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Peformance Management

Proliant's Guide to Performance Management

Learn more about performance management and the processes that can help you create a memorable experience for your team members.

What is Performance Management?

Performance management goes beyond a simple performance review. Performance management is a dynamic process that continuously identifies, measures, and enhances an employee's performance, aligning it with an organization's mission. An effective performance management process can help organizations improve their ability to track and evaluate how well individual employees accomplish their tasks and goals.

Performance management is an ongoing process focusing on coaching and developing the workforce through year-round conversations between managers and employees. Continuous performance management creates an environment where all employees can excel and feel empowered to take charge of their professional growth.

Why is Performance Management Important?

Performance Management is critical because it helps keep the workforce engaged and motivated, giving organizations a significant edge over competitors offering similar products.
Managers who use performance management resources like tasks, checklists, and documents help them understand their employee's behavior and allow them to identify opportunities for development and set their team up for success.

Performance management is crucial to:

  • Identifying short- and long-term goals
  • Establishing clear performance expectations
  • Providing real-time feedback and continuous coaching
  • Enhancing employee performance and productivity
  • Recognizing training and development needs
  • Boosting employee engagement and retention
  • Gaining insights into counter-productive activities
  • Aligning employee performance with the organization's objectives
  • Transforming the workforce into a strategic business advantage

It is crucial to begin the performance management process before a new employee starts to get the most out of it. By selecting the ideal candidate for the position, the task of managing their performance becomes significantly smoother.

  1. Assess how the department's needs have evolved since filling the last vacant role.
  2. Consider the significance of the position within the organization and envision what accomplishments would define success in that role.
  3. Have a well-defined position and ensure you have an updated job description.

An Effective Performance Management Process

It is essential to have an effective performance management process to tackle various challenges impacting HR, like quiet quitting. Performance management involves ongoing communication between employees and their employers. Many companies find it most effective to follow the performance management cycle for this communication. This cycle ensures a structured process that includes four steps: planning, monitoring, reviewing, and rewarding. 

The performance management process begins with the planning stage.

  1. Define: HR and management meticulously define the job, creating a comprehensive job description, establishing long and short-term goals, identifying key objectives, and developing clear metrics. These goals must be clear, SMART (specific, measurable, attainable, relevant, time-based), and accompanied by well-defined performance standards.
  2. Feedback: Employees get the opportunity to provide their insight and perspective. Because they perform the job, their input regarding skills, competencies, and goals can significantly impact the company achieving their goals.
  3. Approval: Both management and employees mutually agree upon the defined role, goals, and objectives, ensuring a shared understanding and commitment to success.

Monitoring is a crucial component of the performance management cycle. By conducting regular check-ins, weekly, monthly, or quarterly, employers can identify areas of success and improvement and provide support. This proactive approach ensures that employees stay on track and continue to make progress.

Within the monitoring process, companies may establish mini goals as milestones towards the ultimate objective, allowing for a more manageable approach and enabling a clear understanding of the steps required to reach the desired outcome.
A diverse group of individuals can carry out monitoring to ensure a fair and unbiased evaluation. This provides a broader range of support and fosters a stronger sense of community within the workforce, as it encourages the development of professional relationships.

It is vital to evaluate and review whether new employees achieve their goals or not. This evaluation process - typically called the annual performance review - involves reviewing the monitoring throughout the year and reflecting on the work they completed.
If an employee achieved their goals successfully, focus the review on questions that explore how the employee and company benefited. Additionally, consider the next set of goals to help take the individual to the next level.

On the other hand, if an employee did not achieve their goals, concentrate on identifying where they may have gone off track and whether they received sufficient support. From there, you can determine how the employee moves forward, either with the same goal or a different one.

Regardless of the outcome, the review stage allows employers to share feedback. It also allows employees to express their viewpoints on the experience and discuss their aspirations.

The final step in the process is to reward performance. The reward stage strongly motivates employees to achieve their goals to the highest standard. It is also vital for fostering a positive work culture where hard work is acknowledged and appropriately rewarded.

Rewards and ratings should be based on merit, reflecting how effectively employees completed their tasks and the level of dedication they demonstrated. Some common forms of recognition include promotions, bonuses, exciting projects, company-wide praise, and other forms of employee appreciation.

Benefits of a Performance Management Process

More and more organizations are taking the time to define their performance management process because they understand the benefits, including:

  • Clarity: Performance management provides employees with a comprehensive grasp of their expectations, objectives, and accomplishments. This understanding fosters a harmonious work atmosphere where team leaders and members align on deliverables and desired outcomes. Consequently, these work cultures witness a decrease in conflicts, an upsurge in productivity, and an elevation in performance excellence.
  • Job Satisfaction: When employees have a clear understanding of their responsibilities, it opens up doors for self-reflection, enhanced productivity, and the ability to shape their career path. This sense of freedom enables employees to take control of their personal growth and professional advancement, ultimately leading to greater job satisfaction.

