HR Performance Management 101: Top Tips for 2023
Performance management isn’t just an HR process. Managers help facilitate the process by communicating with employees. Employees make and achieve their goals, fill out self-assessments, and sometimes do upward reviews.
Managers and employees make the performance management process come alive, but they don’t create it.
Creating a performance management process is HR’s responsibility, and it can be hard.
What does HR performance management entail? Is HR part of the process once it begins unfolding? What’s the best way to document and manage data?
Read on for answers that will help you create a review cycle that supports managers, employees, and the company.
Overview of HR Performance Management
Why is performance management important?
A performance management process aligns employee performance with company-wide objectives. It encourages employees and managers to develop a goal mindset. It helps them create, support and achieve objectives that fit the company's mission.
Designing a high-performance management system should boost employee engagement. It can also boost productivity and help you recognize high performers.
Performance management is a system of monitoring and evaluating employees. Modern review cycles are continuous; managers correct and reward employees numerous times throughout the year.
Still, someone has to oversee it all.
That’s where HR comes in.
What is the Role of HR in Performance Management?
HR is responsible for a performance management system because HR has a big-picture view. HR must train managers on how to complete the process, make sure forms are filled out, and show everyone how to track goals.
HR scaffolds the experience and helps managers, supervisors, and employees have constructive conversations. HR should also make tweaks to the process so it serves company-wide objectives.
Most human resources departments end up creating the process from scratch. It’s common for HR to use emails, spreadsheets, and Google Docs in the early stages. As the demands of the process grow alongside the team, smart HR departments usually transition to dedicated performance management software.
Before we dig into the benefits of software, let’s get into the meat and bones of the HR performance management process.
The HR Performance Management Process
The task of building, maintaining, and modifying performance management falls on HR’s shoulders.
It’s important to tackle one thing at a time to avoid feeling overwhelmed.
Step 1: Create the review forms and determine who will fill them out.
When creating questions to be answered, use the company’s mission and goals to guide you. Determine if managers will review direct reports, if you’ll incorporate peer feedback, and if you want employees to review their managers. These decisions will help you write questions for the various review forms.
Step 2: Consider how managers and employees will set goals.
Are there a certain number of goals that should be set? Where will you store these goals? How often will employees review them? HR needs to figure out how to measure and track goals. Bias can creep into the process, so having a way to track goals impartially is important.
Step 3: Think about how you’ll formalize feedback.
Do you want managers to present feedback during a scheduled review meeting, or do you want to encourage ad-hoc feedback as it arises? Do you want managers to provide feedback in formal meetings, or do you want to use a system that enables managers and employees to give and receive feedback on an ad hoc basis?
Step 4: Determine how often you want to conduct reviews.
For example, you might want shorter forms and a more informal process if you’re going to conduct reviews often. If you’re going to do annual and bi-annual reviews, you may need a longer process with more extensive paperwork.
Step 5: Figure out a formal way to track and analyze the data from reviews.
Will managers crunch the numbers or will HR take on the job to discover trends? Is someone knowledgeable enough to do it by hand, or do you need software that will do it for you?
It’s a lot to wrap your head around! The good news is that HR performance management software can make it a lot easier.
What is HR Performance Management Software?
It isn’t uncommon for HR teams to feel like they’re on their own when designing a performance management process. Many want a unique process, so they use Google Docs for forms and track data on a spreadsheet.
The truth is, HR performance management software exists to make your life easier, and it’s more customizable than ever.
A tool like PerformYard provides you and your team with a single dashboard where everyone can keep track of goals, as well as give and receive continuous feedback. It makes cataloging, reporting, and analyzing data easy. It can even display data in bar graphs, line graphs, and pie charts without anyone having to crunch the numbers by hand.
One of the most appealing aspects of dedicated performance management software is that it can connect with the tools you're already using. It can integrate with HRIS systems, SSO providers, and even Slack and Teams.
Its entire purpose is to streamline performance management without forcing you into a box. It’s flexible enough to accommodate your needs while making the process easier for everyone.
3 HR Performance Management Examples
Sometimes, the best way to start digging into your performance management process is to see HR performance management examples in action.
A few examples of ways you can frame your performance management process include:
- Forward-looking performance management
- Management by objectives
- 360 Peer reviews
Forward-looking performance management
It isn't uncommon for HR to start with a system of ratings and rankings. It's the way performance management was traditionally done in the past. Not to mention, it is the easiest way to wrap your head around performance.
However, this ends up pitting employees against each other. No matter how hard they work, they could still end up in the bottom 10 percent because someone has to.
Porte Brown recognized this and decided to do something different.
They designed a system that focuses on strengths-based reviews and evaluations. Instead of managers doling out a number to each employee, the process includes reviews that focus on identifying strengths and opportunities for growth. It supports better relationships between employees and managers so they can focus on the future instead of the past.
Learn more about how Port Browne used PerformYard to create a more effective performance management system here.
Management by objectives
Performance management often feels static. There's a lot of paperwork, and the whole thing ends up feeling impersonal.
D3G wanted a process that reinforced their culture of supporting employee development.
Their new system invites employees into the process by helping them develop quantifiable goals. Once created, managers can help employees track those goals. By focusing on competencies, employees and managers can see if objectives are being met. If they aren’t, they can work together to make adjustments before the next review.
This style of performance management takes the pressure off of individuals. Instead, the focus is on a set of objectives that employees helped develop. This approach keeps things a bit more impartial. Employees feel invited to be part of the process instead of feeling judged.
Learn more about how DG3 uses objectives in its performance management process here.
360 Peer reviews
In a project-based environment, team members work together for months at a time. That’s why 360 reviews have always been important to Egg Strategy. The trouble was, the entire process was manual. It resulted in a lot of extra work without any real meaningful feedback to show for it.
With a PerformYard system in place to automate the process, employees don't have to wait until an annual review to receive their feedback. Because the platform makes it so easy, each employee receives way more peer reviews than they did previously.
It also enabled them to make the switch from anonymous to open feedback. By training employees on how to give good feedback, along with how to receive feedback, they have been able to create a culture of transparency. Employees know what to expect, which makes them happier and more productive.
Learn more about how Egg Strategy incorporates 360 peer reviews into its performance management process here.
What Are the Goals of HR in Performance Management?
It’s easy to get mired in the day-to-day demands of performance management and lose sight of the big picture, but the big picture is where the real growth is.
The goal of HR in performance management is to capture good data and analyze that data so the company can grow and improve. How much can performance management impact the company’s bottom line? Based on the data, what changes can you add that can create an even bigger impact?
That data comes from employees. In an ideal world, it will come from happy employees who want to stick around. Data will reveal high performers and help you figure out how to compensate them. This will help ensure they continue making a difference at your company. The data can also identify employees who need support, so you can provide them with the support they need to be successful.
The trick to getting good data and supporting employees on their professional journey within your company is to make it easy.
When you make it easy to engage in the process, both employees and managers put more in. When they put more in, everyone gets more out of the process.