A Guide to Developing a Performance Management Strategy
Performance management can improve employee engagement and thus support employees becoming more productive, develop new skills and actively participate in advancing organisational goals. In addition, an effective performance management strategy can also provide support in improving processes, systems and procedures for greater efficiency and growth.
Performance management is the integrated approach to achieving goals by monitoring and improving the performance of people, teams, and the organisation as a whole.
The traditional structure appears to limit collaboration and innovation and does not promote employee engagement, growth or learning. A growing number of companies are moving to a performance management strategy continuously focusing on individual development, cross-organisational.
Performance Management Strategy Framework
Performance management should always be a shared process between People & Culture/HR, employees and managers. By aligning and informing all stakeholders of their responsibilities, performance management will continue to run smoothly.
- Responsible for strengthening performance by providing clear direction and guidance.
- Evaluating progress, renewing goals and responding to data means being alert to necessary changes.
- Promoting cross-organisational alignment on goals and objectives to meet organisational goals, and develop these larger goals into actionable, measurable individual goals.
- Measuring and monitoring changes, improvements and progress against goals will provide key insights to improve your processes and boost productivity.
- Responsible for achieving individual goals, tracking progress, and communicating with team members and managers.
- Understanding and evaluating current practices to identify areas in need of improvement. This self-auditing process is vital to creating an effective performance management system.
People & Culture/HR
- Sharing best practices and processes for performance management throughout the organisation.
- Responsible for designing, implementing and training on the Performance Management framework.
- Conducting training and activities to develop capabilities and make desired progress. This includes training managers in implementing performance management and communicating with employees.
Align on the Performance Management Principles
Principles should guide the performance management framework. A solid set of principles provides a foundation for employee-focused and growth-oriented performance management.
Empower the organisation’s leadership to provide clarity and lead by example from the top.
2. Open Communication
Make performance management a continuous and collaborative process between managers and employees.
Be open to adjusting the framework if needed, based on metrics and feedback.
4. Promote Employee Engagement
Empower your people to add value and actively participate in the performance management cycle with regular conversations and touchpoints.
Customise the process for different segments and departments, such as Sales, while keeping individual goals aligned with organisational objectives.
5. Keep It Positive and Constructive
Performance management should focus on professional development. Address underperformance separately from the ongoing Performance Management cycle.
Define the Performance Management Strategy
With the principles of performance management in place and with the participation of managers, HR, and employees, the next step is to outline the strategy on how to use performance management to actualise employee potential and promote organisational success.
1. Align Objectives With the Organisation’s Strategy
The purpose, values and objectives of each department of the organisation should support or relate to the purpose, values and mission of the company.
2. Establish Standards, Criteria and Indicators
Establish clear standards and indicators to allow for employees to understand their role. Individual deliverables should be designed according to the SMART acronym: Specific, Measurable, Achievable, Realistic, and Time-bound.
3. Choose the Performance Management Strategy Evaluation Method
Choose from a wide variety of performance management methods such as Management by Objective (MBO).
Read more in our article: Management by Objectives.
4. Performance Reviews
Performance reviews will therefore still be an important part of an ongoing Performance management strategy. During these reviews, job performance and overall contribution to the company are evaluated to improve productivity. It also provides feedback on how your organisation’s processes can be improved to enhance employee retention and satisfaction – and thus performance.
Performance management is an ongoing, constructive and collaborative process. Implementing a tailor-made framework for your organisation, encouraging dialogue, coaching and ongoing feedback, takes some consideration – and the right technology – but once in place, organisations will have the tools to build a better, stronger workplace.