What Is Effective Performance Management And How Will It Benefit Your Business?
Conduct an annual appraisal with every member of your team, and you’ve ticked off performance management for the year, right? Wrong. You need to do much more than this. And, when carried out correctly, it can provide a whole host of business benefits. So much so, it’s been adopted by the big-names, such as Microsoft and Adobe.
Here, we explore the topic in more detail…
What is performance management?
Firstly, let’s start with the performance management definition. Rather than being a once-a-year thing and focused solely on the employee, it’s continuous and works to the wider business objectives. Individual goals are still set, but to best improve performance, there are team ones too. These are specifically aligned to the organisation’s strategic aims.
The performance management process explicitly plans performance to reach goals, reviewing and assessing the progress made on an ongoing basis. It also develops the team’s knowledge and capabilities. As the process is constant, it has a revolving nature, creating a cycle for your business.
How the performance management cycle works
In this cycle, there are four stages: plan, review, act and track. The plan stage gives you the opportunity to set SMART goals and create a personal development plan, considering the organisation’s targets and values. During the review stage, achievements are assessed, learnings identified, goals discussed, and actions decided upon.
The ‘act’ part will be performing their role, putting into action the personal development plan, and achieving the targets set. The track phase is what it says on the tin – with progress also receiving continuous constructive feedback and any difficulties worked through with coaching. As it’s a cycle, no specific stage comes first.
Effective performance management and the balanced scorecard
You may have also heard of performance management and the balanced scorecard. This scorecard is a strategic planning and management system that allows businesses to understand and communicate what they’re trying to achieve.
Employees are able to prioritise their work and align their tasks with the entire strategy. And, employers can monitor and measure progress towards targets. The balanced scorecard connects the bigger strategy to a business’ mission, vision, core values, strategic focus areas, operational objectives, measures, targets and initiatives.
What’s involved in a performance management system?
The cycle and balanced scorecard aren’t the only features of performance management. It can be applied not just to those already working for you, but also during the recruitment process. The interviewing stage is the ideal time to get to know each applicant’s strengths, weaknesses and abilities. This will prove valuable not just for working out who will perform best, but knowing how to boost their performance later on.
It’s also a good idea to integrate elements of performance management practices into their induction. A key part will be establishing standards, as well as recognition systems so that employees know their contributions are making a significant impact, and feel rewarded.
Can performance management add value to your business?
You might be wondering exactly how performance management will benefit your organisation. In reality, there are endless ways. Praise and recognition will likely boost employee motivation and self-esteem. You will also find that your employees become more engaged and less likely to leave the company.
Managers will be able to easily understand each individual’s strengths and weaknesses, as well as how they themselves can help. This will also create a level of fairness in the business’ HR system. If disciplinary action of any sort needs to be taken, then the correct steps will have been followed so employees won’t be able to refute claims.
How can performance management affect organisational culture?
Another key advantage of performance management is that it has a positive impact on a business culture. The clear and effective communication required for successful performance management allows employees to feel included and valued, creating a collaborative environment. In turn, this can lead to improved physical and mental health, as well as career growth and satisfaction. Ultimately how they work will improve, and this is precisely why performance management matters.
Whilst the benefits are fantastic, implementing the right processes for performance management may prove difficult if you’ve not had any training. Thankfully, at Bright Direction Training we provide Leadership and Management apprenticeships which will ensure you can roll out a system that boosts your business. Building relationships, communication and managing and leading people are just some of the units that will prove useful.
Plus, all of our apprenticeship qualifications are aligned with ILM qualifications. You can find out more information by calling us on 01204 859 859, emailing us at firstname.lastname@example.org, or fill out our contact form here.