What is Performance Management?
Performance management is the collective of communication and review processes that attempt to capture, measure and evaluate the work of individual employees against their personal, pre-prescribed goals, as well as align them and their work with the organization’s larger objectives.
For employees to be happy, productive and engaged in their work, they want to know (1) how their work fits in the organization’s overall strategic plan and (2) how their supervisor views them and their contributions. These are the core needs of any engaged employee.
Performance management seeks to keep employees engaged and achieving optimally. When necessary, performance management will reinforce defined objectives with the employee and leverage coaching and mentoring tools and communication strategies to get and keep employees on course.
Key Features of Performance Management
Performance management differs from well-worn tactics of quarterly and annual performance reviews. The features and characteristics of performance management include:
- Ongoing communication – By using check-ins, updates and regular feedback loops, performance management is characterized as “frequent” or “continuous”. The point is to flip the dynamic of the traditional annual performance review as the penultimate judge of how an employee is doing to merely a summary of all the conversations and updates held throughout the quarter or year. This alleviates pressure on both manager and employee and eliminates ugly surprises and subjective appraisals.
- Focus on Action, Behaviors, Results – Effective performance management sets clear expectations around how success will be measured. This helps employees know what they have to do daily, weekly, and monthly and what criteria will be used to check how well they are performing.
- Link to larger strategic objectives – Employees seek meaning for their work in how what they do is related to the overall purpose of the business. Managers help connect the dots as to why what employees do matters in the greater strategic objectives of the business, the customers they serve, and ultimately how they make lives better.
Benefits of Performance Management
Although effective performance management processes require up front planning and discipline to carry out, they ultimately save time and achieve organizational and personal success with the following are benefits:
- Clarity – Employees and managers get frustrated by communication gaps, conflicting expectations of work to be done and quality of performance misperceptions. The clarity that performance management techniques offer and the frequency with which they are discussed can eliminate potential conflicts and disagreements.
- Cooperation – By employees and managers participating in the planning stage and defining goals and objectives, requisite knowledge and skills, job descriptions, work products to be delivered, and expectations about how to behave with clients, colleagues and supervisors, agreement, buy-in can occur.
- Motivation – With clarity of purpose and the job to be done, comes motivation. Employees will be able to self evaluate their performance at any stage and feel satisfaction and encouragement for work to be done and/or know when its time to redouble effort, ask for help, or seek out new resources.
- Remediation – All the psychological and energy-draining baggage that comes with severe warning, probations and corrections can be mitigated with the frequency of check-ins and clarity of tasks to be performed. Remediations come quicker and gentler and severe peaks and valleys are avoided.
- Flexibility – Strategies, needs and priorities can change quickly. Because of the frequency of performance management, goals and objectives can shift quickly without employee or manager feeling caught off guard. New priorities can be established and met faster.
Tools for Building Performance Management
Here are some of the fundamental tools for building a performance management system.
Current Job Description
It seems elemental but clearly defining titles, essential tasks and responsibilities of an employee’s job through an up-to-date job description removes confusion. A current job description will also include requisite knowledge and skills needed for the employee to be successful. This can reinforce what the employee knows or provide aspirational goals for skills and knowledge to be acquired.
Work Products to Be Delivered
What products and services should the job produce? Also, by what objectives and standards will the employee’s work be measured? Are measurements objective, such as volume of product produced, the number of inquiries managed or people supported? Or, are results more qualitative in nature. If so, are there ways to objectively measure those results via surveys, Net Promoter Scores, etc.
Processes and Methods
By codifying and clearly describing the processes and methods employees need to adhere to, it will be easier to understand how work products are or are not being completed. Defining methods and procedures also provides opportunities for improvement and innovation. Reports and records around resource allocation, budgeting and program prioritization can help define and finalize expectations. Checklists and rating scales can also be used to objectively measure the thoroughness of work done.
Impact on Organization
This measurement is tied to work products to be delivered. What is the value of those work products? Can they be tied to departmental or company KPIs, for example? If customer complaints are remediated faster, is there an impact on revenue, retention, churn, overall customer satisfaction and profitability? Fleshing out these measurements — even for functions not readily tied to objective measurements — will make all performance less subjectively critiqued.
Although more subjective in nature, setting agreed upon expectations for how employees interact with clients, colleagues and supervisors is key. This may be more of a discussion about attitude, promptness, etc. But managers can also seek out commendations and constructive or critical comments about the employee’s performance. Understanding and adhering to behavioral expectations also help reinforce company culture.
Development plans for mastering skills, acquiring new knowledge and overall professional development that go beyond the defined job motivates and inspires employees for the next stage in their career. This doesn’t necessarily mean training and certification. Development may be achieved through special projects and initiatives.