What is a Performance Management System?

A Performance Management System is a tool companies utilize to capture and track employees' advancement toward diverse objectives, milestones, and strategic endeavors. It sets a foundational benchmark for evaluating employee performance during a defined timeframe, such as a 90-day evaluation for new hires or a quarterly appraisal.

A performance management system:

  • Facilitates reviews, employee goals, and certifications while keeping important notes and documents for all your employees.
  • Tracks and documents employee incidents' severity, type, and resolution.
  • Allows managers to assign or recommend goals for employees and check on progress.
  • Encourages collaboration by enabling managers and supervisors to work together on a review. 
  • Offers a scoring tool where managers can give a quick thumbs up or thumbs down to a response, add comments, and provide feedback.
  • Manages training opportunities that enhance skill sets.

Advantages of a Performance Management System

A performance management system provides qualitative and quantitative feedback about an employee, leading to many advantages for an organization, including:

  • Creating Efficiencies: A performance management system is essential for gathering important information about employees, such as salaries, targets, goals, and overall performance. These valuable data points empower organizations to consistently make informed decisions when selecting the perfect candidates for specific roles and promotions.
  • Identifying Inefficiency: A performance management system plays a crucial role in determining individuals who may not be meeting their full potential, allowing for the creation of tailored plans for additional training or performance improvement, such as performance improvement plans (PIPs).
  • Motivating Employees: A performance management system is a powerful tool to identify and highlight exceptional organizational performers. This recognition fosters a culture of excellence and serves as a driving force for employees to unleash their true potential and utilize their skills to the fullest. Organizations can acknowledge and reward outstanding employees through various means, such as monetary incentives, prestigious awards, or well-deserved promotions. Doing so reinforces the message that exceptional performance is valued and encourages others to strive for greatness and accomplish remarkable feats.
  • Supporting Objective Decision-making: Unconscious biases are a common trait among humans, making them difficult to identify and overcome. When working with teams, it is natural for some individuals to be favored more than others. However, implementing a robust performance management system empowers managers and leaders to make unbiased decisions, eliminating favoritism, nepotism, and other forms of bias. This system ensures transparency and objectivity by providing data solely based on merit and aligning it with expected targets and goals, ultimately facilitating objective decision-making.
  • Aiding in Training: Organizations provide mandatory training programs to ensure all employees' success. However, some individuals may require additional support or assistance in specific areas. By customizing training sessions to address the needs of underperforming employees, organizations can empower them to enhance their productivity. Utilizing this valuable information, HR and Learning & Development (L&D) teams can effectively strategize and meet the unique training requirements of each individual and department. Organizations can effectively manage and nurture their workforce through well-designed performance management tools and processes. This approach allows for the recognition and rewarding of high performers while providing the necessary support for those struggling. Ultimately, this helps organizations retain top talent and reduce costs by increasing employee retention rates.

Performance Management Best Practices & Trends

For employees to thrive, leaders must prioritize fairness, transparency, and continuous coaching and feedback. When these aspects are prioritized, employees experience a sense of connection with the organization, enabling them to reach their full potential. Here are a few performance management strategies you can implement for optimal results:

Promote a Healthy Company Culture
The foundation of your company's culture lies in how employees accomplish tasks within your organization, and your strategy for achieving performance excellence plays a pivotal role. By coaching your employees in a manner that inspires and involves them, provides continuous feedback, acknowledges their efforts, and aligns their goals, you can cultivate a thriving culture of communication and collaboration where your employees can truly flourish.

Empower Your Employees
It is essential to involve employees in the performance management process to foster a sense of inclusion and appreciation. A successful performance management approach that genuinely engages employees entails the following:

  • Engaging in conversations about performance and development regularly
  • Providing real-time recognition when an employee's work contributes to the success of the business
  • Setting goals and adjusting them as necessary
  • Exchanging feedback that facilitates growth for both employees and managers

You can empower employees with a stronger sense of influence and voice by actively involving employees in their performance management journey. This, in turn, reinforces their dedication and motivation to surpass expectations and excel in their roles.

Combat Employee Burnout
Burnout and its relationship to performance management is one of the most misunderstood concepts in business today. A problem so significant that it costs the workforce an estimated $1 trillion in lost productivity each year. Here are five quick and easy ways employers can improve their organization's culture and fight employee burnout.