What is a performance management cycle?
A performance management cycle is a method of guiding employees to enhance their productivity and work quality. The performance management cycle integrates ongoing support, feedback, and evaluations to facilitate employee growth that aligns with the company’s business goals. The cycle includes four components:
- Planning involves establishing a development plan, measurable company objectives, employee goals, and essential behaviors for success.
- Monitoring includes meetings and reassessments to ensure that people continually progress.
- Reviewing occurs at the end of the annual or biannual cycle to enable employees and management to evaluate the process and the results.
- Rewarding includes perks such as salary increases, bonuses, or company-wide acknowledgments, to recognize people for their dedication and incentivize them to continue.
Why should HR leaders care about the performance management cycle?
The performance management cycle provides a framework to nurture employee engagement, productivity, and retention. When managers conduct frequent evaluations, offer two-way feedback, collaborate, and communicate effectively, they can help people:
- Clarify expectations
- Set and achieve goals
- Develop their skills
- Boost their performance
Offering this support helps people increase their value to the company and create a more enriching and meaningful work experience. When people know their employer values their contributions and growth, they’ll be more likely to want to stay at the company and continue developing their careers there.
What can HR leaders do to maintain a successful performance management cycle?
Every step of the performance management process requires attention. HR leaders can incorporate these tips to support a smoothly functioning cycle:
- Set practical goals. Identify the desired outcomes to ensure the goals are both challenging and doable. Also, keep the goals to a minimum and prioritize just a few to ensure people can realistically accomplish them.
- Provide feedback with care. Give immediate feedback rather than waiting a few weeks or months. That said, don’t explode with input upon encountering someone in the hallway. Offer feedback in a private, quiet space, and focus on the behavior, not the personality traits. Make the feedback two-way by asking for the employee’s perspective, and collaborate to establish a development plan that addresses people’s needs or lack of resources.
- Monitor frequently. Monitoring people’s progress often–monthly or every three months–enables managers and employees to stay on top of problem areas. Dealing with issues as quickly as possible can prevent them from accumulating over time and becoming overwhelming.
- Use performance management software. Performance management software can streamline the performance management process by providing a platform for establishing goals and timelines, storing performance reviews, and sharing and portraying data.
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Why should the performance management cycle be a part of modern HR strategy?
By integrating the performance management cycle into the HR strategy, management can promote the company’s success. Every individual in the company is part of the same body, and when each part is healthy and functioning, it means the whole body–or company–can thrive.