Performance management is a corporate management tool that assists managers in monitoring and evaluating employees’ work. The purpose of performance management is to create an atmosphere in which people can perform to the best of their ability to deliver the highest-quality work most efficiently and effectively.<\/p>
A systematic performance-management program helps managers and employees agree on expectations, goals, and career progression, as well as how individuals’ work connects with the company’s broader vision. In general, performance management considers individuals within the context of the larger workplace system. In theory, you want the absolute performance standard, but this is thought to be unreachable.<\/p>
What Are the Stages of the Performance Management Cycle?<\/strong><\/span><\/h2>The first stage of the per\u00adfor\u00admance man\u00adage\u00adment cycle is the “Plan\u00adning” phase. Planning should include the following elements:<\/p>
- Agreeing on SMART objectives<\/li>
- A personal devel\u00adop\u00adment plan<\/li>
- Actions to be taken in the coming months<\/li>
- A review of the employee’s job requirements, with an update to the role profile if needed.<\/li><\/ul>
Historically, organ\u00adi\u00adsa\u00adtions would carry out this plan\u00adning step once a year. However, as the business envi\u00adron\u00adment becomes more nimble and fast-moving, many organ\u00adi\u00adsa\u00adtions are adapt\u00ading their processes to create \u201cnear-term\u201d objec\u00adtives every three months. The goals and values of the organization should be fed into per\u00adfor\u00admance plan\u00adning to ensure that individual per\u00adfor\u00admance aligns with the overall strat\u00ade\u00adgy of the organ\u00adi\u00adsa\u00adtion. Specifically, each SMART objec\u00adtive should contribute to the achievement of one or more of the organization’s goals.<\/p>
Organizations have placed a lot of emphasis on the \u201cReview\u201d section of the performance management cycle \u2014 typically because a per\u00adfor\u00admance assess\u00adment is necessary for reward\u00ad purposes. However, we have always advised that the \u201cAct\u201d and \u201cTrack\u201d stages are the most important. These are the stages at which per\u00adfor\u00admance is delivered and outcomes are obtained. Individuals must be encouraged to set aside regular time to work on their goals and personal devel\u00adop\u00adment plans. Similarly, man\u00adagers should check in with their workers regularly. They must provide frequent, effec\u00adtive feedback and use coach\u00ading skills <\/a>to assist their team mem\u00adbers in over\u00adcom\u00ading chal\u00adlenges and iden\u00adti\u00adfying oppor\u00adtu\u00adni\u00adties for learn\u00ading and improve\u00adment. If this is left until the end of the year, it is too late \u2013 objectives and development goals may only be partially met.<\/p>Performance Management Cycle<\/strong><\/span><\/h3>![\"\"](\"https:\/\/businessyield.com\/wp-content\/uploads\/2021\/08\/performance-management-cycle.jpg\")
<\/a><\/figure>There are no arrows between the four stages in the preceding per\u00adfor\u00admance man\u00adage\u00adment cycle. This is because, in reality, the stages do not follow one another. Act and Track should be done consistently throughout the year. Reviews can take place at any moment, and planning can take place several times throughout the year, you can revisit it as the needs of the business change.<\/p>
What Does the New Con\u00adtinu\u00adous Per\u00adfor\u00admance Man\u00adage\u00adment Cycle Look Like?<\/strong><\/span><\/h2>This phi\u00adlos\u00ado\u00adphy of con\u00adtin\u00adu\u00adous per\u00adfor\u00admance man\u00adage\u00adment has been adopted by lead\u00ading organ\u00adi\u00adsa\u00adtions such as Microsoft, Deloitte, Adobe, and Gen\u00aderal Elec\u00adtric since 2015. All of these household brands have abandoned traditional once-a-year performance reviews in favor of regular \u201ccheck-ins\u201d and frequent (even real-time) feedback.<\/p>
These regular per\u00adfor\u00admance dis\u00adcus\u00adsions are typically devel\u00adop\u00admen\u00adtal and future-focused. They provide team mem\u00adbers the chance to explore what went well and how they replicate the suc\u00adcess again, any chal\u00adlenges they are encountering and how they can be over\u00adcome \u2014 and agree on measures that both the indi\u00advid\u00adual and man\u00adag\u00ader must do to devel\u00adop the indi\u00advid\u00adual and further improve their per\u00adfor\u00admance. Such check-ins are also a wonderful way to address employ\u00adee devel\u00adop\u00adment while also offer\u00ading train\u00ading oppor\u00adtu\u00adni\u00adties and reg\u00adu\u00adlar\u00adly rein\u00adforcing per\u00adfor\u00admance expecta\u00adtions.<\/p>
