Using a Performance Management System

Set Up Your Performance Management System for Success

It is a universal truth that employees have a general dislike for performance appraisal. The process is uncomfortable and time consuming, opening the door for hurt feelings, conflict, and biased assessment. As a result, a great deal of practitioners seek out new and better ways of evaluating performance, many of them landing on performance management. Unlike performance appraisal, which typically involves rating employees once or twice a year on task-based performance, performance management is an ongoing, year-round process that focuses on developing skills and improving performance.

As with any lofty initiative, performance management is highly beneficial if done well, but is, most often, poorly implemented. Here, we will discuss the basic features needed for a good performance management system and some simple tips to set your performance management system up for success.

Performance Management Best Practices

First of all, performance management doesn’t need to be complicated. At its core, the goal of performance management is to develop employee’s talent by setting objectives, providing opportunities for growth, and tracking progress. In addition, you can use it to learn more about your employees, gain their engagement, and take the temperature of performance in your company. These benefits should not be the focus when designing a performance management system for your organization– they are the by-product of a simple system done well. As a start, we recommend any performance management system contain the following:

Goal-Setting for Future Growth

Many people think performance management must be rigid to be effective. We recommend exactly the opposite. In order to be useful, performance management needs to fit your organization and your employees. That means you may need to be flexible with the process to meet the realities of your organization. First, devise loose guidelines for how often employees and managers should meet, what the goal of their conversations should be, and how the development process should unfold. Then, stress to managers and employees alike that these guidelines should be adjusted to each employee’s project timelines, work cycle, and personal goals.

Goal-Setting for Future Growth

One of the major differences between performance appraisal and performance management is the timeline: performance appraisal focuses on past behavior, while performance management targets the future. To keep this long-term focus, performance management makes heavy use of goal-setting and the science behind goal attainment. One of the most important things to remember is that goal setting should be a mutual process – the objectives set should work toward an organization-specific goal, whether that’s preparing someone to take on a new role, or helping a team advance on a project, as well as align with the person’s interests, ambitions, and future plans. Above all, both the employee and leader should work together to reach agreement on the nature of the goals and the priority given to each.

Next, use SMART goal setting. All goals should be:

  • Specific: Give details as to what the goal is, what the final product will look like, and the steps needed to reach these goals.
  • Measureable: Discuss how progress and success will be measured, including objective and subjective metrics of performance.
  • Achievable: Goals are most effective when they are challenging, but attainable. Consider the individual’s current skills and experience when choosing a target for their future performance.
  • Realistic: Consider if achieving the goal is realistic within the financial, social, and administrative realities of the organization. Only set goals that are possible with the support currently available to employees.
  • Time-Bound: Set milestones and timelines for progress. Remember that long-term, undefined goals with no end date easily become low priorities and get forgotten.

At first, choose 3-5 goals to keep development efforts focused. Make sure these goals are as concrete as possible, so it’s easy to tell when they have been fully attained. Remember, these goals can and should be adjusted as time goes on, so prepare to revisit the same topics in future performance meetings.

Consistent Communication Between Leadership and Employees

Frequent communication is the key to making this process work. Employees and their leaders should meet on a regular basis. We recommend every three months. The focus of these internal conversations should be on their progress toward the organizational goals decided above. During these conversations be sure to:

  1. Recognize success: Take the time to discuss how employees are effectively using their strengths and where they’ve shown improvements.
  2. Address issues: Review any setbacks, roadblocks, or issues and strategize how to overcome them.
  3. Look forward: Discuss what problem-solving solutions they’ve used, how effective they’ve been, and plan how to address problems as they arise in the future.
  4. Stay positive: Make sure to keep the tone supportive. Failure and setbacks are an essential part of development.
  5. Re-evaluate goals: Check off any completed objectives, adjust existing goals, and make plans for the next development priorities.

Finally, when possible, leaders should also be available for informal support in between these sessions, to ensure the employee has what they need to succeed.

Using Performance Management in Your Organization

Although using performance management as a stand-alone initiative can have beneficial effects for employees and organizations alike, it can also be harnessed to do much more. Consider integrating performance management into other company-wide initiatives, such as succession planning. Read our blog post to learn more about how performance management and succession planning go hand-in-hand.

How SIGMA Can Help

At SIGMA, we want to help your company develop your potential. Our experienced consultants can help you manage performance in your company with our custom Succession Plans. Visit our Launch Series page to discover how we can deliver your personalized Succession Plan in just 30 days. We also offer long-term consulting services to help you navigate difficult succession planning situations. Contact us for more information on our succession planning offerings.

About the Author

Sharon Van Duynhoven

Office Manager

Sharon brings our tests and assessments from the development stage to marketable product. She ensures quality control at every step of a project, edits technical documents and manuals, and artistically enhances reports and resources. She also manages contracts with clients across the globe and answers technical questions.