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It is important to keep a tab on how the employees of an organization, along with the organization as a whole performs and meet its daily goals and objectives. The performance of an organization is what decides how successful it is likely to be. Better satisfaction of deadlines and ambitions leads to increased productivity and promotes a sense of healthy competition among the staff. Therefore, performance management is carried out.

Performance management consists of a certain set of activities that are carried out to make sure that goals are consistently being met and that the results are effective and efficient. These activities can focus of the employee, department or even the organization as whole. They may also include the processes to build a product or service.

A performance management system is often used by the managers in order to align the goals of the company to the goals of their employees, thereby ensuring productivity.

As is evident, performance management is most often used in the workplace. However it can be implemented wherever there is any sort of interaction taking place, such as schools, community meetings, sports teams, etc. The performance management process is very similar, regardless of where it is applied.

Performance management can find an application anywhere in the world where people interact with their environments to produce desired effects.

To formally define performance management, as per Armstrong and Baron (1998) defined it as a “strategic and integrated approach to increase the effectiveness of companies by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.”

Employees can be expected to reconcile personal goals with organizational goals to increase productivity and overall productivity.

It encompasses activities such as joint goal setting, continuous progress review and frequent communication, feedback and coaching for improved performance, implementation of employee development programmes and rewarding achievements.

The lifecycle of performance management starts right from the addition of new incumbent into the system and ends when the employee quits the organization. Performance management includes communicating expectations, defining roles within a required competence framework and establishing achievable benchmarks such that there is a significant increase in productivity and profitability.

The performance management process includes-

  • Developing clear job descriptions and employee performance plans which includes the key result areas (KRA’) and performance indicators.
  • Selection of right set of people by implementing an appropriate selection process.
  • Negotiating requirements and performance standards for measuring the outcome and overall productivity against the predefined benchmarks.
  • Providing continuous coaching and feedback during the period of delivery of performance.
  • Identifying the training and development needs by measuring the outcomes achieved against the set standards and implementing effective development programs for improvement.
  • Holding quarterly performance development discussions and evaluating employee performance on the basis of performance plans
  • Designing effective compensation and reward systems for recognizing those employees who excel in their jobs by achieving the set standards in accordance with the performance plans or rather exceed the performance benchmarks.
  • Providing promotional/career development support and guidance to the employees.
  • Performing exit interviews for understanding the cause of employee discontentment and thereafter exit from an organization.

The process aims to align individual employee accomplishments with the organization’s mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. By establishing clear performance expectations which includes results, actions and behaviours, it helps the employees in understanding what exactly is expected out of their jobs and setting of standards help in eliminating those jobs which are of no use any longer. Through regular feedback and coaching, it provides an advantage of diagnosing the problems at an early stage and taking corrective actions.

Software tools in the current market are a great help when it comes to analyzing and managing performances. Tools like VComply constantly track an employee’s performance- how and when he finishes the job at hand as well as the regularity of job completion and the quality of job done.

In conclusion, performance management is not just a passing fad, but is the need in the current times of cut throat competition and the organizational battle for leadership.

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