Pay Attention to These 5 Realities of Performance Management

In order to "solve" performance management, we not only have to deal with all the pieces of the puzzle, but we also have to take on new realities. Progressive employers have already begun to accept these truths, but many more must do the same if they want to avoid the loss of top talent.

Here are five of the most important new realities that will help us all solve the performance management puzzle:

1. The traditional performance management model has always been broken for many employers.

Many companies continue to use traditional performance management processes year after year, and managers follow a well-known routine: Fill out target forms, track progress, fill out more forms, conduct a formal annual review, and fill out more forms. Some employers have actually chosen this approach from the start, but that was never the intention of the traditional model of performance management. Annual evaluations were intended to be more substantial than the routine "fill in forms, follow up, assess and repeat" formula. This is not a way to motivate and engage employees. By creating a close link between the individual's work and the organization's  objectives, you can create greater coherence, commitment and pride in what you have achieved. This tight coupling and the intended results have always been part of the traditional performance management model. But they require a high level of interaction, communication and cooperation between the managers and their direct reports - higher than what many offer - no matter what "model" you use.

2. Annual employee reviews are not enough.

Regardless of the performance management model you use, our businesses and people move too fast today for annual reviews to suffice. Performance targets (for both individuals and teams) are now linked to short-term projects and other strategic deadlines, as opposed to the financial year. Therefore, our employees need more immediate, frequent and ongoing feedback. Therefore, more and more employers are supplementing the annual evaluations with more frequent, informal meetings. Managers and employees meet more often to discuss goals, monitor progress and devise strategies to adjust performance when necessary. Many still have annual employee reviews, but these meetings are primarily used to address issues of development and career development - and to discuss compensation (annual salary increases, bonuses, etc.). Meeting only once a year to discuss achievements is a dying practice.

3. Technology is mandatory.

Regardless of the type of evaluation process a company has, technology-based solutions are a necessary part of a successful performance management process - especially when you take into account the tight time frames many managers have to deal with, and the widespread requirement to base evaluations on measurements and hard data . Dedicated performance management software and systems help keep the appraisal process, managers and employees on track and working as efficiently as possible.

4. Companies must work from the bottom up to keep employees engaged.

The companies should let the employees either help with or take the initiative in the evaluation processes and participate actively in the determination of some of the performance targets. This largely contributes to keeping employees engaged in their work. If your organization has a top-down approach, where only managers are accountable, employees have very little incentive to take ownership of their goals or engage in their own development.

5. We can't look at the box to get a "complete picture" of the performance management puzzle.

There is no conclusion or reference material, because performance management is not something that can be created according to all the rules of the art. Yes, we are all looking for the same result - to evaluate, compensate and motivate employees in a fair way. But the pieces of the puzzle that fit together and work effectively will be unique to each organization. Some will benefit from social tools, others will not (at least not yet). Some will find great value in "crowdsourced" evaluations, others will encounter problems. And so on, and so on, with each individual component.

Basically, performance management is about helping employees to perform at their best every single day. It is about employee development. Organizations that treat annual employee reviews as a mere formality will simply lose out to those that focus on improving employee engagement through the process.

Embracing the evolving realities of performance management is essential to avoid talent loss. Progressive employers acknowledge these truths, fostering engagement and productivity. IceHrm provides insights to navigate these changes effectively.