At Exude, we believe that Performance Management is a system that’s all about setting teammates up for success. Yes, the obvious places to focus on are goal setting and performance check-ins, but the reality is that every communication a supervisor has (or doesn’t have) with their team member is part of the performance management system. Just as infrastructure brings any city or suburb to life or to a halt, so to is performance management a vehicle for bringing out the best in people.
How to Develop a Performance Management System
A performance management system involves more than just annual employee reviews. Rather, it’s a frequent communication process focused on helping your employees achieve their full potential. Developing the right performance management system for your business involves:
- Performance management assessment: Evaluate your current performance appraisal process and determine whether you should make any changes to your feedback process or frequency.
- Goal identification: Your performance management system should help rally your employees around your company goals. Take the time to clearly identify these goals and communicate them to your team.
- Performance expectations: Clearly define what’s expected from each employee and create measurable objectives to determine their success.
- Regular meetings: Schedule regular check-ins so managers and employees are actively engaged in discussing progress and identifying potential roadblocks throughout the entire year.
- Transparency: In the best performance management systems, all employees understand your organization’s overall performance and how they contributed to it.
Why Is a Performance Management System Important for Your Business?
An effective performance management system is essential to your business. It helps align your employees and resources to meet strategic business objectives. It lets you identify potential issues and allows managers to make necessary adjustments to keep everyone on track.
An effective performance management system can also give your business a competitive edge. It helps ensure your operations are running as smoothly and efficiently as possible, increasing employee engagement and business outcomes.
What’s more, a good performance management system will help your employees understand how their contributions impact business growth, helping them feel a greater sense of connection to your business objectives.
Benefits of Performance Management Systems
An effective performance management system benefits the employees, management and company. Using a performance management system helps your business:
- Identify training needs: A performance management system helps you determine whether employees need training and in what areas.
- Be consistent: A performance management system ensures you implement consistent practices and standards across teams and managers.
- Motivate employees: Objective, transparent performance appraisal processes and rewards can motivate employees to work at their best.
- Increase employee retention: A performance management system ensures job expectations are clearly defined and fosters communication. Employees are more likely to stay when they understand what’s expected of them and receive regular feedback and rewards.
- Streamline workforce planning: Discussing current and future workloads with staff can help management prioritize tasks, evenly distribute work among current employees and identify job requirements for future workers.
Key Principles for Performance Management Systems
For us, there are 5 key principles to building successful Performance Management systems:
- Start with the intent to set others up for success; the vast majority of people come to work wanting to do a good job.
- You can’t expect something until you’ve first communicated it, and a best practice is to put things in writing.
- Inclusive and open communication means two-way dialogue to drive ownership and accountability.
- The What, the How, the When and the Why are all equally important in rallying teams around common goals.
- If performance isn’t working, the best leaders first look at themselves before pointing a finger at their team members.
Every scope of work for performance management can look a little different. At Exude, we focus on listening first before deciding on an approach. We aim to meet your organization where it’s at and then, work to pace the movement forward. Whether you are using loose leaf and a pen or an integrated HRIS, we can work to activate a PM system that aligns goals, integrates culture, drives inclusion and equity, as well as increased productivity. The process begins with an inventory of current practices accompanied by several discussions (interviews and/or focus groups) to understand the PM culture.
Key elements of PM system that create significant aspects of an employee experience (EX):
- Performance plans and cascading goals
- Culture/values and behavioral expectations
- Coaching model and accountability systems
- Individual development plans
- Rewards and recognition
Our consultants have rich experience in driving culture, inclusion and productivity with PM system upgrades. We engage leaders of people as well as employees to understand what will resonate and then define scalable opportunities to grow individuals, teams and organizations.
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