Performance management is one of the most important processes your company can implement. Show It helps train employees, develop their talent, improve their relationship with their manager, and take on more responsibility within the company. When that effect is multiplied by the entirety of your workforce, it creates a lasting impact on your company. A good performance management process won’t reduce your turnover rate to zero, but it will help achieve goals, improve collaboration, and keep employees engaged. Here’s what it looks like. What is the performance management process?The performance management process is an ongoing series of meetings and check-ins between a manager and employee that plans, monitors, and reviews the employee’s objectives, long-term goals, and overall impact on the company. While it is often thought of as an annual or bi-annual performance review delivered from management to an employee, performance management is at its most effective when it is performed throughout the year in a collaborative manner. We know it as Continuous Performance Management.
What are three stages in the performance management process?While comprehensive as a process, performance management can be broken down into three distinct stages: coaching, corrective action, and termination. Coaching: The coaching stage of performance management sets the tone for your company and the success of your employees. Coaching involves training, outlining standards and goals, two-way feedback, and collaboration to help employees get better. More on this later. Corrective Action: If an employee isn’t meeting the standards and expectations of the position after coaching from their manager, the next stage of performance management is corrective action. Corrective action calls on the manager and employee to work together to find the reasons for poor performance and develop a plan to improve the situation. Termination: If coaching and corrective action fail to improve an employee’s performance, the final stage of the performance management process is discharging the employee. While a difficult decision to make, the termination can have a positive effect by boosting team morale and offering you a chance to improve at that position.
What are the steps in the performance management process?When your performance management process is humming, it’s largely remaining in the coaching stage. That’s not to say every day is roses, but it means the team is responding to challenges in the moment with coaching and collaboration – and performance isn’t suffering drastically as a result. A successful coaching stage consists of four main steps: planning out goals, monitoring performance, reviewing results, and rewarding success. Planning: This step calls for establishing expectations and developing a strategic plan for employees. Here you should set S.M.A.R.T goals, determine deadlines, and make clear how they will impact the team and the entire company. Monitoring: Crucial to achieving goals is consistent monitoring of progress. You don’t want to be a helicopter manager, but you do want to frequently check in with employees to help work through problems as they arise. Whether it’s weekly, bi-weekly, or monthly, consistent check-ins keep employees and managers working together and on the same page. Reviewing: With frequent check-ins, performance reviews turn into more of a formality rather than an intensive process. This is the official place for employees and managers to share their view on how the year went and look back on the progress and achievements. Rewarding: Nothing plays a bigger role in employee motivation than this. Rewarding employees for their efforts and achievements throughout the year, not just once at the end of it, lets them know their talents are appreciated and encourages them to continue to perform at a high level. Inadequate rewarding can leave them discouraged, unappreciated, and looking for a new job.
What are the key elements of performance management?Every company may have unique aspects to its performance management process, but as Jo Rosser points out, in general, every company with a good one keeps these core traits in mind: Consistency: Coaching approaches and tactics may vary, but the performance management process should be the same for everyone. Inconsistencies will only add confusion and frustration. Accuracy: When recording key outcomes throughout the performance management process, accuracy is essential. If need be, you want your documented record of events to be an unimpeachable account, not an inferred one. A tool like Conversations® keeps all those details in one place. Futureproof: Futureproofing your performance management process doesn’t mean peering around every possible corner, but rather, prioritizing agility. So as circumstances change, you can too. Employee engagement: Performance management is at its best when it is a two-way street with employees and managers working together. Engaged employees at all levels will improve the process itself by helping companies strengthen their coaching and avoid corrective action and termination. Ease of use: Part of keeping employees engaged in the performance management process is making it an easy system for them to use. Hurdles or cumbersome steps in this process won’t help the employee or the company. A performance management process is just that – a process. It’s not a checklist or a passive responsibility; it requires active participation on behalf of employees and managers. The result is aligned teams, inspired employees, and a culture that nurtures personal growth and development, i.e., an effort that is well worth it. Discover how Conversations® can fuel your Continuous Performance Management strategy. Let’s go RELATED POSTS Back to Basics: What Is Social Recognition? Back to Basics: What Is Employee Turnover Rate? Back to Basics: What Is Employee Recognition? Topic(s): About the Author Mike is a senior content marketing specialist at Workhuman where he writes about the next era of the workplace. Outside the workplace, he’s an avid gardener, a frequent biker, a steadily improving chef, and a fantasy sports fanatic. Skip to Content
In addition, the performance management process is often time-consuming, with managers rummaging through old e-mails to inform the evaluation. And if you’ve ever worked at a startup, a young, eager CEO might have instituted extensive 360-degree employee reviews, which required everyone to spend days developing in-depth evaluations of people up, down, and across the organization. Meanwhile, some startups use no employee evaluations or performance assessments at all. Regardless of the approach, the COVID-19 pandemic left people and managers without direct interaction for months, making it hard to imagine any kind of effective system for performance reviews in the current business landscape. That’s why it’s time to put conventional thinking in the rearview mirror.
