How to Improve Performance Management: Key Factors for HR

Performance management is an ongoing challenge in most organizations for a wide range of reasons. Chief among them is that they’re often built on random strategies, tactics, and best practices insights gleaned over time. But improving performance management processes isn’t about pulling another strategy off the shelf—or from the most recent article you saw on LinkedIn.

If competency ratings are failing, OKRs are not the solution. In fact, it’s literally impossible to identify what the solution might be without a way of diagnosing the underlying problem.

Effective performance management is created systematically. Effective performance management is about prompting employees to provide feedback on other employees for a business purpose. If this isn’t working for you, chances are it’s related to the overall reason behind your process, the prompts or process you’re using to gather input, the feedback employees are giving, the follow-through, and your overall approach to managing the process. 

Here we help you break down your performance management process and suggest ways you can improve it with a systematic, process-driven approach. 

Streamline your process

If your performance management process has been built piece-by-piece over time, chances are that it’s a mess. Nobody—including HR leadership—knows, for sure, exactly how the process should work from beginning to end. Managers and employees—many who may be new to the organization with no history of how this process has evolved—are often confused and unsure about exactly what they need to do and when.  

Is there a specific form to be used? Should managers (or employees) gather 360-degree feedback? Is there a form required for that? Should employees be formally reviewed before, on, or within a certain time after their formal hire date?  Is a formal review required? Does the manager need to have their manager review the review? And on, and on, and on.

Each of these steps may seem inconsequential, but when taken as a whole, they combine to create a process that can be difficult or even impossible to navigate. 

How does your process currently work? What are the steps? What steps add value? What steps are unnecessary? Who should perform each step? How should they document what they do? 

Taking an inventory of your existing process and then considering how an ideal process should work can be a good starting point for building/or rebuilding a better system. 

If it’s hard for employees—and managers—to participate in your performance management process or they don’t know what to do next, you have a system that is broken.  

Find your purpose

Having a performance management process because companies have performance management processes is not enough of a reason to have one! What’s the purpose behind your process? Why are you putting in place a method for employees to receive feedback from their managers and others? What outcomes are you hoping to attain? How will you know if your process is a success?

Many performance management processes lack purpose. Without a clear purpose it is, of course, impossible to measure effectiveness. We have pointed to five purposes behind performance management. They are:

  • To hold people accountable. While a focus on accountability has fallen a bit out of favor in recent years, it still—for some companies—has a place.
  • To help people develop. This purpose has almost replaced the old focus on holding people accountable as organizations recognize the need to continually build a pipeline of talent not only for leadership positions but to fill other critical roles as well. 
  • To recognize people for their efforts. Recognition is, arguably, an important potential purpose for the work they’ve done. Where this purpose can fall short, though, is where it’s used as the only way people are recognized for their efforts—and often only once a year.
  • To ensure alignment. A performance management process that is designed to create alignment from the top down, and the bottom up, of an organization can help to ensure that everyone is spending their limited resources—time and money—appropriately, and in concert. 
  • To reinforce values. This can be a great purpose to help make values real—to move them beyond something that hangs on the wall to something that employees consider every day as they do their work and make decisions. 

These are the five key purposes behind process management—the why behind the effort taken to share feedback with employees in some formal manner. Importantly, though, you must choose one purpose—not attempt to somehow build in all five! 

Train your managers

Do you assume that new managers hired into your organization know how to conduct effective performance reviews? Do you assume that employees promoted into supervisory, or management positions will know how to do so? Both assumptions lead to inconsistencies and frustration—for management staff as well as employees.

Training is critical to ensure that all supervisory and management staff understand the why behind the process (your purpose) as well as the how—the steps to take to ensure consistency and alignment across the organization. 

It’s also important to understand that training needs to be an ongoing process not just a “one and done” event that takes place when a new manager is hired. As we’ve already discussed, over time things can change and, face it, supervisors and managers have a lot of competing priorities—it’s easy for performance management processes to fade into the background as they focus on other responsibilities. Regular reminders and ready access to information, FAQs, forms, tips, etc., are critical to provide a foundation for ongoing awareness and understanding. 

Fix your prompts

When is the last time you conducted an audit of your performance management process and the forms you use? When is the last time you sought feedback from those using the forms about how challenging, confusing, or arduous the process might be? 

Some review forms can be exceedingly long, hard to understand and contain questions that really are no longer relevant, if they ever were. 

Keep it relevant

Performance management shouldn’t be a check-the-box activity, or a paper-pushing exercise. If you ask managers and employees to complete performance review documents and then never actually look at them or do anything with them, you have a big disconnect and a clear clue that your process is not designed to achieve measurable and relevant outcomes. 

Effective performance management systems today do not rely on a once-a-year exercise—they involve ongoing check-ins and conversations throughout the year to ensure that employees understand what’s required of them, have the resources to achieve their goals and objectives, and have the support to address personal and professional development needs. 

Make sure performance management is not a paper-pushing exercise. If you’ve generated a bunch of forms and then never look at them again, you’re doing it wrong. Add check-ins to spread conversations throughout the year. Use reviews to discuss performance, goals to set intentions, and feedback to connect performance and goals to day-to-day. We’ve used these philosophies to build PerformYard so our users can easily manage an organized, simple and timely process that supports your big-picture goals.

Step back to take a systematic approach to performance management for real and relevant results.

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