What are the building blocks needed for an effective performance management process?
There are a few basic elements involved in building an effective performance management process, which include:
# 1. Setting Goals
You have to set goals correctly. They must be meaningful and understood. Employees should understand why these individual goals are important and how they contribute to the organisation’s goals. Employees will care much more about their responsibilities and will be much more involved if they realise – and truly understand – why their work is important.
Goal setting should be a collaborative process. While goals in the past stemmed from the higher levels of an organisation, modern businesses are aligning goals upward. So goal setting should include meeting with employees and opening up to the company’s goals, direction and obstacles. With this information, employees can create goals that complement organisational goals and make day-to-day decisions to further those goals.
#2. Transparent communication and collaboration
Employees want – and deserve – their managers and leaders to always be honest and authentic. They don’t want to be in the dark while their companies are in trouble. Hence, they wish to be updated on current events. They also crave real-time communication as they develop healthy relationships with their colleagues and managers. This will require regular feedback and open discussion, even if such communication is difficult or uncomfortable.
# 3. Employee recognition
An effective performance management system should prioritize employee recognition and reward. Employees should feel appreciated and valued for the work they do and the effort they put in. If employee recognition isn’t a top priority, it will most likely hurt your voluntary turnover.
# 4. Honest and regular feedback and reviews
The more frequent and precise the feedback, the better the individual performance. It’s that simple. Employees want regular insights into their work, and the more knowledgeable employees are about their performance, the more able they are to improve and thrive.
# 5. Employee development
No ambitious top performer wants to stay in a company for the long term without honing and developing skills. Progress and development are important to employees, not to mention that companies benefit when employees are more qualified and capable.
What is Effective Employee Performance Management?
Having all elements of the performance management cycle in place is critical, but it doesn’t guarantee effective performance management for your organization. There are other other factors at work, including:
Get buy-in from leadership and top management for performance management
Ensure that the performance management cycle is continuous and not annual
Make conversations and performance reviews meaningful rather than “checkbox” exercises.
Have easy-to-use performance management software that supports effective performance management and provides visibility into performance management activity.
The ability and willingness of your managers to provide effective performance management on a daily basis.
Real examples of performance management
Of all, understanding performance management theory is one thing; putting it into practice in a real company is another thing. Let’s take a look at some real-world examples of how the performance management process works:
# 1. Cargill
Cargill, a Minnesota-based food manufacturer and distributor with more than 150,000 employees, demonstrates that even large companies can move away from cumbersome performance reviews and implement a new system. They developed their “Everyday Performance Management” system in the process for the latest study of management’s dissatisfaction with older performance management processes. The system is designed to be ongoing, with daily activities and feedback mixed into speeches that solve problems rather than rework past activities.
# 2. Google
Unsurprisingly, Google appears on a list of organisations using a newer and more innovative management system. This organisation has always been a pioneer and its foundation of the performance management process is based on data and analysis, as well as ensuring that its managers receive adequate training.
#3. Accenture
Accenture is a large company with over 330,000 employees, so updating your systems requires a lot of effort. When they switched to their new system, they eliminated nearly 90% of the previous process. They are now employing a smoother performance management process where employees receive continuous and immediate feedback from management. This was accompanied by a renewed emphasis on rapid employee development and the development of an internal app for communicating comments.
# 4. Facebook
Facebook, another Internet pioneer, has a performance management process that places a strong focus on peer feedback . They can use that feedback in semi-annual reviews to see how teams are performing and to identify where collaboration is occurring and where it isn’t. They also built in-house software that provides continuous, real-time input. This helps staff resolve problems before they become difficult.
#5. Adobe
Adobe found that managers spent around 80,000 hours a year on performance reviews, only to see employees report that they were depressed by the reviews and that revenue was growing as a result.
Seeing a system that produced only negative results, Adobe’s management team took a risk and implemented a performance management system that began by training managers on how to perform more frequent check-ins and providing actionable guidance, then l ‘company gave managers the leeway they needed to lead effectively.