Performance Management and Development: Why is it Important?
According to the CIPD Performance management is the activities and processes that focus on these areas to maintain and improve employee performance in line with an organisation's objectives. Historically performance management was more around a manager having the control as well as these reviews happening only on an annual basis. It was more a competitive model style where managers compared employees’ performance to create competition and which they thought to be motivational, however, this has proved to be ineffective and companies moved to a more coaching & development model. What is an effective performance management and development process?
The statement “people are your greatest asset” is true, however, incomplete. People are your greatest asset only if you create for them the culture to grow. One of the biggest challenges we see in performance management is rather than focusing on development, growth and positive reinforcement managers tend to be stuck on rating their employees. Some people think performance and behaviour are different. I personally disagree with this. Behaviour should be managed with your performance system; for example if you have mentioned that someone is late to work that is basically mentioning their behaviour as part of your performance management system. A good performance management process is collaborative. Below are some items to take into account when creating an effective performance management process:
1) Competencies and skills matrix: Competencies and skills are core to all processes. Clear visibility on them ensures you have the right people in the right positions. Turn your company values into core competencies in addition to having role specific ones. This insures that everyone is being evaluated on the same criteria which also makes business reporting more efficient and is closely tied to the company’s objectives.
2) Goal Setting: Set SMART goals. Goals need to be specific, measurable, attainable, relevant and time bound. Employees should have context into why these goals are important and how do they contribute through their individual goals to the overall organisational goals. Employees will care much more when they know why their job matters. Goal setting should be a collaborative process. Employees’ interest should also be taken into account while tying it to the overall organizational goals. Give your employees some autonomy. When employees are put in the driver’s seat they experience an increased sense of autonomy and ownership over their work which will eventually lead to better employee performance.
3) Honest, clear and regular feedback: Provide continuous feedback and guidance throughout conversations. Always address this with a positive intent. Make sure you set clear expectations so it is clear to the employee what is expected from him/her to deliver. It is not a debate it is a dialog. Some companies would like to keep review processes annual and that is fine but without continuous check-ins these processes will be inefficient. Personally I think a combination of annual reviews and biweekly check-ins are a good combination. Not everyone has coaching skills therefore it is important to train your managers on how to have discussions with employees. 360 reviews are also important in providing richer feedback. Train and design discussion programs with your managers on how to address unconscious bias to make sure these feedback sessions are objective.
4) Transparent communication and collaboration: I cannot stress enough on how important communication and feedback is. Leaders and managers should be open and authentic at all times.
5) Employee Recognition: Employee recognition and reward is a key building block of an effective performance management. Employees should always feel valued and appreciated for the work they do. Recognition can be as simple as a thank you or a praise on a well done job to financial and even career progress. Failing to provide this will have a negative impact on your voluntary turnover percentage.
6) Employee Development: Be an advocate. As part of being a good manager you need to push your employees and advocate for them in their career growth. This will definitely favour higher employee retention rates and improve your team’s level of trust in you. HR should also insure that they have a culture that supports employees’ growth whether it was vertical or even horizontal to help them gain more skills. HR should also ensure that they have the right training and mentoring programs in place.
Another important point to highlight is that leaders should partner with HR to understand, analyse and strategize how they can resolve key challenges in the business like for example high turnover so they must find a solution to decrease turnover which will decrease turnover expenses.
Companies sometimes miss on how important a performance management process is and how having an inefficient one has detrimental effects on the entire company. Not giving feedback to employees lead to employees’ disengagement, higher turnover and reduced relationships. Below are some statistical figures that highlight some aspects of that:
a) HR Daily Advisor has shared that Gallup found that companies who implement regular employee feedback have turnover rates that are 14.9% lower than for employees who receive no feedback.
b) GlobeNewswire has shared in a study that 24% of workers would consider leaving their jobs if they have managers that provide inadequate performance feedback.
c) In a survey done by Zenger and Folkman’s in the past 3 years they shared that 69% of employees say they would work harder if they felt their efforts were better recognized.
d) In the same survey done by Zenger and Folkman’s in the past 3 years they shared that 92% of respondents agreed with the assertion, “Negative (redirecting) feedback, if delivered appropriately, is effective at improving performance.”
e) In Clutch’s HR Employee Feedback Survey in the past 3 years they shared that 68% of employees who receive accurate and consistent feedback feel fulfilled in their jobs.
Finally performance management can be viewed by employees as a threat therefore positioning it positively as a tool to help an employee grow is key. It is important that it is a collaborative process between the different stakeholders which would lead to a company success. Communication is key so leaders need to communicate frequently and transparently to employees. The communication manner should also be positive, demonstrates empathy and dialog based. Finally leaders should lead by example/ they should be role models. Leaders should never take the back seat in performance management. How important is performance and development to you and how are you practicing it in your companies?
By Heba Asaad. Heba Asaad is part of the Solution Engineering department. In this role, she interacts daily with Human Resources professionals from companies of all sizes to find solutions that meet the unique needs of each organization. For over seven years she has helped many companies bridge the gaps between their needs and technology.
