It's the era of continuous performance management, powered by the latest technologies. But where should HR departments and managers start? Employee performance management is defined as the continuous communication and feedback process between a manager and an employee to achieve organizational goals.
Employee performance management was once a forward-looking solution entirely dependent on hindsight, but organizational culture is evolving into one of continuous feedback supported by technology. This allows managers to predict issues based on current employee performance and initiate any form of course correction to get the employee back on track.
In this article, we provide clear insights into what performance management is, the employee performance management cycle and best practices, features of effective employee performance management software, and the future of employee performance management.
What is Performance Management?
Performance management is defined as the continuous feedback and communication process between managers and their employees to ensure that the organization’s strategic goals are achieved.
The definition of employee performance management has evolved since it first appeared. It was initially seen as an annual process to ensure continuous employee performance management. The goal was to ensure employees perform efficiently throughout the year, addressing any issues that may arise along the way that affect employee performance.
Kathy Enderes states, "Most employees see their organization’s approach to employee performance management as confusing, subjective, and infrequent." This is the current state of employee performance management. However, it doesn’t have to be this way. Automation now plays a significant role in employee performance management, and many involved processes can be streamlined so that employee performance can be managed strategically. This is the era of continuous employee performance management.
Employee performance management differs from talent management in that the latter is a set of initiatives taken to engage employees to retain them. On the other hand, performance management is an initiative to guide employees towards setting and achieving their goals in alignment with the immediate and overall goals of the organization.
Why is Performance Management Important?
The importance of employee performance management lies in the following:
Annual Performance Reviews:
This prepares both employees and managers for what to expect during the annual review. It keeps both the manager and employee informed of ongoing changes in the employee performance management process, what each can do to streamline it, and how performance can be improved overall.
For employees, continuous employee performance management signifies that their managers value them. Employees believe their managers are interested in their work and care about their goals and any issues they may face while working. They also become more open to receiving constructive feedback.
The Performance Management Cycle
The employee performance management process consists of a series of five main steps. These steps are crucial regardless of how often you review employee performance:
Planning
This phase involves setting employee goals and communicating these goals to them. While these goals should be disclosed in the job description to attract competent candidates, they should be reiterated once the candidate becomes a new employee. Depending on your organization’s performance management process, you may want to assign a percentage to each of these goals to evaluate their achievement.
Monitoring
In this phase, managers are required to monitor employee performance in achieving the goal. This is where continuous performance management comes into play. With the right employee performance management software, you can track your team’s performance in real-time and adjust the course as necessary.
Reviewing
This phase involves using the data gathered during the monitoring phase to improve employee performance. It may require suggesting refresher courses, providing tasks that help them improve their knowledge and job performance, or changing the employee development trajectory to enhance or maintain excellence.
Evaluating
Each employee’s performance should be periodically evaluated and then at the time of performance review. Evaluations are necessary to determine the status of employee performance and implement changes accordingly. Both peers and managers can provide these ratings for 360-degree feedback.
Rewarding
Recognizing and rewarding good performance is crucial to the performance management process and is an essential part of employee engagement. You can do this through a simple thank you, social recognition, or a comprehensive employee rewards program that regularly honors and rewards outstanding performance in the organization.
How to Improve the Performance Management Process
To improve the employee performance management process, ask the following questions:
What Does Your Workforce Want from Performance Management?
An employee performance management program can help or hinder your workforce. However, before you can make any practical changes to your current processes and tools, you need to understand what isn’t working and why. You also need to take the time to evaluate what your employees want from a performance management program.
During this evaluation, nothing is more important than talking to your employees. Your employees and managers likely have some strong opinions they would be happy to share with you. You may be surprised at how many people are eager for an improved process.
The next step is to relay your findings to the decision-makers who can sponsor and drive change in your organization. Share your internal findings along with evidence-based research conducted by experts that demonstrate the impact an improved performance process can have on business outcomes.
Are You Providing Continuous Performance Management?
Employers want their employees to be happy, but happiness isn’t necessarily what people want from their employers. Instead, employees want to feel motivated and understand that their work matters and why. A performance management experience that delivers value to employees should focus on increasing motivation.
For motivation, the performance management process should include frequent and continuous conversations between employees and managers, so that goals, progress, and personal achievements remain relevant and top of mind.
The content of these conversations is just as important as their frequency. Motivation is linked to a forward-looking perspective focused on developmental opportunities. Managers should genuinely engage with employees about their career success, goal achievement, and aligning their work with the organization’s top priorities.
For these frequent conversations to be successful, they should be light and include forward-focused questions for employees such as: What motivates you? What helps you? What do you need? HR can support this by training managers to provide more productive and proactive feedback and ask the right questions.
Do Managers Have the Tools to Manage the Performance Management Process?
Managers are crucial to the success of your organization’s performance management program. They play a significant role in motivating, engaging, and developing employees. This makes it essential to ensure managers are trained to provide and receive useful feedback and are comfortable with the elements of the continuous process.
Allocate time to meet with managers and train them on your talent management practices, so everyone feels at ease conducting frequent and lightweight conversations.
Finally, having the right technology to support continuous performance management is essential. You need HR technology that is clearly designed to assist managers and the organization in an ongoing process.
The Role of DocSuite HR in Performance Management
Performance management is not just an HR concern; it is a concern for all levels of leadership within the organization. However, organizations often wonder if investments in technology will truly lead to improvements. Should you invest in performance management software?
Investments in technology will lead to improvements only when there is a defined performance management strategy. Without this solution, an automated solution can burden the manager.
DocSuite HR helps you by:
Providing a range of tools and features to analyze and track work performance.
Managing employee goals and tasks.
Tracking and analyzing project time.
Creating detailed reports on individual and team performance.
Offering mechanisms for providing feedback and guidance to employees.
Analyzing data to identify areas needing improvement.