What Is Performance Management and How to Try It Out

In the simplest words possible, performance management is an excellent way to ensure you only keep the right people in your company. However, since we have an inkling that you visited us to find out more details about it, we shall strive to answer the question what is performance management as detailed as possible. Here is all you need to know.

The History of Performance Management

Performance management appeared as a concept in the 1950s. In the beginning, it was viewed and used as a justification for income. Employers also used it to determine the wages of their staff, basing the calculations on how they performed. Apart from that, managers also employed performance management as a way of determining workers to behave in a particular way and to see a certain working outcome.

The theory seemed legitimate enough. However, in practice, things were a little bit different. Performance management did work on those employees who were driven solely by financial gain. Still, there were many others who wanted to actually work, learn, and develop their skills and knowledge. For that category, performance management as it was in its inception years completely failed.

There was a huge gap between the desire to learn and become the best working performer in your field and what performance management had to offer. This large gap became a reality for everyone 30 years on, in the 1980s.

The working class needed another approach to reward and manage performance, a more comprehensive one. Therefore, they altered it fundamentally, and you can see the results of that change in recent years. The process we now have in place is a lot more specialized and formalized.

What Is Performance Management?

As noted above, performance management is a process that seeks to improve an employee’s effectiveness. During this process, the worker and his managers will collaborate for as long as it takes. Their collective goal is to work out a plan through which they can monitor the employee’s contribution to the company. They must also set some projects as well as some milestones for the future.

Before it can set upon developing a system of performance management, any company must make sure it has already implemented some practices which can support it. Here they are.

Make sure that all the jobs have been well-designed.
The jobs must also have a clear description so that the person or persons performing them knows what to do.
Make sure that the individual who is supposed to perform a particular job has actually understood what they were expected to do. Apart from that, you must also make sure that the employee knows the criteria of his performance management review. If he doesn’t, he or she will never be able to match his work with your expectations.
You need to offer specialized training to your employees. Otherwise, you will not be able to say that they didn’t perform as expected.
The work environment must be supportive and positive so that all the employees can perform their best at any given time.

The Characteristics of an Effective Performance Management System

Now that you are familiar with what is performance management let’s see some of the characteristics it should have for it to be effective.

It needs to be job specific.
Cover an entire plethora of employment within your organization.
Align with the strategic direction as well as with the culture which you have set for your company.
Be as practical as possible. Avoid abstract definitions and rules.
It has to be very easy to understand and utilize for all your employees.
Be the source which accurately tells you what an employee needs to do and how he should perform.
Include a process based on collaboration if you want to set some goals and measure the performance when it is based on mutual communication between you, the manager and an employee.
Measure the ‘what’ and the ‘how.’ In other words, you need to assess the results, which would be the ‘what’ and the behavior of each employee or the ‘how.’
Feedback is crucial. As a consequence, you need to include it in the performance management review. You can send positive feedback when the staff has performed well enough. However, you can also send constructive feedback when you believe they need some improvement.
Be careful about sending negative feedback. It is hardly ever a good idea, and it might easily backfire. Therefore, it’s best to keep away from it.
Organize and put at your employees’ disposal opportunities through which they can develop and better themselves. You can also include training in this category.
Make sure that all the plans you have designed for your staff’s growth and development comply with the company’s goals as well as with the strategic direction in which it is headed.
The communication path between a manager and an employee needs to be as clear as possible when it comes to performance management. The worker must thoroughly understand what he or she needs to do.
Identify when an employee has significant results, recognize and reward them.
Support your administrative body in making decisions about contract terminations, promotions, bonuses, and compensations.

How Does Performance Management Work? The Cycle

Independently of what most managers believe, if you peek behind the curtain, you will see that there is a whole lot more to performance management than might meet the eye. Many consider that all they need to do is the yearly meeting for the performance review. However, they are wrong.

Now that we know what is performance management, let’s take a look at the cycle and processes.

Phase 1. Building the Plan

This is the phase in which the manager and employee combine their efforts to do the following tasks.

Review that particular worker’s job description. You want to see if it reflects whatever work he or she has been doing so far. It might be that, in all the time he worked for you, he has taken up some new responsibilities. Apart from that, his job might have changed over the years. Therefore, you need to alter the description if that is the case.
Identify the link between the job the worker has been doing, his job description and your company’s goals. Evidently, they should all align.
Build a plan which will outline the deliverables as well as the tasks that the worker must complete. You can also added what results expect to see from this and the standards you will be using to evaluate the way he or she has performed.
If you can, identify somewhere between three and five main performance objectives for a worker for that year. They can depend on the company’s goals or the direction in which that employee wants to develop.
Tip – these few objectives are the most important part of this whole process. If the worker does not meet them in the allotted time, then he or she may be deemed unsatisfactory to work in your company.
Set some objectives for training. You want to give your employee the chance to better himself so that he can meet the standards you imposed.
If the worker wants it so, you can also add some of his short- and long-term career goals to the plan. Ask in which direction he would like to develop.

Phase 2. Monitoring

So, you have the plan, and you have implemented it also. However, that is not enough. You must also monitor its progress to make sure all is going well.

Still, you must pay attention to this phase because controlling the way things are going does not mean you have to micromanage your employees. Focus on their results as well as on the way in which they behave. You can also watch the team dynamic and how they affect the working environment.

The manager should get together with the employee throughout this phase so that they can complete the following tasks.

Assess if the employee is making any progress toward meeting the company goals.
Identify if there are any barriers keeping him from doing so and what can be done to overcome them.
Share some feedback regarding the progress.
See if there are any changes to be made so that the process runs smooth.
Does the worker need extra support from you, the manager?

Phase 3. Reviewing

Here is what the employees and manager will do during this phase.

Summarize the work the employee managed to do in the time he was given. If you haven’t given him such a period, you may also compare the previous year with this one and see the work differences in productivity and so on.
What were the results, shortfalls, and accomplishments? What does the employee have to say about all this? Listen closely to his opinion as it is the one which matters the most.
Document whatever challenges the employee came across in that allotted period so that you know to avoid them in the future.
If there were any barriers which neither of your predicted or foreseen, discuss them. Did he overcome them? How? Can you document those as well for future reference and other employees’ benefit?

In the end, you, as the manager, must create an official document of the evaluation. Have both parties sign it, if they agree. If the employee doesn’t agree, however, he or she can attach a commentary file to the original one. Have him or her detail what and why he doesn’t agree with the evaluation in itself and its results.

Make absolutely sure that every single employee in your company receives a signed copy of the evaluation document. Another copy must go into his personal file.

So, what is performance management? Now you know.

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