It’s a common conundrum in most management circles. Managers know that they need to give feedback to employees and that, theoretically, doing so can help boost performance and productivity. Yet most managers, and many employees, express dissatisfaction with the performance management system process that’s in place in their organizations.
They’re labor intensive. They’re too infrequent. They’re based on faulty assumptions. They’re not aligned with overall organizational goals and objectives. They’re too subjective. They take too much time. And on and on and on.
Part of the problem—in fact, a big part of the problem—is that the performance management framework wasn’t viewed and created holistically. Most of the time it’s a framework that has been developed over time and may no longer contain a cohesive line of sight from organizational strategic objectives to individual employee performance metrics.
Taking a process driven approach to developing a performance management system and process can help ensure that both managers and employees are engaged and that real, relevant and measurable outcomes are achieved.
A performance management system needs to be designed with the unique needs of an organization in mind. It should be aligned and supportive of the organization’s mission, vision and values. And it should provide a useful, and user-friendly process for gathering, sharing, and documenting feedback.
So, let’s take a look at the steps to follow to implement an effective performance management system.
1. Establish a performance management timeline
How often you should conduct formal reviews will depend on your organization’s strategic objectives, business model, sales cycles and other criteria that will vary from one company to another. We believe that your performance management process should be as unique as your company is. While reviews have traditionally been done on an annual basis, many people believe that this is far too infrequent—including employees who prefer to have more frequent development-related discussions with their managers.
2. Determine who should evaluate employee performance
Who should conduct performance reviews and evaluate employee performance? The answer to this question can be both simple and complex. Clearly, those who evaluate employee performance should be those most familiar with the work the employee is doing. But, while it may seem that the manager is the obvious choice, the truth is that others may actually be more aware of employee performance—peers, mentors, even customers. This is the reason that 360 degree reviews have become common in many organizations; it’s a process that involves gathering feedback from a wide range of people who can offer insights into employees’ performance.
3. Choose performance review questions
Asking the right questions as part of the performance review process is critical to ensuring that the feedback will be relevant and aligned with organizational and individual goals. Start with a focus on your purpose for the review. Once you’re clear about your intent, it’s important to frame questions so they are clear and non-biased. The intent of each question should align with the intent of your performance management strategy. Another aspect of performance review questions are ratings. Having a scale with an odd number of choices will result in a neutral option. If you want to “force” a positive/negative choice use an even number of options—for instance a 4-point versus a 5-point scale.
4. Set performance management goals
Establish your goals or approach to goal setting. Will you include some form of goal setting and goal check-ins to help translate performance discussions into action? This is an important consideration because performance reviews should be more forward-looking than backward-looking. In practice, though, too often reviews focus more on past behavior. We believe that reviews should be more developmental—your employees do too. Managers should work with employees to develop performance management goals that are both aligned with organizational goals and reflect employees’ own personal and professional desires. As you set goals, keeping the SMART acronym in mind can help ensure that they’re focused and specific.
5. Consider an employee feedback process
While your formal performance management system may occur on a semi-annual, monthly, or some other timeline, continuous feedback is important. It’s important to think about your employee feedback process and whether it offers feedback, guidance and both positive and constructive feedback regularly enough to ensure employees are getting the coaching and counseling they need. Today’s employees, more than ever, crave that kind of input from their managers and others. Your employee feedback process may occur through 1-on-1s or check-ins, as part of monthly dashboard reviews, etc. Cultivating a culture of continuous feedback can help ensure employees are focused on the right goals and objectives and have the resources and support to be successful.
6. Introduce employee and manager training
Performance management systems are only as good as the interactions they drive between managers and employees. Training everyone, but especially managers, to deliver quality and effective feedback is important to ensure your performance management process is working the way you want it to. Don’t assume that managers—even seasoned managers—have the knowledge and competencies they need to conduct performance evaluations effectively, especially if their experience comes from working in other organizations. Again, each organization is unique and each organization’s performance review process will be different. Make sure you’re taking the time to train your managers, and employees, to participate in reviews that will drive results.
7. Tie it together with performance management software
Successful performance management is about more than just forms and meetings. It’s dependent on a number of steps and processes all coming together to create an aligned and smoothly flowing system. How will you alert employees, and managers, about what they need to do next? How will you follow up with managers who are falling behind? How will you stage reviews when you have more than one source of feedback? How will you ensure anonymous feedback doesn't get released? Will you have HR or managers sign-off on reviews? How will you store and control access to the data? How will you analyze the data? And on and on. Keeping track of, and staying on top of the many moving parts of an effective, and continuous, performance management system can be aided significantly by tying it all together with performance management software. PerformYard supplies the flexibility and personalization you need.