Performance Management Automation
The secret behind an organisation achieving a greater level of success is its robust performance management. It includes the various processes that it puts into place in order to measure and reward the effort of its employees for meeting and exceeding the expected goals. The key to your organisation outperforming your competitors is to improve the morale of your employees, increase their overall productivity, and create a sense of loyalty amongst them through performance management.
A performance management system is effective when it successfully establishes a genuine pay for performance culture which helps to develop employee engagement. The pay for performance process entails linking a company’s compensation process to the individual or team performance by setting, measuring, and rewarding employees appropriately when they achieve the performance benchmarks.
There are multiple ways to create a strong performance management process. However, mostly the performance management process is organised in the following manner:
- The organisation defines and communicates individual goals and the corporate strategy across the company.
- It monitors the progress of the set goals, and manages and provides training to help and support performance.
- It appraises individual performance by providing feedback and formal documentation during the appraisal cycle.
- It renders compensation to its employees based on their individual performance. If an employee meets or exceeds the desired expectations, they are rewarded duly with a high rating which earns them good compensation. If on the other hand, an individual’s performance does not meet the desired standards, the employee is served with a performance development plan in order to address the gaps in his or her performance, and a new performance date is scheduled.
Performance Management Process
Let’s take a look at the step by step process of performance management which is usually followed by most organisations.
- Define and Set Individual Goals
The first step towards performance management is to set the stage appropriately by defining goals at an individual level and aligning them with the overall corporate strategy. Individual goals are not set in isolation; it is a collaborative process between a manager or supervisor and the employee. After the company-wide strategy is established, individual goals are created to support the bigger picture. The supervisor or manager addresses both shared and individual goals, roles, and responsibilities using a SMART goal framework. The abbreviation SMART stands for Specific, Measurable, Achievable, Relevant, and Timely.
Specific: These are well-defined goals which are communicated to the employees to make them understand what exactly is expected out of them, how much, and by when.
Measurable: These goals provide milestones in order to track the progress of employees and motivate them towards achieving them.
Achievable: Success needs to be achieved with dedicated effort displayed by an average employee even it needs him or her to stretch his or her limits to a certain extent.
Relevant: The goals that are defined and set need to focus on their impact on the overall corporate strategy.
Timely: A goal needs to be defined with a specific time line in mind in order to create a sense of urgency for completion.
- Monitor Progress
Managers/supervisors need to keep track of the progress of their employees regarding the goals which were set with appropriate assistance, or training, or resources when it appears to them that the set targets may be missed. Apart from the manager or supervisors, it is also equally important for the employees to track their progress. The secret behind achieving high performance is to review the individual as well as the goals set at a team level, at least once a week or month in order to clarify the focus and use this information as the base during appraisal discussions. Monitoring progress provides you with the opportunity to review and adjust timelines, request for additional resources if required or even revise the goal after gathering more information from other sources.
- The Actual Appraisal Process/Discussion
The appraisal process involves listening, observing, providing constructive feedback, and providing recognition to employees. A lot of performance management solutions these days offer writing assistants and coaching tools to aid managers and supervisors to find the appropriate words in order to provide a constructive analysis of an employee’s performance. One of the most important aspects of the appraisal process is providing feedback about what the employee has learned so far and what the employee needs to improve or learn by creating a plan towards achieving the same. This aspect is an important factor not only for the employee’s growth but also for the overall health of the organisations, since it helps to develop a greater sense of loyalty within employees and helps them to be more focused and engaged in their work.
- Pay-for-Performance Compensation Strategy
In order to retain an organisation’s top talent and drive organisational performance which exceeds all expectations, the pay for performance strategy is one of the keys to achieving the same. This strategy aligns the employees with the goals and objectives of an organisation and motivates and rewards the ace performers, while it continues to develop the under performers to becoming valuable assets for the organisation
Employees need to know that if his or her performance exceeds or meets expectations, he or she will be duly rewarded by appropriate compensation via bonuses, pay raises or rewards for all their hard work. The pay for performance compensation structure encourages and motivates the employees to work individually or even as a group to achieve the common goal.
To create an engaged and aligned workforce, every organisation needs to formulate a first rate performance management plan. Without a robust performance management plan, an organisation may end up losing more time, money, knowledge, resources, and most important of all the competitive edge in the market.