The performance management process consists of a series of stages where managers and employees manage goals, monitor performance, and assess outcomes. Traditional performance management systems follow a typical cadence of quarterly, bi-annually, or annual reviews. A continuous performance management model is about using performance technology to set and track goals in an open and efficient way in real time and to support ongoing coaching, feedback, and alignment as priorities shift over time. The process is ongoing. Once complete, existing and new employee goals are identified and the cycle begins again.
Performance assessments can be of great value to everyone since a robust and integrated system can increase employee engagement and therefore improve business processes and outcomes. It’s just a matter of rethinking performance management not as an atrophied muscle to flex once every six months, but one that can be exercised all the time and, ultimately, make everyone in the organization stronger. That starts not with rethinking performance reviews, but with the entire concept of performance goals. Goals should cascade down from the top and be visible to everyone. In other words, a manager might have a set of goals and each direct report will have a set of objectives that ladder into each of the manager’s goals. In a system of continuous performance management, when a person completes a goal it’s simply checked off in the system, so colleagues and the manager know that that piece of the goal puzzle is complete. Cascading goals can be updated or adjusted depending on a change in strategy or response to disruption. And, best of all, come review time there’s quick and full visibility in terms of who accomplished what and when. In other words, improving performance management shouldn’t be so much about reinventing the process of reviewing, but the process of setting and accomplishing goals. Help ensure employee and team goals are aligned with overall company objectives to maximize organizational success.
Of course, evolving performance-review thinking isn’t accomplished overnight. Here are 10 straightforward tips for how to improve the performance management process. Evolved thinking and embracing a new, effective, agile process requires a system that can support it. The alternative of using outdated, ineffective, and inefficient systems – or doing nothing – isn’t a viable option either. Companies that can tie a better performance management system to better business results will quickly separate themselves from those who chose complacency over the status quo.
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Performance management is the process of a manager and direct report aligning on a set of goals, as well as how the employee should be measured against those targets. As such, it’s critical that a person’s goals be SMART (specific, measurable, achievable, realistic, and timely) and that the manager and employee meet regularly – quarterly, every six months, or annually – to determine how effective the person has been at reaching the agreed-upon goals. It's also important that, when goals have not been met, both the manager and employee agree on what changes need to be made to improve performance. Along with regular meetings and agreements on goal setting and adjustments, employees and managers should review and agree on specific tactics that should be taken in order to achieve each goal. It helps when goals clearly ladder up to larger corporate objectives so people understand what they’re working toward and why. Perhaps the most important element of the performance management process is the review, at which time an employee is assessed against their goals. It’s critical that brief assessments occur at regular times throughout the year, with a full employee review taking place after 12 months’ time. Along with a measurable assessment, other factors should come into consideration as well, such as agility, creativity, and collegiality. Another key element of the performance management process is to set new objectives for the future after the year-end review is complete. As with the previous year’s goals, the new set of objectives should be SMART.
Technology is essential to the performance management process in three key ways: transparency, efficiency, and equity. It’s also scalable and flexible over the long term. That is, as the organization’s broader objectives evolve over time, a technology-based performance management process can evolve with it. Technology also allows for malleability, meaning that the framework for performance management in the IT and marketing divisions might be the same, but the metrics and types of goals assessed might be different. A technology-based performance management process allows organizations to meet the needs of individuals and functions alike, all while maintaining those key elements of transparency, efficiency, and equity along the way.
A performance management system tracks the performance of employees in a manner that is consistent and measurable. The system relies on a combination of technologies and methodologies to ensure people across the organization are aligned with – and contributing to – the strategic objectives of the business.
A continuous framework to performance management is about using performance technology to set and track goals in an open and efficient way in real time and to support ongoing coaching, feedback, and alignment as priorities shift over time. Learn more about this performance management strategy. Back to top |