Performance Management System

Effective Performance Management Systems

The age-old practice of once-a-year employee appraisals is experiencing a major culture shift – and finding itself on the endangered species list.  The act of managers and employees sitting down at a table and discussing how the previous year’s successes and imperfections affect salary raises has been overtaken by a year-long process of interactions:  regular and relevant feedback;  clear, consistent communication of expectations;  identification of career and training paths;  immediate recognition and rewards programs.

An Effective Performance Management System is no longer a lone activity.  It is part of a broader, integrative system.

Many organizations have implemented coaching initiatives which take key roles in performance management. Performance and leadership coaching helps individuals take on a more personal role in their own development by helping to align the individual’s goals with those of the organization,  setting performance benchmarks,  designing  IDPs, and implementing self-assessment processes.

These initiatives are most effective, however, when they are not cloistered activities, but are but one element of a larger process which involves the active participation and direction of senior leaders.

In an effective Performance Management System, employee reviews are not limited to the direct conversation between an employee and manager.  Components include:  goal setting, action plans, focused observations, employee-initiated reviews, as well as 360 and self-assessments.

This is not to say that traditional, annual performance appraisals don’t have a place in contemporary organizations.  Formal reviews still have a great impact, when performed in conjunction with a complete Performance Management System.

In order to get the most out of the performance review process, here are a few tips to consider:

Establish a Collaborative Atmosphere: Make it clear from the beginning that the employee’s success is important to both of you, and input and ideas are required from both parties.  While it may be easier to identify an area for improvement, getting to the root of an issue and diagnosing an effective remedy requires insight and input from the employee.  You might be surprised to discover what is really getting in the way of peak performance.

Obtain a Broad Perspective: Although the review itself is a two-way conversation, enter the meeting with a large-picture view from a variety of sources.  One direct way to do this is through the implementation of a 360 assessment involving the opinions and perspectives of peers and other managers.  Inter-department relations and business partnerships can also offer unique insight to employee effectiveness and opportunities.

Set S.M.A.R.T Goals:  Verbalizing dreams is fun, but effective goal-setting is something altogether different.   When collaborating on goals, ensure they are:

S – Specific

M – Measurable

A – Attainable

R – Results-oriented/Relevant/Realistic

T – Time-Bound

Want to make this model even smarter? Add these steps:

E – Evaluate

R – Re-evaluate

Establish a Process: This is the very essence of the review being part of a system, rather than an annual event.   In the absence of follow-up and accountability, the review is nothing more than an interesting conversation.  Ensure performance management is a daily aspect of the work environment, through observation, feedback, and regular check-ins around goal attainment and obstacles.

Identify Reward and Recognition:  Managers typically see reviews as a chance to focus on performance; employees see it as the moment of financial reckoning.  The recent economic climate has imposed considerable restraints (and often complete lockdowns) on compensation increases.  No matter the reward – or lack thereof – it is critical to explain the reasoning behind the decision.  Ensure your policies are fair and consistent throughout the organization.  Many times, you may feel an employee is worth much more than what is in your power to offer.  So get creative.  Offer more flexible schedules; train for new job skills to meet promotion opportunities;   consider less-expensive perks like gym memberships or commute-reimbursement.

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