PERFORMANCE MANAGEMENT IN HR 

The word “management” was initially used in Old French to describe equestrian activities, like “holding the reins of a horse”, according to Wikipedia, while performance is a measure of the amount of useful work done. The etymology of both words has expanded hugely within modern-day contexts, from technology to business to Human Resources (HR).

Today, performance management is an essential tool in a company’s toolbox to unlock the benefits of optimal efforts from employees.

What is performance management?

Performance management measures how well workers achieve set goals. but it also assesses workers’ strengths and weaknesses to help employees grow and develop. In turn, organisations improve employee engagement that translates to greater organisational success.

Instead of the traditional annual review, many companies are adopting a more agile feedback system by checking in with employees on a regular basis. This way, HR and managers work closely to receive and give regular feedback, setting goals, and reviewing progress continually, not just at the end of the year.

Why is performance management important?

The goal of performance management is to unlock and utilise optimal productivity from each employee. Without a motivated, engaged workforce, a business cannot reach its full potential. In 2017, Deloitte found that a staggering 90% of organisations surveyed experienced greater employee engagement when they changed their performance management approach.

Business Goals of performance management

Setting goals for employees is one of the best ways to improve business outputs. Good performance management structures greatly improve the overall vitality of an organisation, yielding a multitude of benefits.

Fulfill company objectives

When employees understand how their performance directly affects the success of a business, you know you have a good performance review system in place. It allows everyone in the organisation to align to the higher organisational goals, priorities and direction, ensuring a sense of ownership in the success of the business through the achievement of personal goals.

In turn, companies can use performance management to get a good view of future problems, challenges or benefits, and how to respond to each of these early on. This can prevent trouble and address problems before they grow too big to resolve.

Encourage employee development

An agile performance management system helps employers to identify talent and create programs to address their development and progression opportunities. Similarly, the performance management system offer employees the opportunity to analyse their own development and what they need to grow.

Identifying areas of improvement

The earlier a company detects problems within its workforce, the sooner it can offer solutions. If employees lack the know-how to perform certain processes or duties that are part of their functions, a robust performance management process can detect this and provide the proper training and development to improve employees’ knowledge base and skills.

Setting expectations for both employees and employers

Clear, regular communication between employer and employee enable all parties to set expectations. Defined expectations and objectives make performance measurement easier and transparent, and all parties understand unambiguously what is expected from them. It enhances a culture of accountability, from employee to employer, and vice versa.

Establish areas of development

Regular performance reviews can easily identify where employees might benefit from further training. A great performance management system helps staff to pinpoint these areas independently and communicate their needs for specific training.

Types of performance management evaluations

Comprehensive performance management tools allow various types of evaluations to give employees and employers an all-round perspective of the current state.

Self-assessment

An employee can do a self-appraisal compared with a line manager’s appraisal. This can assist in identifying whether an employee clearly understands their role and what they are expected to do in the role.

Team assessment

A team performance appraisal is useful when teams within the organisation regularly work on projects, as opposed to individuals. A team review can assess occasional teamwork. Individual performance is still the final determinant of an employee’s measure. Where teamwork is used frequently, but individual performance still features, a team assessment analyses the individual’s contribution to the team effort. Where teamwork is the primary modus of accomplishing business goals, team appraisals link to individual performance measures. And where teamwork is the only method of operating, individual appraisals do not exist, while team performance determines monetary rewards for the team.

Graphic rating scale

The graphic rating scale measures a worker’s rating on a numbered scale according to a list of desired traits and behaviours for a role. This is useful measure for unique characteristics in your workforce and can shed light on employee engagement.

Forced Choice

Employees get a set of questions where they are forced to make a specific choice, often in the form of “yes” or “no” with no other options available to answer the question.

Skill Evaluation

This evaluates employees’ level of technical and theoretical knowledge. The outcome enables line managers to easily identify knowledge gaps for training and development purposes.

Goals and Results

These appraisals measure employees’ outputs in correspondence with predefined goals. You can easily look back on what the goals or outputs were as agreed between the employee and employer and go over the results in accordance with these.

Leader Assessment

A leader is evaluated by their team and customers, giving HR an objective, in-depth understanding of a manager’s strengths and helping them focus on the development and training required to have the biggest impact on the organisation.

When should performance management evaluations be done?

Traditionally performance appraisals are done annually. However, this is no longer regarded as the norm to stay abreast of employee performance. Software now enables companies to do different types of assessments more regularly, allowing for continuous feedback in all directions, between employee and employer, and even amid peers. For example, a software module can allow employees to do a monthly self-assessment, or project-by-project team and leadership assessments.

Midyear

A good rule of thumb is to do performance reviews at least twice a year. Midyear assessments establish that employees are on track and in tune with the overall business objectives and give suitable time for course corrections if necessary.

Year-end

Year-end appraisals take stock of what had been achieved and what could be improved, as well as a strategy to assist with the improvements. However, regular feedback sessions and other methods of review as described in this blog are excellent on-the-go yardsticks to avoid surprises on all sides when the annual reviews come around.