Developing a simple Performance Management System

Sometimes it can be difficult to arrange KPIS and create measurement to align with business benchmarks in-order to build a performance system. Sometimes its hard to identify the needs for a good performance management system. In this article, I have provided few reasons and tips that will assist you in creating a simple performance management system.

 Why do we need a functional Performance Management System?

 1.  To ensure that the business is achieving its performance benchmarks: With a good performance system, you can always keep a watch on performance trends across timelines and quality inputs to ensure that performance goals are always met.

2.   To ensure that all units are contributing efficiently: A good system can help you to identify efficiency and effectiveness of employee’s contribution to the overall targets.

3.   To identify the gaps: A good system can help you to identify performance gaps and assist in developing system and solutions to address the issue and bridge those gaps

 4.  To identify hidden potentials: A good performance system can help you to identify new potentials in your employee through excellent performance. A good system can also provide scope for innovation.

5.   To provide training and development plans: A good system will help you to identify the need for training and development for your employees. It can be used to make a fair decision on promotion, transfer and internal movement.

 6.  To adhere to policies and the employment laws: A good system will keep your business compliant always, by aligning your performance management process to the rules set by the relevant legislation.  

 7.  To create a competitive advantage scenario: By allowing you to take full control of your business, a good performance management system gives you a leverage.

Points to note while developing performance management system

1.    The Position description should be clear of all roles and responsibilities: Mention all duties that need to be undertaken.

 2.    The KPIS developed should be clear, direct and unambiguous: Use simple words and avoid complex sentences to ensure that there is clear flow of understanding.

 3.    Measurements should be aligned to the intended benchmarks: All KPIS should have a target or desired outcome that can be measured.

 4.    KPIS can be categorised by value-based and performance based.

 5.    KPIS should be measured by quantitative and qualitative measures: Keep it simple, identify if you can measure the KPI with numbers for example; 10 sales in a week or 20 appointments in a month. If not then use qualitative measurements, for example; “ensure quality standards are high” or “ensure project meets deadline”.

 6.    Rector scales should be used for easy conversions and interpretation of data: In most cases this will be use for qualitative measurements, for example; “ensure project meets deadline” can be converted as How many projects undertaken and how many completed within proposed time; or “ensure quality standards are high” can be put on a scale of 1-10 to arrive at a quality standard.

 7.    Setting up assessment period: It is vital to set-up an assessment periods to performance manage staff effectively. Assessment periods can vary due to: -

 a)  The age of the business: A young business will require frequent updates on performance as the business is a start-up. Established organisation understand the trends hence they are a little relaxed.

 b)  The type of operation: It also depends on the industry and the operation type.

8. Personal touch: Remember, a performance assessment should always be conducted in person and one-on-one to improve better understanding and build strong relationship.

Hope this article and the tips provided helps you to build your simple performance management system. Please feel free to contact me if you require support in developing Position descriptions or a performance system.