Why Performance Management is Critical to Business Success
On paper, performance management seems simple. Supervisors and managers engage their team members to review results, provide feedback, identify goals, and set objectives moving forward. Not only can this help develop your company’s talent pool, you can also be more confident that you and your employees are aligned to meet the ultimate target: business success.
Of course, performance management is easier said than done. There are various approaches, processes, and tools that you can use to monitor and analyse performance. There are also various ways to motivate employees and keep them invested. With an effective system in place, every member of your organisation will be putting in their best to propel things up and forward. Let’s take a look at how performance management has changed and why it continues to transform organisations into formidable institutions.
Why Have Appraisals in the First Place?
In a perfect world, all of your employees are ambitious, enthusiastic, and always exceeds expectations. However, things are far from perfect and even your best people may suffer from an occasional bout of lack of inspiration. Conducting appraisals signals to your employees that you support them, that you want to help them develop, and recognize them for their hard work. This will help keep your people at the top of their game as much as possible.
A strong performance management system means having regular performance appraisals, with metrics and targets that are continually monitored by the managers. This way, you can spot the consistently good performers and reward them accordingly. Moreover, you can also pick up on performance issues both from people and existing processes and therefore put address them immediately.
An Agile Approach
The most prevalent approach for performance management is the annual format. Conducted once or twice a year, this approach often gets tedious only because there’s too much information to work with. Both employee and manager will be more likely to forget details; the process also tends to generate a lot of paperwork.
By shifting to a more agile approach with frequent feedback, your people can feel an ongoing sense of development instead of being stuck. Allow your managers to set regular check-in meetings or consultations with their team members at their own pace. Just make sure that they follow a structure that can be properly monitored. In addition, remember to set realistic metrics and attainable targets with enough room to stretch to accommodate changes.
How Performance Management Affects Business Success
As mentioned earlier, conducting appraisals through a robust performance management system can communicate to your employees that your care about them. Regularly and actively engaging with them not only creates an atmosphere of trust and support. It also fosters a better relationship between the manager and the employee, and the employee can feel more genuinely connected with company. Engaged employees, of course, are more productive and are working more actively to achieve personal and company growth.
Performance management also means continuous improvement. You can spot not only opportunities for employee development, but also organisation-wide improvements. Therefore, you can create an environment where everyone and everything are aligned and working seamlessly toward the achievement of your business goals. If you have a broken or ineffective performance management system, you end up squandering growth potential.
Finally, performance management helps create clarity. If your employees understand what’s expected of them and what their individual goals are, it becomes easier for them to work and become more invested. They can even be motivated to set goals of their own and apply more discretionary effort. Wouldn’t it be nice if most if not everyone in your organisation worked above and beyond what’s required?
Getting the details of performance management right requires careful balance. Because company cultures are different, there’s no single effective formula. However, there are critical elements that you can’t miss. Clear goals and metrics, transparency, sustainability, and dialogue are among the most important. Keep in mind as well that rewards for good performance are arguably a better motivator than penalties for poor performance.
Maintaining a healthy and effective performance management system is hard work, indeed. But once you get it right and keep it going, it will lead you to continuous improvements that start from the bottom up, and continue toward business success.