What Are the Basic Elements Required for Effec\u00adtive Per\u00adfor\u00admance Man\u00adage\u00adment Process?<\/strong><\/span><\/h2>There are a few basic ele\u00adments involved in cre\u00adat\u00ading an effec\u00adtive per\u00adfor\u00admance man\u00adage\u00adment process, which includes:<\/p>
#1. Setting Goals<\/strong><\/span><\/h3>You must set goals correctly. They must be meaningful and understood. Employees should understand why these indi\u00advid\u00adual goals are important and how they contribute to the organization’s goals. Employees will care considerably more about their responsibilities and be a lot more engaged if they realize \u2014 and truly understand \u2014 why their job is important.<\/p>
Goal setting<\/a> should be a collaborative process. Whereas goals used to trickle down from higher-ups in an organization, modern com\u00adpa\u00adnies are align\u00ading goals upwards. So goal set\u00adting should include meet\u00ading with employ\u00adees and being open about com\u00adpa\u00adny goals, direction, and obsta\u00adcles. Armed with this infor\u00adma\u00adtion, employ\u00adees can cre\u00adate objectives that com\u00adple\u00adment organ\u00adi\u00adsa\u00adtion\u00adal objec\u00adtives and make daily deci\u00adsions to further these objec\u00adtives.<\/p>Furthermore, when employees are put in the driver’s seat and permitted to devel\u00adop their own goals (before having them authorized by their line man\u00adag\u00ader), they feel a greater feeling of auton\u00ado\u00admy and own\u00ader\u00adship over their job. This invariably leads to better employee performance.<\/p>
#2. Trans\u00adpar\u00adent com\u00admu\u00adni\u00adca\u00adtion and col\u00adlab\u00ado\u00adra\u00adtion<\/strong><\/span><\/h3>Employ\u00adees want \u2014 and deserve \u2014 their managers and leaders to be honest and authentic at all times. They don’t want to be in the dark while their companies are struggling. So, they wish to be up to date on current events. They also desire real-time com\u00admu\u00adni\u00adca\u00adtion while developing healthy relationships with their coworkers and managers. This will necessitate regular feedback and open discussion \u2014 even if such com\u00admu\u00adni\u00adca\u00adtion is difficult or uncomfortable.<\/p>
#3. Employee Recog\u00adni\u00adtion<\/strong><\/span><\/h3>An effective per\u00adfor\u00admance man\u00adage\u00adment sys\u00adtem should prioritize employee recog\u00adni\u00adtion and reward. Employees should feel valued and appreciated for the work they accomplish and the effort they put in. If employee recog\u00adni\u00adtion is not a top priority, it will most likely harm your voluntary turnover.<\/p>
#4. Honest and regular feed\u00adback and reviews<\/strong><\/span><\/h3>The more fre\u00adquent and pre\u00adcise the feed\u00adback, the better the indi\u00advid\u00adual per\u00adfor\u00admance. It’s as simple as that. Employ\u00adees desire regular insights into their job, and the better-informed employ\u00adees are about their per\u00adfor\u00admance, the better able they are to improve and thrive.<\/p>
#5. Employ\u00adee devel\u00adop\u00adment<\/strong><\/span><\/h3>No ambitious top per\u00adformer wants to stay at a com\u00adpa\u00adny long-term without hon\u00ading and devel\u00adop\u00ading skills. Advance\u00adment and devel\u00adop\u00adment are impor\u00adtant to employ\u00adees \u2014 not to mention, com\u00adpa\u00adnies benefit when employ\u00adees are more skilled and capable.<\/p>
What Is an Ef\u00adfective Employ\u00adee Per\u00adfor\u00admance Man\u00adage\u00adment?<\/strong><\/span><\/h2>Having all of the ele\u00adments of the per\u00adfor\u00admance man\u00adage\u00adment cycle in place is critical, but it does not guar\u00adan\u00adtee effec\u00adtive per\u00adfor\u00admance man\u00adage\u00adment for your organ\u00adi\u00adsa\u00adtion. There are other more factors at work, including:<\/p>
- Obtaining buy-in from the lead\u00ader\u00adship and senior man\u00adage\u00adment for per\u00adfor\u00admance man\u00adage\u00adment<\/li>
- Ensure that the performance man\u00adage\u00adment cycle is continuous and not an annual process<\/li>
- Making per\u00adfor\u00admance con\u00adver\u00adsa\u00adtions and reviews mean\u00ading\u00adful rather than \u201ctick-box\u201d exercises<\/li>
