Components of an Effective Performance Management System
Are you on the right track to reach your business goals? Do you have an effective system in place for your staff to reach them? If you answered no, a solid performance management system can make your job easier.
What is Performance Management System?
It is defined as a proactive technique by which the overall performance of the business is improved by improving the performance of individual employees. That sounds complicated, doesn’t it? It’s not really though. Simply put, it is a system to manage the performance of the company and its people.
As easy as it sounds, you are probably already doing some of the steps without even knowing about the same. However, when we speak about performance management, people often envision spending hours at their desk, taking up human resource management courses, tracking metrics or writing up employee performance reviews.
Well, those are certainly some pieces of the large puzzle. But, what they don’t understand is that an effective performance management system doesn’t necessarily mean more work on your plate. It ensures that everyone is on the same page, right from the CEO to managers and all the employees. The positive benefits that all enjoy are passed up the ladder and contribute to the business as a whole.
Effective Performance Management System
The goal of a performance management system is simple – Everyone is working in harmony together to meet overall operational and company performance goals. The operations, employees, financials should complement each other and its synergy should propel towards the business goals.
Are you wondering, how in the world you can make that happen? Here are the essential components needed to develop the perfect performance management system that will work:
- Defining Goals and Setting out the Expectations
We all know how important communication is to human relationships. In this case, communicating and setting out clear expectations should be at the forefront of an effective performance management system. Ensure that you clearly express your expectations and the message is passed down to all the employees.
Rather than a box-checking process or a flurry of paperwork, it should improve the way people perform. Your system should set down the goals and expectations in a straightforward manner so that the team can work towards it.
- Monitor the Progress on Goals
You need to be aware if you are on the right track. So, review individual and team goals weekly or monthly to clarify the focus and use this information as a basis for performance discussions. By doing this you can review the progress and see if all are indeed on the same page.
- Performance Review based on Multiple Data Sources
These reviews measure how your employees are responding to your expectations. The system should use a form of multi-rater feedback so that it is fair and accurate. Managers should not just rely solely on their own perceptions of an employee’s performance. This will only introduce unnecessary biases.
It would be great for the manager to collect inputs with a couple of peers and subordinates to augment their own review and enable an accurate performance evaluation. You can also let the employees do a self-review of how they have done.
- Teach and Coach
All of us tend to lose our way at times and this is where a formal or informal process of mentorship comes in handy. Open up the lines of communication, encourage and motivate your employees with frequent coaching conversations to help them perform better.
Five extra minutes of coaching is all it takes to build a strong encouragement and support for your people.
- Reward and Recognize
Foster a culture of taking responsibility that goes beyond just making people feel accountable for poor performance. Recognize and reward those who push the upper limits and out-perform.
Also, what are you doing now to make your people look forward to coming back to work tomorrow? Develop a fun and engaging culture that keeps your employees motivated at all times. An effective system should clearly link the individual performance to the organization’s objectives and current initiatives.
- Performance Improvement Planning
This is for employees who are lagging behind and need improvement. Establish a fresh set of goals and sit along with the individual to identify if they need any help. Help them work towards their goal so that in turn they work towards the company’ goal. Agree upon a stipulated deadline to enable the employees to show their improvement and encourage them.
Now if you are saying to yourself this is a great list, but it’s easier said than done, fear not. Mastering this list is a journey and success does not really come instantaneously. Join a Performance Management certification problem to help and let all the pieces fall into its place.
An effective performance management system is the key to greater organizational success. After all, the people are the lifeline of the business.
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