A well-defined performance management process can dramatically improve employee engagement, productivity, and the work environment as a whole.
To achieve such benefits, however, it is important to clearly define a performance management process, standardize that process, and make it a mainstay of your organization.
First, we will cover what performance management entails, then we’ll walk you through a template that you can use to develop a performance management process for your own organization.
What is a performance management process?
A performance management process, as the name suggests, refers to a structured cycle of analysis and interventions focused on improving employee performance. It is a continual flow that places emphasis on the employee’s goals and their contributions to your organization.
When constructed and implemented properly, a performance management process can:
- Keep employees engaged and motivated
- Improve employee productivity
- Reduce friction in the workplace
- Maximize the impact of your organization
- Enhance organizational communication
It is important to note that performance management is not the same as transactional management.
The process is not just a matter of maintaining accountability and tracking employees’ productivity against KPIs. It is a two-way communication plan that benefits employees by helping them achieve their own career objectives.
It also helps managers by ensuring that their teams are performing to the best of their abilities.
To affirm that performance management actually generates positive outcomes for your organization, it is necessary to develop a clear process that aligns with the expectations of both the employee and management alike.
Once it is prepared, you will need to take the right steps to correctly implement that process across your organization.
The 4-step performance management process template
[This four-step performance management process template can be modified to suit your own needs.]
Traditionally, performance management has involved setting long-term goals for employees and then, during periodic performance reviews, employee performance is assessed and measured against those goals.
More recently, in today’s agile workplace, some managers have taken to focusing on short-term achievements, either in place of or in addition to long-term milestones.
When setting goals, the SMART framework can be particularly useful.
Set goals that are:
By following this framework, managers can avoid goals that are ambiguous, irrelevant, unrealistic, or unmeasurable.
Some form of monitoring is needed to track employees’ performance against their goals.
The exact type of monitoring can vary greatly and will depend on the situation, the employee, the job, and the goal being assessed.
Here are a few examples:
- Software analytics can offer insight into employees’ software proficiency
- Quotas, such as sales quotas, can measure output
- Customer satisfaction ratings, used in areas such as customer service, can measure customer service agents’ success rates with customers
- Time tracking software can be used to assess productivity and output levels when applied to relevant fields of work
The solutions covered above should not be confused with “employee monitoring,” which often refers to the use of software or tools to track employees’ activities―although the two have a tendency to overlap.
3. Assess and develop
Over time, either at periodic intervals or on an as-needed basis, managers should assess employees’ progress and provide recommended actions for improvement.
As with the other steps covered previously, assessments and recommended actions must be highly personalized, depending on factors such as:
- The employee’s job role
- Their individual goals
- The metrics and KPIs being used
- The performance management process
Some advocate for a 360-degree approach to assessments, which includes collecting input from all of the influencial figures who connect with the employee―from customers to managers to coworkers.
In some cases, this is certainly appropriate, though that degree of performance management can be quite involved and is not necessary in every case.
The results of the assessment ultimately inform the employee development plan, which acts as an upgraded version of the plan set out in the first step covered above.
4. Provide feedback
Many performance management frameworks offer rewards or bonuses, which is certainly appropriate if the employee is meeting or exceeding their performance goals.
However, in most cases, performance evaluations should be holistic. Employees may excel in some areas, and, at the same time, they may need work or guidance in others.
Therefore, feedback should take into account both the employee’s setbacks or opportunites for growth, as well as their progress and shining moments of success.
Need some tips for implementing a performance management process?
Here are a few best practices to follow when implementing the template above:
- Customize the template as needed. Not only should a performance management strategy be customized to suit the individual’s needs, it should also be customized to fit your business. The template above is only one example of any number of possible frameworks. What is important is not the specific terms or the steps, but to cover the key actions, repeat them, and embed them within the business.
- Implement and standardize the process. Any business process, including a performance management process, is only useful if it is standardized throughout your organization. This means documenting the process, adopting it across your departments, and developing and enacting best practices.
- Save time with automation. Automation tools can save a great deal of time and effort. For instance, digital adoption platforms (DAPs) can be used to monitor employee progress and engagement, build workflow automations, improve internal communication, expedite training, and more.
- Adjust the performance management process over time. Just as employee performance is continuously managed and improved, the performance management process should also be refined and adjusted based on its own impact. When necessary, new steps, tools, and tactics can be introduced and tested.
As far as business initiatives go, implementing a performance management plan is affordable and relatively straightforward. And yet, what you stand to gain from it may surprise you―offering insight into employees’ needs, workflows, the workplace, and much, much more.