Performance Management

 

Performance Management – Definition

“Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization. The communication process includes clarifying expectations, setting objectives, identifying goals, providing feedback, and reviewing results”.(Berkeley, 2022)

Importance of performance management

Employees who are productive are the most valuable asset since they assist the company achieve its goals. Companies must have strong strategies in place to develop, motivate, and engage employees in order to get the most out of them to meet company goals. When it comes to getting the most out of your employees, performance management is crucial. (Foulis, 2021)

Managers can use performance management to appropriately address issues and make the right decisions at the right time. It will also assist in making decisions about the organization's recruiting and training processes. Another significant benefit of performance management is that it boosts employee morale and makes them feel heard and respected. (Reitsma, 2021)

Benefits of performance management

The following are some of the reasons why continuous performance management is critical for every business. (White, 2021)

·         Provides a Look into the Future

·         Helps Create Development and Training Strategies

·         Provides Clarity in the Organization

·         Provides the Opportunity for Exchanging Feedback

·         Increases Employee Retention

·         Boosts Employee Engagement

·         Encourages employee recognition and reward

·         Helps in boosting employee productivity and engagement

·         Helps to enforce goal setting and achievement

·         Offers mentoring for increasing performance

 

Performance management cycle

The performance management cycle model was initially published in the book "The Practice of Management" which was written by Peter Drucker in 1954.

Throughout the year, all employees of the company go through this cycle. It begins at the beginning of the year with the establishment of performance goals, and continues with ongoing progress monitoring and staff development, ending in a formal evaluation. There are few vital steps of performance management cycle. (Vulpen, 2022)

 

Figure 01: Performance management cycle. Source (Vulpen, 2022)

 

Top principles of performance management

Most people believe that performance management is a once-a-year process that a company follows, however performance management is a continuous activity that occurs throughout the whole year. It should be in line with the corporate goals as well as employee productivity. Then it's simple to identify weaknesses, take appropriate action, and establish strategies in place. Some performance management principles are critical for achieving intended goals. (Pocket HRMS, 2022)

ü  Transparency

ü  Set right goals

ü  Be specific

ü  Measure

ü  Communication

ü  Give feedback

ü  Use right tools

ü  Motivation

ü  Praise

 

Future of performance management

Most businesses require real-time data in order to identify performance gaps and enhance employee capabilities, and they do not want to wait until the end of the year to do so. The idea is to conduct performance reviews in a way that improves individual and team performance while remaining aligned with organizational goals. (Lalwani, 2020)

Ø  Annual performance management is going out of style

§  Taking a continuous approach to performance management.

Ø  One-on-one feedback is gaining importance

§  Continuously gathering staff feedbacks & evaluating performance

Ø  Performance management tech is becoming more mainstream

§  Digitization/Technology involvement

Conclusion

It is critical that the organization take the appropriate steps to identify staff performance gaps and provide training to help them develop their competencies. This will be benefitted by both the employer and the employee, as the employee's productivity level will determine whether the company achieves the organization's end goal. A strong performance management system would help engage your staff in the goal-setting process of your company.

 

References

Berkeley, 2022. Berkeley People & Culture. [Online]
Available at: https://hr.berkeley.edu/hr-network/central-guide-managing-hr/managing-hr/managing-successfully/performance-management/concepts
[Accessed 30 April 2022].

Foulis, D., 2021. 7 benefits of performance management. [Online]
Available at: https://www.ideagen.com/thought-leadership/blog/7-benefits-of-performance-management
[Accessed 30 April 2022].

Lalwani, P., 2020. What Is Performance Management? Definition, Process, Cycle, and Best Practices for Planning. [Online]
Available at: https://www.toolbox.com/hr/performance-management/articles/what-is-performance-management/
[Accessed 30 April 2022].

Pocket HRMS, 2022. Top Principles Of Performance Management. [Online]
Available at: https://www.pockethrms.com/blog/top-principles-of-performance-management/
[Accessed 01 May 2022].

Reitsma, T., 2021. Why Is Performance Management Important. [Online]
Available at: https://peoplemanagingpeople.com/articles/why-performance-management-important/
[Accessed 30 April 2022].

Vulpen, E. v., 2022. A Guide to the Performance Management Cycle. [Online]
Available at: https://www.aihr.com/blog/performance-management-cycle/#:~:text=performance%20management%20cycle%3F-,The%20performance%20management%20cycle%20is%20an%20annually%20reoccurring%20phenomenon%20in,%2C%20developing%2C%20rating%20%26%20rewarding.
[Accessed 01 May 2022].

White, D., 2021. Importance of Performance Management in an Organization. [Online]
Available at: https://www.techfunnel.com/hr-tech/importance-of-performance-management-in-an-organization/
[Accessed 30 April 2022].