- Having easy-to-use per\u00adfor\u00admance man\u00adage\u00adment soft\u00adware that supports effec\u00adtive per\u00adfor\u00admance man\u00adage\u00adment and provides visibility into per\u00adfor\u00admance man\u00adage\u00adment activity.<\/li>
- The ability and willingness of your managers to deliver effec\u00adtive per\u00adfor\u00admance man\u00adage\u00adment on a daily basis.<\/li><\/ul>
Real-World Examples of Performance Management<\/strong> <\/span><\/h2>Of all, understanding the theory of performance management is one thing; putting it into practice in a real firm is quite another. Let’s look at some real-world examples of how the performance management process works:<\/p>
#1. Cargill<\/strong><\/span><\/h3>Cargill, a Minnesota-based food manufacturer, and distributor with over 150,000 employees, demonstrates that even large corporations may abandon cumbersome performance reviews and implement a new system. They developed their \u2018Everyday Performance Management’ system in the process to the most recent study on management discontent with old performance management processes. The system is intended to be ongoing, with daily activity and feedback blended into talks that solve problems rather than rehash past activities.<\/p>
The Everyday Performance Management system produced overwhelmingly positive results, with 69 percent of employees reporting that they received useful feedback for their professional development and 70 percent reporting that they felt valued as a result of continuous performance discussions with their manager.<\/p>
#2. Google<\/strong><\/span><\/h3>It’s no surprise that Google would appear on a list of organizations that use a newer, more innovative management system. This organization has always been a trailblazer, and its performance management process basis is on data and analysis, as well as ensuring that their managers undergo proper training.<\/p>
When evaluating their performance management system, Google initiated a project dedicated to reviewing its managers, which has resulted in a detailed training and future development process that prepares managers, and thus employees, for success.<\/p>
They also utilize a goal-setting system that has spread across different industries. They redefine the goal-setting process using their Objectives and Key Outcomes (OKRs) system,<\/a> with excellent results.<\/p>#3. Accenture<\/strong><\/span><\/h3>Accenture is a major corporation with over 330,000 employees, therefore upgrading their systems requires a significant amount of effort. When they transitioned to their new system, they eliminated almost 90% of the previous process. They are now employing a more fluid performance management process in which employees receive continuous, immediate feedback from management. This has been accompanied by a renewed emphasis on rapid employee development and the development of an internal app for communicating comments.<\/p>
All of these cases have some things in common. Rather than using a one-size-fits-all strategy, each organization has created a system that works for them. What works for one firm may not work for another; it all relies on the industry, the organization’s speed and adaptability, and the overall objective of the system.<\/p>
#4. Facebook<\/strong><\/span><\/h3>
Historically, organ\u00adi\u00adsa\u00adtions would carry out this plan\u00adning step once a year. However, as the business envi\u00adron\u00adment becomes more nimble and fast-moving, many organ\u00adi\u00adsa\u00adtions are adapt\u00ading their processes to create \u201cnear-term\u201d objec\u00adtives every three months. The goals and values of the organization should be fed into per\u00adfor\u00admance plan\u00adning to ensure that individual per\u00adfor\u00admance aligns with the overall strat\u00ade\u00adgy of the organ\u00adi\u00adsa\u00adtion. Specifically, each SMART objec\u00adtive should contribute to the achievement of one or more of the organization’s goals.<\/p>
