When we ask ourselves, “How can you empower and engage your workforce to drive bigger business impact?” we get to the heart of performance management.
There is a known link between effective performance management and organizational success. A well-designed performance management system can increase employee engagement, provide talent visibility, improve leadership, and increase employee retention rates.
What may be considered a well-designed system is different for every company. There is no one-size-fits-all solution and there is no “best” way to do performance management. Sometimes methods that work in one company do not work for others. Yet, over the years we have found that many companies with highly operative workforces have common practices.
What do companies with highly effective performance management systems have in common?
They set goals that align with business objectives
This is where talent meets strategic planning. Employees need to understand what they must accomplish and why these actions are important to the success of the organization as a whole. As a result, employees will know what goals they are expected to achieve and what behaviours they are expected to display. This creates a common language that communicates clear expectations between management and employees.
They provide employees with direction
Developing an action plan to help employees to achieve success starts with providing clear and direct discussions about roles, opportunities, and accomplishments. For instance, employees who know exactly what they need to do to be successful will be better able to provide their best work. You can support your employees by providing the tools they need to do this. It’s important that companies create a supportive learning and development environment with both training and coaching opportunities. Regular feedback is also commonly sought and provided.
Their managers are highly visible
Leaders need to be provided with the training necessary to carry out necessary employee development tasks. They need to be held accountable and need to provide meaningful feedback. Regular dialogue with employees is often encouraged and they hold more frequent performance check-ins.
They conduct formal assessments that are fair
Whether or not your company chooses to use a rating system is a personal choice, but it is important that a company has a process to conduct accurate and bias-free employee evaluations. A systematic evaluation ensures employment decisions are fair. When companies do not have a structured evaluation process in place, they often leave leaders to rate employees however they want. When there is no clear guidance or transparency it can be difficult for employees to understand the evaluation process. This can result in an increase in workforce inequity, employee disengagement and in some cases, the potential for legal ramifications.
They reward top performers
Playing to employees strengths means focusing on developing employees to their fullest potential. As a result, this will also encourage future leaders. Keep in mind, it is important to reward top performers without making lower-performing employees feel inferior. Your reward should keep employees motivated to perform at their best, add value for your organization and create positive business outcomes.