A Guide To Performance Management
It is a well-established fact that performance management has been an integral part of a company’s operations for as long as companies have existed. From the boardroom to the front lines, from white collar professionals to blue chip organizations, it is nearly impossible to think about one working professional in any sector or country who does not have a general sense of performance management.
With so many ways to manage employee performance, it can be difficult for people new to the field and even experienced professionals who are sometimes unfamiliar with how their own organization operates when they are dealing with issues like poor performance. In addition, if you work in more than one company then setting up an effective system within your company may be challenging.
Here is a guide to help you.
The Performance Management Process. Performance management can be defined in many ways by many people and it can come in different types and forms depending on the organization, the industry it works, and the country it operates in. But in some way, there is an exact process for every performance management program that any company puts into place. With that in mind, here are the general steps that most companies follow:
Define performance objectives and expectations. A performance management system should start with an organization defining what an employee’s performance will look like and what he or she should get out of his or her job when both of these factors are considered as a whole. The benefits that the employee will receive from the organization or company in exchange for their work will be weighed against his or her responsibilities. This is a very important step that can be neglected if it is not taken seriously.
Set up a performance management system. Setting up an effective performance management system should be based on certain criteria. The size, complexity and culture of the organization should all affect what goes into use, how it works, and when updates are made to it. A good performance management system should be very detailed, with checklists and instructions included so that everyone knows what they are doing. It is also important to update the system as needed, especially since changes may occur over time.
Be consistent when measuring performance. There is little use in having a performance management system if it is not measured consistently from one year to the next or if a manager does not have the freedom to implement the program in his or her own way. When managers have autonomy to access their employees’ performance levels then they can start working on a plan of action for those who are not performing well enough to continue on under the company’s name.
Train managers on managing performance. It is important to give management training when it comes to managing employee performance. If a manager is not comfortable or familiar with such programs then they might not know what they need to do in order to fulfill the requirements that are included in the program. Also, an effective manager should be able to train his or her team members on how to manage their performances as well, which means that more management exposure is needed when it comes to this kind of training.
Compensation and rewards. Performance management systems have many different ways of measuring and assessing employee performance levels for one company or industry may differ from another’s. In the past, pay increases based on performance were usually given out as a bonus to at least half of the employees and this system worked well if it was used consistently. The problem with this approach is that once the bonus was paid out there was nothing else left to be done in terms of performance management.
But with many different models of compensation and rewards being developed in recent years, there are other things that can be done to reward an employee for his or her work and to motivate him or her to continue performing at a high level. One such program is called “pay for skills” which allows professionals to get access to higher pay levels when they have proven themselves adept at using certain skills and knowledge within their positions.
Be sure to reward employees if they are doing more than expected. Most organizations that are using performance management will have certain amounts of employees who consistently perform above and beyond what is required of them on a regular basis. More often than not, these individuals will be rewarded with raises, bonuses or additional responsibilities as a result.
Promote from within whenever possible. A big reason why so many companies prefer to use the “pay for skills” program is because it helps promote people from within rather than having to go outside of their organization to find the right candidate who can work effectively with those outside the company’s walls.
Performance Management Results. Knowing how to manage employee performance is great but it does not mean that you are getting the best results from your employees right away. Therefore, it is important to understand what other factors are involved in measuring performance and how you can use that information to make better decisions when dealing with an employee who is underperforming.
You should keep an eye on:
Customer feedback. Nowadays, customers expect a level of service that matches what they would get from a five star establishment or business and this means that you need team members who are up to the challenge. It is said that those who best know their customers are those who take the time to know them. If a manager has a team member that knows how to interact well with customers then this person should be able to increase their level of productivity.
Internal company goals. A company’s goals can change over time as new employees are trained and new departments are established, but they should always be in place as an organization grows or changes in some way. However, since it is usually hard to not do anything else when there is no longer any purpose for an employee’s role within an organization it may be easy for him or her to slack off on their duties once they have no purpose left within the business.
Recognize achievement. One way of encouraging good performance among those within your organization is through recognition programs. This is an important part of a manager’s job to make sure that their employees are recognized for the great work that they do. Unfortunately, managers in the past have been known to overlook this point because they feel like they can do so by simply paying their employees more money or giving them more opportunities for advancement, but this will not always work.
Be sure to permanently retain your best employees. Most managers will say that they understand the importance of retaining their best employees but only a few actually do anything about it. There are many ways of doing this, since you can use some of the same tactics that you would use to retain customers in order to keep your team members. You might reward them with additional responsibility or opportunities for advancement or even offer them a raise if they add greater value to your company than those who have left.
Performance Management Tools and Software. Aside from performance rating scales and management training, there are other tools that are used throughout the world when it comes to managing employee performance.
Conclusion
Performance management is a very complex process but as long as you know what you are doing and why, then it becomes much easier to accomplish. Be sure to use the information that we have provided you with so that you can get the best out of your team members.
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Further Reading: Performance Management System examples.