Understanding the Essence and Advantages of Performance Management
A performance management strategy can ensure that your employees' activities and performance are aligned with overall company goals and can be critical to company success and employee productivity. The benefits of an effective performance management strategy include:
- Identifying training gaps and further training needs.
- Increase in work morale and thus productivity and performance.
- It helps identify the right employees for promotion.
- Improves workforce planning, including managing workload and delegation.
- Increases employee retention/reduces employee turnover.
- Allows employees more autonomy in managing their tasks.
What is performance management in human resources?
Defined by the CIPD as "the activities and processes that focus on skills, resources and support to maintain and improve employee performance in line with an organization's objectives", performance management encompasses a range of HR initiatives including KPIs and goals, performance reviews, feedback and L&D.
Research shows that employees who receive regular feedback on their strengths are, on average, 8.9% more profitable (Gallup, 2016).
Why is performance management important?
Ongoing, effective performance management helps promote an open dialogue between employees, managers and the company as a whole. This increases trust and ensures everyone feels more supported and engaged. Otherwise, there is a risk that employees will feel disconnected from their work and their role in the company, which will most likely lead to higher staff turnover.
8 Benefits of Performance Management
In addition to the aforementioned increase in profitability, what other benefits can performance management offer?
1.Identify training needs
Introducing more frequent assessments, whether formal or informal, can help provide a better understanding of employee skills. Providing your employees with an open forum where they can regularly share and discuss their tasks will help identify training needs before they impact productivity.
Whether your employees need to brush up on a specific skill or simply familiarize themselves with new trends for their role, performance management and regular reviews can help identify any gaps or future training needs.
2.Boosts morale
Everyone likes to be told they did a good job. Performance reviews provide the perfect framework to formalize and document praise. However, it shouldn't just be about setting goals for the coming quarter. You should also give the manager the opportunity to recognize each member of his team.
Satisfied employees are productive employees. A staggering 69% of employees say they would work harder if they felt their efforts were recognized. A paycheck is no longer enough recognition, but regular feedback and reviews are key to maintaining morale.
3.Helps identify the right employees for promotion
Regular reviews are a great way to better understand your employees' performance and their suitability for promotion.
All employees go through the same performance evaluation process. This allows managers to better assess them for promotions, raises or transfers in the same, consistent manner. Not only does this help ensure that the right employee is selected for a promotion, but it also ensures greater transparency and fairness in your selection process.
4.Helps define career paths
Clearly defined, identifiable career paths give employees a goal within the company, which increases motivation and significantly reduces staff turnover.
5.Supports workforce planning
Frequent employee reviews as part of a comprehensive performance management strategy can also help with workforce planning. Discussing current and future workloads with your employees will help you determine future employee needs.
If your employees are unable to cope with their current workload, you can distribute the load to other team members and prioritize the most important tasks.
6.Increases employee retention
Research from HR Daily Advisor earlier this year found that companies that implement regular employee feedback have a 14.9% lower turnover rate than companies that don't receive feedback. High staff turnover can have a significant impact on your business. Not to mention the impact on employee morale and task completion.
Performance management ensures that expectations of your employees and their goals are clear and regularly reviewed. In addition, the introduction of regular feedback discussions and assessments enables employees to address and solve problems.
When employees have the opportunity to communicate regularly with their managers, communication becomes smoother and easier. It also keeps managers updated on their team's progress and any potential issues.
A good performance review strategy allows for regular feedback - both formal and informal. It will prioritize employee recognition and encourage learning and development.
7.More autonomy for employees
As soon as your employees know the overarching company goals and their contribution to them, they can decide relatively freely how they carry out their tasks. As a result, employees are happier, more engaged, more productive and more loyal than those whose every action is dictated to them.
Supervisors have the certainty that they can check an employee's progress towards the agreed goals through regular feedback sessions and discussions. This promotes a culture of trust and initiative among your employees. A culture where ideas and creativity can flow freely. Your company can only benefit from such a culture in the long term.
8.Improves accountability
Accountability plays an important role in the success of a company, but ensuring effective accountability is not easy. Accountability is often equated with a culture of blame. This is not only wrong, but also extremely damaging to company culture and employee morale. Effective accountability defines a company's mission, values and goals and ensures that each individual understands their role within this framework.
IceHrm streamlines performance management for 2024 and beyond. Elevate productivity, foster growth, and boost morale with tailored HR solutions.