Performance management has a positive impact on employee performance and productivity. Data from Development Dimensions International, a leading international company in the field of human resources consulting, shows that the percentage of goals achieved by employees increases substantially when a formal performance management system is implemented.
With a good performance management program in place, managers reported that employees achieved 21.5% more of their goals. Similarly, employees estimated that with an effective system they achieve 8.3% more of their goals.
On another note, in 2010, Gallup conducted research and found that Indian employees, especially those who have worked three to ten years for a company, felt strongly that most systems are not enough to differentiate high performance. It will not be good to throw the baby out with the bathwater. So what are the basics of a good performance management system?
Set clear goals-Senior leaders set goals that are meaningful to the organization and to the team. Goals have to be SMART
1. yesspecific
two. METERmeasurable
3. HASAttainable/Achievable
Four. Rlifting
5. TIME-Bound
Setting clear goals and performance expectations gives employees a clear understanding of expectations and how they can improve their performance. Managers then pass these goals on to their direct reports and set individual goals that are linked to corporate goals.
Prioritize and distribute work-Managers develop and implement project plans to get work done; They prioritize work and set realistic expectations with employees regarding project tasks.
Day-to-day performance monitoring-Managers track employee performance on an ongoing basis and provide timely and accurate informal feedback and coaching. Feedback throughout the year helps employees continually develop and reinforce positive habits. Both Directors and employees have no surprises at the end of the year.
Performance evaluation and provision of constructive feedback-The formal Performance management review process includes Employee Self-Assessment and subsequent review by direct managers. Formal feedback should be honest, but managers should help employees improve by focusing on strengths rather than just beating them on their weaknesses. Thereafter, employees use performance feedback to create development plans (DPs) to improve specific areas.
Pay-to-Performance Linking-Employees receive bonuses linked to merit and salary increases based on the performance evaluation carried out jointly by them.
Research has indicated time and time again that managers are one of the key drivers of employee performance, as they are in direct contact with employees and therefore can help them achieve results. However, despite their importance in the process, managers have room for improvement in performance management activities.
Organizational culture has a high impact on the effectiveness and commitment of managers and leadership teams to performance management. As a result, it is important for an organization to foster a high performance culture by ensuring that managers and employees understand the business strategy and goals. And they focus on the right priorities with a clear focus on delivering better quality results.
Good performance management programs are embedded in the culture and occur throughout the year rather than just during the annual review cycle.
Thank you
Japeet Sethi
