Ultimate Guide to Performance Management: 5 – Step Process & Best Practices

According to a survey conducted in 2019 by Gartner, more than 80% of organizations are considering making a major change to performance management.

Are you looking to be a part of such an advanced management system where your employees are evaluated every once in a while such that you stay up to date with the growth of your company?

This blog here will give you a brief overview of what performance management is and how to handle it with the below-mentioned 5-step process.

What Is Performance Management?

Performance management is a process!

It involves multiple steps that allow managers to assess their employees’ work. The whole process helps you determine how to support business objectives.

The ultimate goal of a performance management system is to track and improve the skills of employees, that they need to perform their necessary job duties.

There are different elements involved in the performance management process. Some of them are:

• Giving performance appraisals
• Utilizing key performance indicators (KPIs) 
• Employee management dashboards
• Peer review and 360-degree feedback

A similar term to performance management software is performance appraisal. It focuses on the goals and self-improvement of an individual. The core focus of performance appraisal is that the individual can make sure to take the strategic goals of the organization into account.

Performance management is not only important to the organization, it’s essential for the individual as many growth opportunities including bonuses, promotions, and ultimately dismissals, are tied to this process.

Allow us to give you a brief overview of the two types of effective performance management.

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Effective Performance Management

Behavioral Approach

The approach here is to manage who works well and who doesn’t. It is an aspect where you get to know how involved the employee is with the team. Thereby, measuring individual results as well.

In this approach, you evaluate your employees based on their behaviors and effort with respect to other employees as well as the company.

Identifying current behaviors, communicating desired future behaviors, and providing training or coaching to bridge the gap is the simple approach to keeping track of employee behavior.

Results-oriented Approach

This approach to performance management is ideal for quantifiable performance metrics such as meeting a sales quota, clocking billable hours, or reaching certain call statistics.

The main aspect you focus on is the quality and quantity of the end result.

Now that you have understood the aspect of managing performance management, below mentioned are the five best practices to handle performance management.

Performance Management Process

If you are an employer. You might already be aware of the fact that your business doesn’t work without people. And being able to manage your teams is a crucial aspect of productivity and success.

The way you handle your performance management, help your employee stay motivated and to collaborate efficiently with your employees.

5 steps to handle the Performance Management Process:

1. Plan

The first and foremost stage entails setting employees’ goals and communicating these goals with them.

You can start by disclosing them in the job description to attract quality candidates. Depending on the hr performance management process in your organization, you can rate this aspect on the basis of the percentage of goal completion.

2. Monitor

In the second phase, you can keep track of the employee’s performance on the goal. This is where continuous performance management software comes into the picture.

With the right performance management software, you can track your team’s performance in real-time and modify the results if need be.

3. Develop

This phase includes using the data from monitoring and using it to improve the performance of employees.

You can enhance your employee’s performance by providing them with a new opportunity. Start by helping them improve their knowledge and performance on the job, or altering the course of development.

4. Rate

Each employee’s performance must be rated periodically and then at the time of the performance appraisal.

Ratings are essential to identify the state of employee performance and implement changes accordingly. Both peers and managers can provide these ratings for 360-degree feedback.

5. Reward

The appraisal helps your employee feel how important they are to the company. Recognizing and rewarding good performance is essential to the performance management process.

You can do this with a simple thank you, social recognition, or a full-scale employee rewards program.

Apart from these five mentioned steps, let us see how to handle perfect management with best practices.

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Performance Management Best Practices

A performance management software can either help or hinder your workforce. And that too with utmost sincerity.

You need to take the time to evaluate what your employees want out of a performance management process. Begin with talking to your people.

Your employees and managers might have a greater bond, as they work together. They’ll be more than happy to share with you. You might be surprised how many of them have opinions and feedback.

The next step is to convey your findings to the head of HR or directly to the CEO. They can help you sponsor and drive change in your organization.

Share your internal findings as well as evidence-based research from experts that show the impact that an improved performance process can have on business results.

A performance management experience that delivers value to employees should focus on increasing overall motivation.

Check out the following point for a detailed explanation:

Let’s get to the details!

Re-evaluate Goals Regularly

Due to the new and unprecedented situation, the current global economy faces a lot of workloads and has considerably gone through multiple changes. This is the time when you can start evaluating job roles.

Role and KPI realignment can be important to save costs. It will support different functional responsibilities alone and can be used to evaluate employee performances.

Employ SMART Goals

Goal-setting has become critical in the current economic climate! As you re-evaluate with goal-redefining a mandatory aspect a result of the remote work paradigm is to go through the process of implementing goals.

Poorly defined goals can become a cause of bad performance and future worries for good performance.

Goals defined by the organization must be specific, measurable, actionable, relevant, and time-bound (SMART). 

Utilize Ojectives And Key Results

The popular “objective and key results” methodology is implemented by management to set, communicate and track organizational goals for better results.

As this is an overall approach toward goals and employee performance at various organizational levels, it can help incorporate accountability and quantitative proximity of realizable goals.

Have Performance Conversations

A continuous HR performance management system provides more insight into employee performance throughout the year.

You will need to have constant and timely feedback. Thus, go a long way toward improving the productivity and goal-achieving capacity of employees with effective communication.

Standardize And Automate Process

All employees should follow the same performance management process, and be held to an even standard.

In addition to making the process fair, there comes a tipping point when you may have too many employees to manage throughout a continuous cycle, and having a set process and automated software solution to manage performance reviews can be a helpful asset.

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Let’s Conclude!

Performance management software and a feedback system such as the UBS HRMS have become a core part of both our corporate and personal lives.

The more we adhere to it as a company, it helps us with the advanced development of the company. An HR performance management system gives a goal-achieving vantage point.

In the end, open and transparent communication is the key to an end-to-end employee lifecycle management system, no matter what your physical location is.