Employee Performance Management Definition & Best Practices

Avatar of Autonomous Autonomous | Apr 18, 2021

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Performance management is a new-age corporate practice that aids dramatic change in the way a company works. This includes an extensive employee performance management network of reviews, training methods, and alignment of goals. This approach helps managers to receive effective training, companies can carry out better reviews and helps teams determine feasible goals.

To fully understand how these small changes can be critical, here are some ways to define this management style and some of its best practices.  

Why do we need performance management?

Performance management does have particular end goals attached to it; that is, we use this process to discern specific outcomes related to employee performance management. For example, managers may utilize it to make decisions regarding compensation adjustments, reductions in staff, or promotions. It was developed from a larger perspective to facilitate employee development, bulk office furniture order, set up mentoring programs, shape the needed training, and build leadership betterment programs.

Why do we need performance management?

When a company says that they would like to undertake employee performance management, they need to keep some of these goals in mind. This clarity drives the success of the entire program and what it’s supposed to correct. Only then can the process be carried out by managers or the human resources teams. 

  • Determine the priorities and strategies set up and being followed by the organization.
  • HR teams set up a two-way communication process between managers and employees to discuss expectations and clarify them.
  • Set up a continuous feedback system for managing performance effectively between managers and employees.
  • Employee delivers their input for bettering the work process, team performance management, and self-evaluation.  
  • The performance of the manager is evaluated.
  • A formal performance review is carried for managers and employees
  • Documentation of all inputs, suggestions, employee feedback, and individual reviews is submitted 

What is performance management like today?

Performance management is much more complex than what’s been described above! It entails communicating with employees via a system that evolves to consider corporate values and individual goals. These are some of the trends in Performance management that have resulted from this evolution.

Changes in the frequency of feedback

Changes in the frequency of feedback

Companies usually underwent an isolated annual performance review. This has changed today, and now companies have a system for permitting feedback that’s frequent and in real-time. That feedback comes from customers, co-workers, and managers. Such systems or platforms permit constructive criticism, actionable insights, and immediate feedback. The data can be quantified, aggregated for a deeper analysis concerning groups and employees.

Communications are better

Communications are better

Managers can use new performance review systems to determine the best approaches when speaking with employees, helping them see how their roles impact goals. In fact, goal setting can begin with the employees, letting them take ownership of goal setting that aligns with bigger objectives. This holds when planning ways to improve remote work performance.             

Training for managers

Training for managers

Performance management relies on managers to a great extent. Those managers could do additional training, leadership development to help employees succeed. Training revolves around helping connect employee goal setting with corporate strategy, career coaching, career-building opportunities. Managers need to commit to regular feedback systems to know how to monitor employees' performance.      

Best practices

Employee performance management is a system of integrated management practices. These practices help maximize the potential of an employee and increase their satisfaction.

Don’t confuse performance management with performance review

Don’t confuse

A performance review tells an employee how he's fared on the job. It is just one more minor step of performance management. Performance management is the entire system that entails all the other procedures.

Identify the purpose or need of managing performance

Identify the purpose or need of managing performance

There should be a purpose behind the performance management system for it to be effective. Is it being carried out for compensation purposes, administrative gains, discover developmental opportunities, or check overall performance? It could be anyone or a whole mix of these objectives.  

Clarify all work

Ensure that the work to be done by the employee is clear to them either as a formal job description or as task-related goals. Only then would manages have a clear idea of how to manage employee performance.     

Set goals along with performance plans

Set goals along with performance plans

Inform employees about your expectation out of them and the tasks that have to be achieved. Next, develop a plan to help your employees get to that end goal. Even the best employees can’t reach their potential if they don’t have a strategy, tools like an office ergonomic chair or office standing desk, data resources, etc.       

Carry out frequent coaching

This applies to new and existing employees; keeping them prepared with the right skills and knowledge helps them adapt. This adaptation refers to getting used to new corporate environments, changing business needs, and working quickly and effectively. Existing employees should be given fair chances to develop new skills, train for new opportunities to prevent obsoletion.   

Formal performance reviews

Formal performance reviews

This is the last step of employee performance management but an essential practice that focuses on the development and not on evaluation. It starts with employee performance evaluation but should revolve around development and improvement. At this point, managers need to sort out aspects within an employee’s performance review, like time, frequency, and personnel involved in that review.       

Training reviewers

The employee performance management process is only as effective as its reviewers. Providing training to a reviewer gives that reviewer a sense of clarity on what they need to look for, devise solutions, etc. They would also be aware of what step comes next to how to handle unexpected problems.   

Final thoughts

Performance reviews aim to isolate ineffective performance and their sources. There could be many sources like external factors, personal problems, organizational policies, etc. The next step is to find solutions that resolve or reduce any adverse effects that could result. It could even lead to performance recognition and rewarding excellent work, but to find that excellence, performance reviews are required.

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