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Performance Management - What gets measured gets done

 

Performance management is a set of processes and systems aimed at developing employees, so they perform their job to the best of their ability. The goal is to help employees build on skills that enable them to perform better in their roles, reach their potential, and boost their success while also accomplishing the strategic goals of the organization.

The Performance management process involves:

  1. Establishing clear expectations
  2. Setting individual objectives and goals that align with team and organizational goals
  3. Providing ongoing feedback
  4. Evaluating results

Career decisions, including promotions, bonuses, and dismissals, are linked to the performance management process. (Vulpen, 2023)

 

Why is performance management important?

AIHR lists down five reasons as to why performance management is so important for the organization.

  • Future-proofing your workforce’s skills

Establishing a continuous line of communication with employees and monitoring their skills, learning, and training developments helps uncover potential skills and performance gaps in the organization.

  • Increased employee engagement

It provides them with learning and development opportunities, a clear career path in the organization, and an understanding of their role’s impact on meeting organizational goals.

  • Higher employee retention

When an employee can see their progression at work and clearly understands their career path and what they need to do to earn a promotion, it leads to more engaged employees who are likely to stay with your organization.

  • Culture of feedback and trust

Establishing a culture of communication, transparency, and trust begins with leadership and HR initiatives that will trickle down to the rest of the organization. When managers are open and give honest, constructive feedback to employees, this encourages employees also to be open and honest, building mutual trust. It also fosters a healthy overall company culture.

  • Improved organizational performance

Managing employee performance ultimately leads to significant improvements in organizational performance, including revenue growth and customer satisfaction.


Effective performance management is essential to businesses. It helps them align their employees, resources, and systems to meet the strategic objectives. It also works as a dashboard, in providing an early warning of potential problems allowing managers to know when they must make adjustments to keep a business on track.

 

So, what are does an  Effective Performance Management process look like?

 

According to AIHR, an effective Performance Management process will have essentially seven steps as demonstrates above. It must start off with a policy that is well constructed taking into consideration the industry benchmarks and business needs and must be transparent across the organization. This will encourage employee buy-in as expectations and outcomes will be clearly stated. 

It will then be followed by SMART Goal setting and progress monitoring. The more real time the monitoring and providing feedback and support can be, more effective will be the process. Performance evaluations can also lead to identification of areas to be developed resulting in employee development plans to assist employees in their performance journey. The process will conclude with reward and recognition based on achievements. 

So what are the changing trends in performance management?

Jonny Gifford, Senior Adviser for Organizational Behavior at the CIPD, explores the changing trends in performance management over recent years in the below video.



In conclusion, through this short blog we were able to understand the process of Employee Performance management, its importance, how to make it effective and the emerging trends of this process. How is this process implemented within your organization? Are there best practices that we can learn from you?

- Ranagana Prasad Naotunna


References:

Vulpen, E.van (2023) What is performance management? The Complete Guide, AIHR. Available at: https://www.aihr.com/blog/what-is-performance-management/ (Accessed: April 9, 2023).

Performance management: Factsheets (no date) CIPD. Available at: https://www.cipd.co.uk/knowledge/fundamentals/people/performance/factsheet#6296 (Accessed: April 9, 2023).


Comments

  1. Niluka De SilvaApril 12, 2023 at 11:40 PM

    Great article about performance management principles. To retain and engage employees, organizations must communicate with them, track their skills and training, and create career opportunities. Constructive communication builds trust and feedback, which enhances company atmosphere and performance.

    AIHR's seven-step performance management process includes all the necessary steps for success. For employee buy-in, a straightforward policy with clear goals and outcomes is essential. Successful processes require real-time monitoring and feedback, staff development plans, and achievement-based rewards and recognition.

    It is interesting to watch performance management trends evolve. New technology and agile performance management match modern workplace needs and preferences.

    Do you use new performance management technologies? How has it affected your company?

    ReplyDelete
    Replies
    1. Rangana Prasad NaotunnaApril 13, 2023 at 7:09 AM

      Yea Niluka. My conpany has transitioned the executive performance management to an onlie real time system. This allows for regualr feedback by supervisor and checking one's progress against set expectations. They are also trying to tie - in the rewards strategy so that it will be transparent and value adding for employees.

      Delete
  2. Praveen SathyaseelanApril 23, 2023 at 1:38 AM

    Thank you for sharing your insightful post on performance management. Your emphasis on establishing clear expectations, providing ongoing feedback, and evaluating results as crucial components of effective performance management resonates with my understanding of the subject.

    I agree that implementing a robust performance management process can help organizations enhance their performance, foster employee engagement and retention, and drive success by aligning individual and team goals with the organization's objectives.

    I appreciate your mention of the changing trends in performance management, which highlights the importance of adapting to the evolving needs of the workforce to optimize the process's effectiveness continually.

    ReplyDelete

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