Organizations have placed a lot of emphasis on the \u201cReview\u201d section of the performance management cycle \u2014 typically because a per\u00adfor\u00admance assess\u00adment is necessary for reward\u00ad purposes. However, we have always advised that the \u201cAct\u201d and \u201cTrack\u201d stages are the most important. These are the stages at which per\u00adfor\u00admance is delivered and outcomes are obtained. Individuals must be encouraged to set aside regular time to work on their goals and personal devel\u00adop\u00adment plans. Similarly, man\u00adagers should check in with their workers regularly. They must provide frequent, effec\u00adtive feedback and use coach\u00ading skills <\/a>to assist their team mem\u00adbers in over\u00adcom\u00ading chal\u00adlenges and iden\u00adti\u00adfying oppor\u00adtu\u00adni\u00adties for learn\u00ading and improve\u00adment. If this is left until the end of the year, it is too late \u2013 objectives and development goals may only be partially met.<\/p> There are no arrows between the four stages in the preceding per\u00adfor\u00admance man\u00adage\u00adment cycle. This is because, in reality, the stages do not follow one another. Act and Track should be done consistently throughout the year. Reviews can take place at any moment, and planning can take place several times throughout the year, you can revisit it as the needs of the business change.<\/p> This phi\u00adlos\u00ado\u00adphy of con\u00adtin\u00adu\u00adous per\u00adfor\u00admance man\u00adage\u00adment has been adopted by lead\u00ading organ\u00adi\u00adsa\u00adtions such as Microsoft, Deloitte, Adobe, and Gen\u00aderal Elec\u00adtric since 2015. All of these household brands have abandoned traditional once-a-year performance reviews in favor of regular \u201ccheck-ins\u201d and frequent (even real-time) feedback.<\/p> These regular per\u00adfor\u00admance dis\u00adcus\u00adsions are typically devel\u00adop\u00admen\u00adtal and future-focused. They provide team mem\u00adbers the chance to explore what went well and how they replicate the suc\u00adcess again, any chal\u00adlenges they are encountering and how they can be over\u00adcome \u2014 and agree on measures that both the indi\u00advid\u00adual and man\u00adag\u00ader must do to devel\u00adop the indi\u00advid\u00adual and further improve their per\u00adfor\u00admance. Such check-ins are also a wonderful way to address employ\u00adee devel\u00adop\u00adment while also offer\u00ading train\u00ading oppor\u00adtu\u00adni\u00adties and reg\u00adu\u00adlar\u00adly rein\u00adforcing per\u00adfor\u00admance expecta\u00adtions.<\/p> There are a few basic ele\u00adments involved in cre\u00adat\u00ading an effec\u00adtive per\u00adfor\u00admance man\u00adage\u00adment process, which includes:<\/p> You must set goals correctly. They must be meaningful and understood. Employees should understand why these indi\u00advid\u00adual goals are important and how they contribute to the organization’s goals. Employees will care considerably more about their responsibilities and be a lot more engaged if they realize \u2014 and truly understand \u2014 why their job is important.<\/p> Goal setting<\/a> should be a collaborative process. Whereas goals used to trickle down from higher-ups in an organization, modern com\u00adpa\u00adnies are align\u00ading goals upwards. So goal set\u00adting should include meet\u00ading with employ\u00adees and being open about com\u00adpa\u00adny goals, direction, and obsta\u00adcles. Armed with this infor\u00adma\u00adtion, employ\u00adees can cre\u00adate objectives that com\u00adple\u00adment organ\u00adi\u00adsa\u00adtion\u00adal objec\u00adtives and make daily deci\u00adsions to further these objec\u00adtives.<\/p> Furthermore, when employees are put in the driver’s seat and permitted to devel\u00adop their own goals (before having them authorized by their line man\u00adag\u00ader), they feel a greater feeling of auton\u00ado\u00admy and own\u00ader\u00adship over their job. This invariably leads to better employee performance.<\/p> Employ\u00adees want \u2014 and deserve \u2014 their managers and leaders to be honest and authentic at all times. They don’t want to be in the dark while their companies are struggling. So, they wish to be up to date on current events. They also desire real-time com\u00admu\u00adni\u00adca\u00adtion while developing healthy relationships with their coworkers and managers. This will necessitate regular feedback and open discussion \u2014 even if such com\u00admu\u00adni\u00adca\u00adtion is difficult or uncomfortable.<\/p> An effective per\u00adfor\u00admance man\u00adage\u00adment sys\u00adtem should prioritize employee recog\u00adni\u00adtion and reward. Employees should feel valued and appreciated for the work they accomplish and the effort they put in. If employee recog\u00adni\u00adtion is not a top priority, it will most likely harm your voluntary turnover.