How to Use Performance Management to Drive Individual & Business Performance


How to Use Performance Management to Drive Individual & Business Performance


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Performance Management is a process by which managers and employees work together to plan, monitor and review an employee’s work objectives and overall contribution to the organisation.

It is not just an annual performance review, it also entails the continuous process of setting objectives, assessing progress and providing on-going coaching and feedback to ensure that employees are meeting their objectives and career goals.

Performance Management practices have been in existence for a very long time. As early as the third century A.D., the Chinese Imperial Rater evaluated members of the Chinese court using a scale of nine grades. In the Industrial age, Robert Owen assigned employees a degree of merit represented by a coloured cube which was hung over each employee’s work station.

In the 1960s, Management by Objectives which was first popularised by Peter Drucker in his 1954 book ‘The Practice of Management’ was embraced by the public. This approach addressed issues from previous systems which included setting performance standards and goals and helping employees and organisations align their line of sight. The latter part of this century saw the introduction of concepts like the Balanced Scorecard which was introduced to measure performance and progress in organisations and their employees.

The application of technology to various business processes also permeated the performance management system, and today we have many software which have been invented to manage the performance of both employees and organisations.

Currently, the new Performance Management system being used/proposed in these organisations focus less on employee evaluation and more on coaching and development, shift emphasis from forced distribution ranking of employees and give regular real-time feedback to employees. There has been a marked change in the workforce; from being passive agents to active agents because everyone wants more involvement, more accountability, and more transparency.

Organisations can incorporate Performance Management by implementing the following:

Real-time feedback

In the present workforce, top talents seek employment in organisations that ensure career advancement. The only way an organisation can identify those who deserve this is by getting continuous feedback and performance reviews unlike the earlier models of Performance Management that conducted appraisals once a year. It is essential for businesses to review their goals and objectives as often as the environment and trends change.

Changing Technology

Like technology, performance management systems are an important part of our lives and businesses. Organisations should use technology to involve managers and employees more in their own development. Helping them understand that performance management is not an isolated HR initiative. There are different applications that connect employees in organisations and allow managers assign points (which will appear in social feeds) to employees. The apps help identify top and bottom performers. Managers can meet with employees from time to time to set/review goals and objectives.

Empowering Employees

Organisations have realised that to get the best out of employees, especially in managing their performance, a one-size-fits-one approach is what works. Aside from letting employees be part of their goal setting process, this system requires that managers act more as mentors and coaches as they set goals and work towards achieving them.

Elimination of ratings and ranking

Many new performance systems incorporate the elimination of rankings and ratings in organisations. Comparing an employee to his peers is unhealthy; measure your employees according to their unique skills and abilities and not against someone else. Employees do not like being compared with their peers as this only leads to unhealthy rivalry. They want to know how well they are doing with regards to their skill set and job description, and the ideal workforce is one where employees achieve the most within their own unique skill set.

Organisations should recognise that trends are born every now and then and they must be ready to evolve with the times. They should get acquainted with agile and responsive systems that tell them how well they are doing with respect to their business objectives within a reasonable time frame.

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