Some people incorrectly use the term ‘performance management’ to describe little more than the traditional staff appraisal – but it covers so much more than that. Performance management is a holistic system, designed to ensure everyone contributes in the most positive way to the strategic objectives of the business as a whole.
What does performance management involve?
Here are some typical elements of a performance management system, covering every aspect of working life, from recruitment to departure:
- Clearly defined job descriptions, so prospective employees are crystal clear about what they are required to do
- Carefully designed selection processes that seek out the most suitable people for every role
- Individual performance plans incorporating key performance indicators for each task
- Established job requirements, achievement-based performance standards and details of how they will be measured
- Continuous training, education and feedback, tailored to achieve specified objectives
- Quantified training outcomes measured against agreed standards
- Regular discussions regarding employee performance, based around performance benchmarks
- Worthwhile systems for rewarding employees who exceed expectations in their work
- Career development opportunities and support for those wishing to advance or change their role
- Exit interviews to uncover the root causes behind each employee’s departure.
Remember, performance management is about the whole workplace working in harmony. So it is the overall package that constitutes the system, not the individual components.
How does performance management improve outcomes?
Performance management puts in place an ongoing form of accountability that focuses on continual progress rather than a short-term review at appraisal time. When implemented correctly, performance management can result in company-wide transformations that benefit employers, employees and organisations as a whole.
Employees are happy because they are rewarded for what they do, both financially and in other ways – at a personal, group and company level. Possible career paths are made clear so employees can work towards their desired goal.
Employers are happy because they attract candidates that are ideally-suited to each position and benefit from the increased retention of high performing workers. They can analyse specific aspects of productivity and identify what is and what isn’t working. Efficiency increases thanks to more effective working practices, better communication and a training that is tailored to the task at hand. This all leads to high-performing employees and reduced overall costs.
An improved company culture brings everyone behind the same single, clearly defined objective. Individuals understand how their personal contribution helps achieve the wider goal – which boosts morale, reduces stress and increases productivity among employees.
Performance management is one of the most effective catalysts for unlocking the potential of individuals, teams and entire companies. However, it is also one of the most misunderstood and poorly implemented management systems. While it has been shown to be highly effective, installing a successful performance management system into a workplace can be hard work.
Outsourcing the task to HR Rockstars, however, means you can enjoy all the benefits of performance management without the hassle of implementing, maintaining and managing the system.