Building an effective performance management process is no easy task. What works for one company may or may not work for another. It’s no wonder why so many companies are struggling to get it right.
While you can’t take a cookie-cutter approach with performance management, there are some best practices to help you get started with designing a successful process that works for your business:
Tip #1: Identify your performance management challenges
Whether you are starting from scratch or are looking to improve your existing performance management process, you want to first look at your company’s business needs, culture, strengths, and weaknesses of any existing HR processes, as well as employee feedback on these processes. This exercise will help you figure out the unique performance management challenges your company is facing, and the guiding principles and objectives you seek to accomplish with your new performance management process.
Tip #2: Assemble your project team
When pulling together the project team to design and implement your performance management process, consider recruiting at least one employee from each stakeholder group within your organization. This diversity ensures your performance management process will meet everyone’s needs and help you gather support and buy-in across the organization.
Tip #3: Define your performance management process
Your project team needs to decide the steps of your performance management process, based on the business challenges and objectives identified. For example, some key performance management activities you should consider include:
- Goal-setting: Managers and employees meet to discuss the goals and deliverables employees are expected to achieve, and the measurements that will be used to evaluate their performance. Setting expectations helps employees understand what tasks are expected of them and why these objectives are critical to the overall success of the company.
- Check-ins: Managers and employees meet regularly to discuss the progress employees are making against their performance objectives, as well as any challenges that may be preventing them from achieving their goals. During these check-ins, managers and employees should also re-evaluate their goals and measurements to see if they need to be adjusted to reflect changing business priorities.
- Ongoing coaching: Managers should engage in ongoing development conversations and work with their employees to identify areas of strengths and development as well as growth opportunities to help improve their performance and to advance their career.
- Real-time feedback & recognition: Specific, relevant positive, and constructive feedback should be solicited and provided to employees frequently and in a timely manner from their managers, peers, and stakeholders. Real-time feedback is a powerful tool to recognize excellent work, engage and motivate employees for success, and help employees get on the right track if they are not meeting their performance expectations.
- Performance reviews: Managers and employees review overall feedback and discuss performance evaluation. Managers and employees sign off on the written performance review form, with performance ratings if applicable.
- Review performance results: Key stakeholders, including HR, senior leaders, and managers, meet to review the results and ensure alignment and appropriate adjustment of performance reviews, as well as ratings if applicable. You should also review company-wide performance trends and gaps, with plans of action to address those gaps.
- Review performance management process: Together with HR, your project team should review overall findings and stakeholder feedback on your performance management process every year to identify trends, areas for improvement, and actions to optimize your current process.
Tip #4: Create a schedule for performance management activities
Regardless of the interval of performance and feedback reviews your project team chooses, you want to make sure the timing of employee goal-setting and performance planning aligns with your organizational goal-setting. Your business objectives should be ready and available to managers and employees when they meet to set their individual goals and performance expectations.
Tip #5: Determine your performance management system
Once you have established your performance management process, your project team needs to decide how it will be implemented and managed. Performance management can be conducted manually using printed or electronic paper forms, or it can be automated by implementing performance management software developed in-house or by an external vendor.
To make an informed decision, it is advisable that your project team conducts research and identifies the pros and cons of each approach, taking into account your company’s resources, existing processes, and timeline.
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