how a company is performing, both on a team and on an individual basis. As part of effective performance management, the progress made towards achieving the company’s objectives is measured. This is done, in particular, through advance planning, followed by monitoring and evaluating individual and team results as well as the targets reached by the organisation as a whole.
Employee appraisals or evaluations usually happen only once a year and can include discussions about remuneration or bonuses. One-on-one meetings, on the other hand, are short check-ins between managers and their direct reports. They serve as an opportunity to discuss what’s going well at the moment and what could be improved. In contrast to both of these performance-related meetings between managers and their staff members, a performance management process is an ongoing strategy that consistently keeps employees up to date on how they are doing and holds them accountable throughout the year.
Ongoing process
The key to success is that performance management needs to be an ongoing process and cover the entire life cycle of an employee, from the day they join to the day they leave. Effective performance management ensures that employees’ activities and results align with the company’s overall business objectives. Employees feel heard and supported, and management can rest assured that everything is on track to achieving the desired targets. While it might be tempting to focus more on your in-house team, remember to regularly check in with your remote staff too!
Related: 4 Tips to Include Remote Employees
Communication skills
Following a consistent performance management strategy requires effective communication and listening skills. So it goes without saying that any manager must be an excellent communicator. Criticism should always be combined with praise and recognition, and challenging yet attainable goals should be clearly explained. This will help your employees to become better in their roles and lift the performance of the whole team. Your corporate results will ultimately benefit too! Studies have shown that, since the success of any company lies in effective communication, communication skills need to be developed on an ongoing basis.
Naturally, not all managers will be equally skilled or confident when communicating with staff. So it might be worth considering offering communication training for those in managerial positions who might benefit. Implementing a performance management process can take time, but using this approach can benefit your business. Not only will your employees be more satisfied and motivated, but your managerial staff will be better prepared to lead and support their teams. Follow the steps above to put in place a performance management process in your business or to check that your current process includes all the necessary steps.
