Getting Started with Performance Management: Essential Tips & Steps

Performance management is much more than just a replacement term for the traditional appraisal process and has a much broader spectrum.

In the age of instant feedback - where ratings and reviews drive many of our daily decisions - the annual employee review can be considered antiquated at best.

Twelve months is a long time in business, and yet many people take so much time to give their employees real feedback. This often inhibits an employee's potential, to the detriment of both the individual and the company.

There is an approach that continuously, sincerely and consistently supports the development and growth of employees - even before they join the company.

This approach is called performance management.

What is performance management?

Performance management starts with clear job descriptions and hiring processes to help you get the right people on board, as well as onboarding programs to help them get started.

It is a framework that helps employees perform and reach their potential and creates an environment in which they can thrive.

Once they're in the job, it means a never-ending cycle of training, coaching and feedback. Every interaction between manager and employee becomes a learning experience and an opportunity for the employee to be heard.

This mentality is the foundation of a performance management strategy. Recognizing that feedback and guidance is not something that should happen every year, but is an integral part of your employees' daily experience.

Progressive companies today take a more continuous approach to managing, motivating and rewarding good performance. Research shows that 74% of managers who effectively coach and develop their employees consider a performance management system to be effective. 62% of them say their company's performance is better than their competitors (Mckinsey, 2018).

Of course, implementing such an approach will take time. In this blog we'll look at how you can take the first steps in the right direction.

1.Define your goals

Performance management is a very broad term, and no company will implement it in the same way.

To set your strategy, it's important to have clear goals in mind that go beyond "helping employees perform better."

Improving morale or increasing productivity obviously impacts the bottom line, but without a clear goal, success is difficult to measure.

Therefore, you should set and document clear goals that can be tracked. This could be specific financial goals, better employee retention, or higher satisfaction scores in customer service surveys.

Ultimately, your performance management program should be aligned with your company's strategic goals.

2.Communicate the benefits

A performance management program can promote the development of employees' skills and encourage them to achieve their potential. However, it's important to realize that employees may perceive your intentions very differently.

Employees may view the continuous coaching ethos as micromanagement or perceive the added focus on performance as added pressure. Managers themselves may also be worried about how to fit more regular catch-up appointments into their already busy schedules.

Communicating your plans and goals clearly and honestly will help employees accept the new approach. Explain exactly what changes you are making, why you are making them, and what they will mean for the individual going forward.

Remember that performance evaluation is linked to salary from the employee's perspective. So be aware of how this will impact raises and promotions.

If you move away from annual performance reviews, the first question employees will ask is, "When will our salary be reviewed?"

3.Train your managers

It is generally accepted that a modern leader can only be successful if he is able to coach. But that doesn't mean that every manager has the natural ability to do this.

If you require your managers to make feedback and coaching an important part of their relationship with their employees, you should give them the confidence and skills to do so.

Think about how you can train your managers, whether in workshops or one-on-one sessions. How can you use this time to further communicate the benefits of your performance management program?

4.Take advantage of technology

Perhaps the most fundamental first step toward efficient, effective performance management is finding the right technology to support it.

Many cloud-based HR platforms offer performance management features to help design and support your new, improved processes. Integrated workflows and goal-setting features are designed to continually manage performance and motivate.

Goal setting features typically allow you to set and communicate goals at both the company and employee levels. This helps keep the individual engaged in their work by regularly updating goals.

Customized schedules and automated reminders can help keep both managers and employees informed with regular follow-ups.

Performance management: why should you do it?

Performance management frameworks are already delivering positive results for users and are encouraging more and more companies to rethink their approach to employee reviews.

Don’t just implement a performance management plan for its own sake. It is important to set clear goals and monitor ongoing success.

Finally, in the culture of performance management, even your performance management program itself can benefit from constant feedback and review...

Incorporating training and technology elevates performance management. Continuous feedback ensures ongoing improvement. Try IceHrm for streamlined processes.