All You Need To Know About Performance Management in HR

All you need to know about Performance Management in HR

Performance management is changing. The processes of the past, where the performance targets were set once a year and reviewed again at the end of the year, are dying out. The companies realize that these systems require a lot of work and are not linked to the employees' commitment and performance. In fact, they often require employees and managers to set year-long goals that become obsolete in the months between the actual evaluation and setting of the goals. They can also have a demotivating effect when employees perceive the process as threatening or irrelevant.

This is the reason why we are facing a major change in terms of goal and results management - a change that makes it modern, engaging and transparent - and which is linked to many other changes in how employees are led and exposed to learning in a digital world. In this article, we'll cover the basics, some steps to effective performance management, and what you should look for in a performance management platform.

What is performance management?

Performance management is the continuous communication process between managers and employees, with the common goal of achieving the company's strategic goals. It is the basis for employee performance and engagement in any organization that wants employees to reach their maximum potential and increase productivity and success.

The process - which often combines both oral and written components - takes place throughout the year and usually culminates in an annual performance evaluation. This entire communication process involves defining clear, specific expectations, setting goals, establishing goals, providing ongoing feedback and evaluating results.

Next-generation performance management is not about setting annual goals, but about setting personal goals for employees, which change as dynamically as the business. This is not only adapted to the dynamic changes in the business, but also provides employees with real-time feedback on how they are performing, allowing them to self-correct and gain a sense of accomplishment (just like a fitness tracker).

Procedure for performance management in HR

We have now covered some of the basics, and will now move on to the various steps for effective performance management in HR. Generally speaking, performance management is a cycle consisting of three main elements:

1) Planning of achievements

It is crucial to prepare in advance. The first step is to set goals and objectives, which is the goal the employees want to reach, and which marks the desired state they want to achieve. Each individual employee's goals should support and be in line with the organization's goals, and the more detailed the performance planning is, the greater the chance that the goals will be achieved. This helps the employees to understand what they should spend their time on, and how they should distribute their efforts between special tasks and work tasks. When this step is completed, both employees and managers should be fully aware of the time frames, what is the expected result and how success will be measured.

2) Performance coaching

The main purpose of this step is to provide regular feedback on performance throughout the year, while providing guidance and support and coaching employees so that they can change their performance and increase their skills where necessary. All employees are different - they may have different tasks, other skills and need support in other areas. Managers must therefore be aware of the employees' different needs and guide them in a way that meets their personal needs. This step is extremely important to empower your employees, maintain an encouraging dialogue with them, and capitalize on their success.

3) Performance evaluation

Part of the employee interview is giving feedback. This should include both recognition of the employee's strengths and a discussion about which challenges require improvement and more coaching. After this has been done, new plans can be made for further development. These plans should be clear and measurable - they actually represent the beginning of the whole process all over again.

Note that next-generation systems focus on real-time feedback. Instead of tying the performance review to the salary review every year (thereby missing the opportunity to allow employees to reflect on their performance in real time, course correct and daily check what is required of them), next-generation systems provide real-time feedback.

How can managers implement a successful performance management process?

As you can see, the process of performance management is quite long and consists of many elements that must be taken into account. In addition, it must be carried out simultaneously with each individual employee in the organisation, at the same time that each employee has different individual goals and characteristics. Especially in large organisations, it may therefore be necessary to use a platform that supports the process and helps managers manage it from start to finish. Systems for HR Performance Management enable managers to track and monitor the performance of both the individual employee, the departments and the organization as a whole.

What should you look for in an HR Performance Management platform?

The segments of the performance management platform form the framework within which employers and employees work. Each component has its unique purpose, and together they form the structure that ensures that employees are given the necessary keys to understand and achieve their goals.

When choosing a performance management software or platform, make sure it addresses these key components:

• Clear measurements

According to the specific role, the ongoing assignments and the current position in the employee's journey, each employee should be given their own key indicators (so-called KPIs). Clear measurements that are adapted to the individual employee are essential for her to understand the manager's expectations, and for the manager to be able to monitor the employee's results and achievements. Personalization is very important, since the goals must be relevant to the individual employee to ensure employee engagement.

• Tools for engagement

A successful performance management system should integrate performance improvement with employee engagement to ensure that employees are committed (and motivated) to development and advancement. There are many ways to create engagement. For example, Microsoft has used gamification to increase the performance and engagement of its call center agents.

• Knowledge

Employees should acquire the skills and knowledge required to perform the job and achieve the objectives as expected, and this can be confirmed through learning and development activities. Ideally, learning (daily micro-learning) should be integrated into the system.

• Feedback and recognition

Recognition is an important part of performance management, as it is an integral part of the employees' emotional experience of the work and an important driving force. It is important that the employees get an internal motivation that lasts, and that they do not focus on the vanity of winning a prize.

• Analysis

For performance management to be effective, managers must have access to accurate data according to the set objectives. They should be able to see the data at any time so they can set the right goals for success. The performance management software should analyze and help the managers to reason and evaluate the employees.

In the evolving landscape of HR performance management, IceHrm stands as a key player, revolutionizing the approach with its dynamic and user-centric platform. Embracing real-time feedback, personalized goals, and comprehensive analytics, IceHrm paves the way for modern, effective performance management.