What is performance management?

What is performance management?

Performance management is a comprehensive method of tracking employees’ work performances and developing their skills so they can contribute optimally to department and company objectives.

Performance management involves three phases that prompt individuals to improve their performance level:

  • Planning. Establishing and measuring individual goals that also align with company objectives allows HR to assess employee improvements.
  • Check-in. Managers and employees should meet routinely to engage in two-way conversations regarding areas for improvement and progress.
  • Review. Frequent check-ins throughout the year prepare managers and employees for quarterly or biannual performance reviews. These informal meetings help managers accurately assess employee progress, achievements, and performances. 

Why should HR leaders care about performance management?

Providing employees with practical ways to better their work performances through consistent, corrective feedback empowers them during their development journey. A well-planned, standardized approach to performance management can increase:

  • Retention
  • Engagement 
  • Productivity

Implementing a performance management strategy that encourages individuals to heighten their achievements and increase their contributions can promote employee autonomy and motivation.

What can HR leaders do to establish effective performance management?

HR leaders can incorporate the following performance management practices to help individuals sharpen their skills and develop their careers:

  • Decide on a framework. Identify a performance management method that addresses relevant goals and accurately fits the individual positions under evaluation. For example, HR may implement a 360-degree review to gauge personnel development while utilizing management by objectives (MBO) to assess supervisors’ achievements. 
  • Take a positive approach. Treating employees with goodwill and empathy sets the groundwork for check-ins that can inspire positive growth. Rather than leaving an employee with a load of unhelpful, negative feedback, managers should clarify expectations and coach employees on how to progress. 
  • Train managers. Managers are the key players in ensuring successful performance management. The way that they interact with employees can either inspire employees to elevate their performance or demoralize and deflate them. Educating managers to coach employees can positively impact their engagement and productivity.  
  • Be consistent. Routine employer-manager check-ins enable both parties to maintain a connection. Bite-sized, informal meetings allow employees to keep a finger on the pulse of their work performance; when the quarterly performance review rolls around, they can readily digest the feedback they receive.

How does performance management improve company culture?

A performance management system that empowers employees to actualize their potential is a fundamental component of company success. Providing individuals with regular encouragement, support, and direction enables them to become contributing, thriving members of the company. As a result, these engaged employees can help build a healthy, flourishing work culture.