Opinion: Redefining Your Performance Management Systems and Processes

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16th May, 2022
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08th Feb, 2016
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Opinion: Redefining Your Performance Management Systems and Processes

In today’s hyper-competitive world, what is it that differentiates a good company from an outstanding company? You may have the best technology and infrastructure in place, but without sincere and inspired performances from your employees, you will soon fall behind. Your people are the backbone of your company, and their performance is the critical differentiator for survival in the industry.

Establishing the Right Performance Management Systems

Every organisation needs to have performance management systems that can promote and nurture employee effectiveness. When employees are encouraged to perform better, the employee engagement will be higher and attrition rates will decrease – leading to overall growth and enhanced productivity. A 2013 Gallup poll that reviewed employee engagement data from over 50,000 employees working in 22 global companies showed that over half the employees felt their company’s performance management did not hit the mark.

If you feel that your workers are disgruntled, not performing to their peak efficiency and are looking for other job options, then maybe the HR Department needs to take a fresh look at the performance management processes and practices that are currently being followed. Reflect on these points:

1) Do you have a positive and supportive work environment, where the managers and team are all on the same page?

2) When there is an urgent deadline, does everyone pitch in wholeheartedly and work overtime, or do you have people passing the buck and trying to escape their responsibilities?

3) Do a majority of the projects undertaken end on a positive note, on time and within budget?

4) Is the rate of employee attrition higher than the norm?

To set up a new performance management system, you should ideally set up a small committee that represents board members, employees and managers and create understanding and support for the process. Your people are the key, and building up a rapport between team members and managers will result in great team work and superior performances.

Once the planning and schedules are worked out, you must communicate the new processes and values to every employee before implementation.

Improving employee effectiveness

Quite often, the most difficult part of the planning process is in outlining job objectives and delineating indicators of success. Where do we start measuring the quality of performances, and what do we benchmark these against?

A performance evaluation or appraisal needs to be carried out once a year for each employee, where a fair assessment is carried out of his or her achievements, and the managers give constructive feedback for growth as well as extend praise wherever it is needed. By reviewing, planning and chalking out yearly goals and objectives, each employee can enhance his or her contribution towards the organisation. They should be made to understand that the new system and appraisals are primarily to help them to develop their core capabilities, not merely to monitor salary hikes or promotions at work.

Such appraisals go a long way toward making each employee feel valued, and feel that they are a part of the overall vision of the company. Recognition for good performances motivates and inspires employees to push themselves to perform even better. Constructive feedback helps people to understand where they stand in the eyes of the management, and how they can improve themselves in order to achieve more personally and professionally.

Tracking overall performances through KPIs

Many organisations face challenges in quantifying improvement and growth. This is where Key Performance Indicators play an important role.  It is not always easy to evaluate whether your business is on the right growth track or not. Keeping aside normal declines due to a sluggish market, if your business is not looking up over several quarters, then a systematic evaluation is needed to identify the sectors that need improvement – and this is where KPIs play an integral role.

KPIs are measures that indicate and measure your organisation’s alignment with the overall business strategy or goals. At the start of the year, it would be good practice to set in place KPIs for each department and even each team. They serve to define objectives and goals to be achieved, and help to ensure that everyone is on the right track to create greater value and achieve business excellence.

Communication is the key

To increase employee performances and organisational productivity, clearly communicated performance indicators should be defined and reiterated time and again by managers to their teams. Communication is the key and employee expectations should be laid out in a performance appraisal at least once, if not several times a year. This activity should focus on employee strengths rather than their failures, in order to encourage them to work better and achieve their full potential. The best managers are those who are able to empower and engage their teams and help them work together in cohesion and collaboration.

To sum up, performance management is more than just plans and periodic reviews. It should be a continuous process that redefines organisational goals, assesses progress and evaluates performances to ensure that they are in line with the overall vision.

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Usha Sunil

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Writing is Usha's hobby and passion. She has written widely on topics as diverse as training, finance, HR and marketing, and is now into technical writing and education. She keeps an interested eye on new trends in technology, and is currently on a mission to find out what makes the world go around.