<\/p> The more fre\u00adquent and pre\u00adcise the feed\u00adback, the better the indi\u00advid\u00adual per\u00adfor\u00admance. It’s as simple as that. Employ\u00adees desire regular insights into their job, and the better-informed employ\u00adees are about their per\u00adfor\u00admance, the better able they are to improve and thrive.<\/p> No ambitious top per\u00adformer wants to stay at a com\u00adpa\u00adny long-term without hon\u00ading and devel\u00adop\u00ading skills. Advance\u00adment and devel\u00adop\u00adment are impor\u00adtant to employ\u00adees \u2014 not to mention, com\u00adpa\u00adnies benefit when employ\u00adees are more skilled and capable.<\/p> Having all of the ele\u00adments of the per\u00adfor\u00admance man\u00adage\u00adment cycle in place is critical, but it does not guar\u00adan\u00adtee effec\u00adtive per\u00adfor\u00admance man\u00adage\u00adment for your organ\u00adi\u00adsa\u00adtion. There are other more factors at work, including:<\/p> Of all, understanding the theory of performance management is one thing; putting it into practice in a real firm is quite another. Let’s look at some real-world examples of how the performance management process works:<\/p> Cargill, a Minnesota-based food manufacturer, and distributor with over 150,000 employees, demonstrates that even large corporations may abandon cumbersome performance reviews and implement a new system. They developed their \u2018Everyday Performance Management’ system in the process to the most recent study on management discontent with old performance management processes. The system is intended to be ongoing, with daily activity and feedback blended into talks that solve problems rather than rehash past activities.<\/p> The Everyday Performance Management system produced overwhelmingly positive results, with 69 percent of employees reporting that they received useful feedback for their professional development and 70 percent reporting that they felt valued as a result of continuous performance discussions with their manager.<\/p> It’s no surprise that Google would appear on a list of organizations that use a newer, more innovative management system. This organization has always been a trailblazer, and its performance management process basis is on data and analysis, as well as ensuring that their managers undergo proper training.<\/p> When evaluating their performance management system, Google initiated a project dedicated to reviewing its managers, which has resulted in a detailed training and future development process that prepares managers, and thus employees, for success.<\/p> They also utilize a goal-setting system that has spread across different industries. They redefine the goal-setting process using their Objectives and Key Outcomes (OKRs) system,<\/a> with excellent results.<\/p> Accenture is a major corporation with over 330,000 employees, therefore upgrading their systems requires a significant amount of effort. When they transitioned to their new system, they eliminated almost 90% of the previous process. They are now employing a more fluid performance management process in which employees receive continuous, immediate feedback from management. This has been accompanied by a renewed emphasis on rapid employee development and the development of an internal app for communicating comments.<\/p> All of these cases have some things in common. Rather than using a one-size-fits-all strategy, each organization has created a system that works for them. What works for one firm may not work for another; it all relies on the industry, the organization’s speed and adaptability, and the overall objective of the system.<\/p>Performance Management Cycle<\/strong><\/span><\/h3>
<\/a><\/figure>What Does the New Con\u00adtinu\u00adous Per\u00adfor\u00admance Man\u00adage\u00adment Cycle Look Like?<\/strong><\/span><\/h2>
What Are the Basic Elements Required for Effec\u00adtive Per\u00adfor\u00admance Man\u00adage\u00adment Process?<\/strong><\/span><\/h2>
#1. Setting Goals<\/strong><\/span><\/h3>
#2. Trans\u00adpar\u00adent com\u00admu\u00adni\u00adca\u00adtion and col\u00adlab\u00ado\u00adra\u00adtion<\/strong><\/span><\/h3>
#3. Employee Recog\u00adni\u00adtion<\/strong><\/span><\/h3>
#4. Honest and regular feed\u00adback and reviews<\/strong><\/span><\/h3>
#5. Employ\u00adee devel\u00adop\u00adment<\/strong><\/span><\/h3>
What Is an Ef\u00adfective Employ\u00adee Per\u00adfor\u00admance Man\u00adage\u00adment?<\/strong><\/span><\/h2>
Real-World Examples of Performance Management<\/strong> <\/span><\/h2>
#1. Cargill<\/strong><\/span><\/h3>
#2. Google<\/strong><\/span><\/h3>
#3. Accenture<\/strong><\/span><\/h3>
#4. Facebook<\/strong><\/span><\/h3>