To say that performance management is important would be a massive understatement. Businesses of all kinds do it, and it’s essential for getting the most out of your people. So, what is performance management and how can it change the ways your employees work?
- Why you need performance management
- Key elements of employee performance
- Top benefits of effective management
- Tips to improve performance management
- Performance management use cases
As a G2 leader for performance management software, we can easily answer that question. Performance management is the strategic process of monitoring, evaluating and improving employee performance. This usually involves some means of goal-tracking and feedback delivery.
In theory, this helps employees identify areas for improvement and develop over time. That said, bad performance management isn’t much better than none. This is why employee performance strategies have evolved over time.
Traditional performance management relied on the annual performance review, a methodology with a reputation for being ineffective, untimely, and despised by HR, managers and employees alike.
Plenty of businesses still use performance reviews, but modern practices support it with ongoing, continuous feedback and support. Modern reviews may be more regular, or serve as a capstone to feedback throughout the year.
Why you need performance management, today
Performance management and goal-setting play an essential role in keeping organizations running smoothly. For one thing, they’re both absolutely vital for increasing productivity. Performance management helps employees to complete assigned tasks more effectively, while goal-setting ensures they’re pointed in the right direction.
Besides productivity gains, it is an important part of your strategies for employee engagement and retention. When done well, it develops employees and helps them advance their careers. It shows employees there’s room in your business for them to grow, and that they matter to you.
Along with goal-setting, performance management helps to keep employee efforts aligned with organizational objectives. This ensures that none of your various teams and resources are working against each other.
The key elements of effective performance management
What is performance management worth if it’s poorly executed? The answer is, very little. Here’s what you need to bear in mind when it comes to performance management and employee development:
- Goal-setting frameworks: Having clear objectives helps employees to focus their efforts productively. Two popular examples of goal-setting frameworks are SMART Goals and OKRs. The former breaks projects down into tasks, while the latter connects team goals with business objectives.
- Continuous feedback: Feedback is most effective when delivered in a timely manner. Asynchronous employee check-ins are quick and non-disruptive, and serve as a way to monitor both engagement and performance.
- Recognition and visibility: If you want to get the most out of your people, they need to feel valued. Employee recognition positively reinforces their strengths, while visibility tools promote appreciation across your whole business.
- Data-driven insights: To be effective, feedback and support have to be data-driven. That’s why you need analytical performance insights. Well-sourced and visualized data helps you both assess individual needs and pinpoint commonly experienced productivity blockers.
While this may sound complicated, if you can successfully pitch new performance management software to senior leadership, it’ll all be a walk in the park.
Top benefits of continuous performance management
We’ve established the most important elements of performance management, and why you objectively need it. Now, let’s look at the benefits for an idea of what you stand to gain.
Real-time guidance and adjustments for employees
For feedback to be effective, the other person needs to clearly remember the inciting incident. So, whether you prefer to handle performance management in Microsoft Teams or in-person, you need to deliver feedback in a timely manner. This is one of the main ways traditional performance management fails to be effective.
This cuts both ways. You need to check in with employees so they can supply feedback about their experience. If someone’s workload is causing them to burn out, fix it. If someone requests more ergonomic equipment, supply it. Delaying reasonable adjustments shows your people you don’t care.
Stronger manager-employee relationships
Another issue with isolated, annual performance reviews is that they distance managers from their employees. Having more regular performance conversations (whether they’re asynchronous or not) helps to build a dialogue.
Not only does this help managers make more informed decisions, it strengthens employee trust and loyalty.
AI-enhanced decision-making
Effective performance management relies on data. Unfortunately, the amount of employee data generated by your average business is too much for one team of HR analysts to contend with manually.
Performance management software with AI algorithms can process vast quantities of data far faster than human analysts, picking up on trends that we could easily miss. This allows your team to scale their efforts to thousands of employees.
How to implement better performance management
You might still be wondering, “What is performance management meant to look like?”
If that’s the case, here are some simple steps to improve your process. Bear in mind, these are easier if you use a dedicated performance management platform like Perform365.
Introduce employee check-ins
Employee check-ins combine regular progress updates with personalized micro-surveys assessing engagement, wellbeing, and productivity barriers. Check-in tools like ours take only minutes to complete, making them easy to schedule. With a weekly check-in, you don’t have to wait until review season to offer guidance.
Deliver continuous feedback and recognition
With continuous feedback, you don’t have to worry about when to manage performance. All you have to do is prepare to review your employee’s next check-in update. You should also be sure to regularly offer employee recognition, whether based on your own insights, or the peer recognition from your people.
Leverage performance data analytics
What is management good for if you act based on assumptions? Always make decisions based on cold, hard data. Whether it’s from 360 feedback, goal-tracking updates, performance review conversations, performance data analytics are a valuable source of insights.
Examples and use cases
Practically every business can benefit from effective performance management practices. From businesses with major health and safety priorities, like healthcare organizations and restaurants, to those trying to deliver the best customer experience, like hospitality and retail.
For a real world use case, let’s look at one of our clients, Eastern Suburbs Sydney HR. They’ve had great success introducing our Human Success Platform to their clients. By providing tools like our employee check-in, performance conversation admin, SMART Goals and OKRs, they’ve managed to help numerous start-ups and small businesses enhance their performance management.
Unlock the power of continuous performance management – Download your free eBook!
Discover how to build a culture of continuous feedback and performance improvement. Learn practical strategies to track progress, foster growth, and boost employee engagement all year round! Read this guide to move away from outdated annual reviews and embrace a more dynamic approach to managing performance.
Download your free copy of “Embracing Continuous Performance Management” and take your team’s performance to the next level.
