The central challenge in developing and sustaining a corporate performance management system is, therefore, making it everyone’s business. Unless all staff and members actively pursue and support the principals and proposals outlined herein, the Company will be unable to ensure achievement of its aims and unable to demonstrate that it is delivering high quality and value-for-money services. Whilst securing comprehensive “buy-in” to the proposals will take time and sustained effort, it is a challenge which must be met.

In today’s workplace, performance improvement and the role of performance management is a very important topic.
Business pressures are ever-increasing and organizations are now required to become even more effective and efficient, execute better on business strategy, and do more with less in order to remain competitive.
While we clearly understand the importance of optimal performance management, we often face significant internal obstacles. When someone mentions performance management or reviews at the organization, what is the typical response? Do employees and managers alike cringe? Do they avoid performance management related tasks? Do visions of tracking down incomplete appraisal forms come to mind? This can be changed.
Forward thinking companies are taking steps to successfully address this negative view of performance management. They are implementing innovative solutions that ensure processes deliver real results and improve performance.

Frequently when performance management is mentioned, people think of the yearly performance review. Performance management, however, involves so much more. Properly constructed appraisals represent a summary of an ongoing, year-round dialogue.

An effective performance management process in the company enables managers to evaluate and measure individual performance and optimize productivity by:
• Aligning individual employee’s day-to-day actions with strategic business objectives
• Providing visibility and clarifying accountability related to performance expectations
• Documenting individual performance to support compensation and career planning decisions
• Establishing focus for skill development and learning activity choices
• Creating documentation for legal purposes, to support decisions and reduce disputes

Many of the practices that support performance also positively impact job satisfaction, retention and loyalty. The recommended practices include:
a) Delivering regular relevant job feedback
b) Setting and communicating clear performance expectations
c) Linking performance to compensation clearly
d) Identifying organizational career paths for employees
e) Evaluating performance and delivering incentives in a fair and consistent
f) Providing appropriate learning and development opportunities
g) Recognizing and rewarding top performers

What will be the impact of a not very well structured performance management process in the company?

If individual goals are not aligned with business strategy, then time and resources are wasted. Low employee engagement levels may mean that individuals are not performing at their best. Inconsistent evaluation criteria and rewards can lead to mistrust, lower productivity and higher attrition. If top performers see no differentiation in performance ratings, opportunities and compensation from underperformers, morale can suffer.

Management “buy-in” is equally important to the performance management process. If management does not understand the importance and value of the process, it can lead to consistently late or incomplete appraisals, mistrust, avoidance of performance discussions, and a lack of honest performance-related discussions. Often our managers may feel unprepared to deliver quality feedback and oversee effective performance discussions.

“Setting the Goals”

Regular goal tracking allows for the opportunity to provide feedback as needed, make adjustments to performance plans, tackle obstacles and prepare contingencies for missed deadlines. Without a mechanism to regularly track progress against goals, the ongoing, cyclical nature of the process falls apart.
Goal progress discussions, along with all performance feedback, should be delivered with respect and should be objective and supportive. Specific examples provide clarity and help our employees to focus on their future improvements. It is crucial that the manager listens to the employee’s perspective and incorporates the employee’s observations into future plans – the employee often experiences roadblocks the manager may not see.

“Clear Information”

Gathering performance information from a variety of sources increases objectivity and ensures all factors impacting performance are considered.
Objectivity is essential when evaluating performance and it begins with clarity about job expectations and evaluation methods. Certain checks and balances can be built in to ensure objectivity. The managers commonly make mistakes when they conduct evaluations and the first step to minimizing those errors is to acknowledge they exist. Consistent processes organization-wide contribute to fairness and objectivity. Access to information allows others to check the validity of the process. Obviously, not all employees need access to other employees’ performance appraisal results, but processes like calibration meetings will help ensure consistency. In the calibration process, managers with employees in similar positions meet and discuss the appraisals before they are finalized and shared with the employees. A calibration meeting helps establish the reasons individuals are awarded various performance rankings educates managers about the process across the organization and promotes consistency. It also provides validation for manager’s decisions, if appropriate.

“The well trained manager”

Managing the performance of another individual is not an easy task and requires many skills.
Training may be required to ensure managers feel adequately prepared to effectively complete all the tasks related to performance management. This is especially the case for newly promoted supervisors. Managers need to understand human behavior, how to motivate, how to develop, provide coaching and deal with conflict. To a great extent, managers must be observers and able to assess a situation, provide motivation and identify problems that interfere with performance.

A manager who feels adequately prepared to provide and receive feedback, set SMART goals, deliver a performance evaluation and conduct a performance evaluation meeting will be a major contributor to a successfully functioning process.

Strategic business objectives

The primary reason to make sure performance management processes are functioning properly is that these processes tighten the link between strategic business objectives and day-to-day actions. Effective goal setting (including timelines), combined with a method to track progress and identify obstacles, contributes to success and bottom line results. Regularly tracking progress against performance goals and objectives also provides the opportunity to recognize and reward employees for performance and exceptional effort, contributing to job satisfaction and productivity. Employees want to feel successful, to do well at their job and feel they are making a valuable contribution. In order to ensure this happens, employees need a clear understanding of individual goals and how they fit into the larger organization.

Clear visibility, regular individual analysis, and company-wide performance assessments help identify corporate competencies and skill gaps. With this valuable data in hand, our company can identify training and development plans.

When effectively implemented, performance management best practices result in a wide range of benefits for employees, managers and company.