How a business performs, is down to the people it employs and their performance in their job role. It is not only a strategic business objective but also holds operational value too – without employees, a business would not be able to maintain its operational output. Furthermore, if employees aren’t reaching their individual objectives, then overall business strategic goals won’t be reached either.
Performance management is a holistic process, ensuring employees are actively contributing to wider business objectives. It encompasses everything from good people management to learning and development, as well as measurement of employee performance. At its core, it’s a strategy to reach a high level of organisational performance and developing people so that they understand what the business is required to achieve in order to gain and maintain success.
Many often focus their attention on appraisals and pay-related performance. However, performance management spans much more than these factors. The focus should be on providing a supportive environment for employees, where they can reach their goals, learn and develop in order to not only improve themselves professionally but also aid the businesses to obtain its objectives.
The CIPD state that performance management should align with long-term goals and broader issues and be integrated with various part of the business; it should also aim to improve performance throughout the company and for the individual while improving team and organisational effectiveness. Development should be a continuous process, and behaviour managed in order to maintain healthy and productive working relationships between employees.
There is no one size fits all approach to performance management – what will work for one employee and organisation, may not work for another; the practices you implement should be relevant for the business, and the actual and desired organisational culture of your company. As a guide the process is one which should never be seen as a fully finished task – there’s always room for improvement, so while you should implement a framework as a guide, keep in mind that ‘completed’ doesn’t necessarily mean the task should be concluded and you move on. Once a goal has been reached, another should be implemented.
A performance management strategy benefits those in the business to understand the organisation’s overall goal, how their role will help that goal to be met, the skills required to fulfil that role and the standards of performance which are essential. Employees should also understand how their performance and continuing development contributes to the business, enables employees to see how they are performing in the business and when issues arise, what action should be taken.
The below should act as a guideline as to the ways performance can be managed, but as we have already mentioned, taking a holistic approach and being flexible within your system is advised to ensure that you have a process which works for your individual employees and teams.
Firstly, you will need to set objectives for an employee to achieve. These will ultimately be driven by the long-term business goals you have set, company mission statement and corporate values. In smaller organisations, your business plan may be clearer than in larger organisations where different departments and teams add more layers to the management structure. Any goals you implement should have a clear link between your overall business objectives and those of the individual.
Goals set will often have a time frame associated with them. For example, a sales target is to be met at a specified date, or a project is to be completed by a certain month. These could be results driven and directly work-related or may be more personal development goals which will enable other objectives to be met. Competencies, the way an employee achieves their objectives, will also need to be considered – as these determine how an employee delivers on their goals. Competencies are often determined by the values of the organisation and its culture.
Performance standards should also be taken into consideration when setting goals; these are often objectives which are part of the job role and do not change during the performance review period. Many organisations are taking a different approach to how they manage performance and placing a focus on how individual behaviour and capability contributes to objectives.
It’s important that personal development is considered when managing employee performance, as the attributes, skills and competencies an employee brings to a role will need to be continually renewed. These will often be discussed at performance reviews, when meeting objectives and when developing long-term career aspirations.
A development plan can be implemented to keep a structure to personal goals and highlight the areas of development, how and when this will be achieved, and how this will be measured.
When it comes to an employee’s personal development, the onus is on the business to ensure that the correct opportunities are provided to an individual. This means that the organisation should provide formal training, education and coaching where possible to ensure employee development is maintained.
Measurement of goals
Any objectives that you set will need to be measured in some format. As we briefly mentioned earlier, these could be sales-driven which provides a clearer view of when a goal has been met. However, some objectives may be less clear, such as behaviour-driven goals. It should be made clear to employees how each goal will be measured when a plan is implemented.
In order to drive employee performance to a high-standard, businesses will often use incentives such as a pay increase or another reward; for example, additional annual leave or a one-off bonus. Pay is often one of the most tangible ways to measure performance, as it effectively motivates employees and is a fair way to reward all members of staff. It has also been found to encourage high performance, as it places an emphasis on performance assessment which employees can relate to.
As a business, it’s up to you to decide how often you conduct your performance reviews – you may set targets annually, or every six months, however long you choose, these must be made clear when you set employee objectives.
Alongside and end of performance review, you should also ensure that you conduct regular appraisals and interim reviews to ensure that progress is discussed. As a manager, this is a chance for you to highlight achievements made so far and offer guidance and feedback where needed, as well as identifying any issues which have arisen.
Any meetings that are held should be documented clearly to ensure that progress is being tracked, ready for a formal review at the end of the set period.
The final review meeting should discuss the objectives and whether they have been achieved, as well as whether the competencies and behaviours demonstrated helped to meet these goals. As a manager, you should encourage employees to discuss their development openly and allow them the chance to share what they felt they achieved and what they felt didn’t go so well. This meeting should be an open discussion, and employees should be encouraged to share the areas that they wish to improve on and how they feel they could meet any new goals that are set. The review should be concluded by setting future objectives.
Employee performance is what underpins every business, without the right employees, achieving their individual targets, an organisation is unable to perform to the standard it requires to achieve its own set goals. It is vital for businesses to ensure that employees are away of how they contribute to the company, and are managed in a way that motivates them to reach, and exceed, their personal objectives. When individuals flourish, so does business, which means that ultimately, working conditions, career aspirations and personal development are all improved for an employee.