Month: July 2021

Big companies are making changes. Soon smaller companies will follow suit. Patterns are beginning to emerge:

• The nature of some companies is such that their objectives can change quite rapidly. Such companies cannot measure their employees’ performance against annual objectives.
• Big companies are testing new ideas that give employees constant feedback and coaching.
• Companies are collecting more objective performance data through systems that automate real-time analyses.
• Better data is bringing about a shift in emphasis from reflective evaluations to fact-based performance and development discussions, which are becoming frequent and as-needed rather than annual events.

Research and surveys show that there’s no need to reinvent the wheel when it comes to new performance management systems. The key is to conduct performance reviews in such a way that they improve individual and team performance in alignment with organizational objectives and priorities, and the employee experience and business outcomes.

Coaching Employees, and Managers too

Giving feedback is a crucial part of the performance appraisal process. However, this feedback is of no use if employees don’t know what to do with the feedback, what to do with the feedback to improve. Managers need development to show their team how to get work done well. While this is beneficial to the employees, it’s also beneficial for managers who are evaluated on their ability to engage their teams.

Integrate technology in the performance appraisal process

Organizations that integrate performance tools into the real workflow are much more likely to see positive results from the process.

Clearly defined criteria for compensation

It can be very demotivating when an employee feels that their pay is unfair and does not match with their contribution or achievement. Therefore, it’s very important to have a compensation plan in place that is transparent, clearly-defined, and easy to understand. This plan must be clearly established with everyone in the organization so that there is no ambiguity in what to expect.

Set flexible goals

Instead of having a top-down approach in setting SMART goals set annually, set flexible goals that allow format and timing to be tailored to the work.

Team performance vs. Individual performance

Organizations are not about individual performance anymore. As human beings, it’s hard for us to function alone. How an employee performs within a team and within an organization is what defines success. Organizations that focus on team or project objectives perform far better than those that focus on individuals.

Different criteria for different decisions

Use different criteria for different decisions to ensure ratings are fair, instead of using performance ratings as the basis of all talent decisions, compensation and promotion. Calibration sessions can be conducted to ensure ratings are fair.

Performance Management systems set in line an organized and systematic way of progress review, goal setting, communication, recognizing and rewarding achievement, providing feedback for better performance and implementing employee development programs. It is a continuous process, which is carried out right from the time when an employee joins an organization till the time he or she leaves . Performance management in HR is aimed at improving the overall corporate performance by enhancing individual performance within the framework of a team. It pushes for optimum performance by setting the right expectations, communicating effectively, defining clear roles, and setting achievable objectives.

Various Components

Feedback on the Performance followed by personal counseling and performance facilitation: Feedback and counseling is given a lot of importance in the performance management process. This is the stage in which the employee acquires awareness from the appraiser about the areas of improvements and also information on whether the employee is contributing the expected levels of performance or not. The employee receives an open and a very transparent feedback and along with this the training and development needs of the employee is also identified. The appraiser adopts all the possible steps to ensure that the employee meets the expected outcomes for an organization through effective personal counseling and guidance, mentoring and representing the employee in training programmes which develop the competencies and improve the overall productivity.

Performance Appraisal and Reviewing: The appraisals are normally performed twice in a year in an organization in the form of mid reviews and annual reviews which is held in the end of the financial year. In this process, the appraisee first offers the self filled up ratings in the self appraisal form and also describes his/her achievements over a period of time in quantifiable terms. After the self appraisal, the final ratings are provided by the appraiser for the quantifiable and measurable achievements of the employee being appraised. The entire process of review seeks an active participation of both the employee and the appraiser for analyzing the causes of loopholes in the performance and how it can be overcome. This has been discussed in the performance feedback section.

Manager Reviews

A manager review is a process whereby an employee is asked to assess the performance of their managers, identifying potential coaching opportunities. This provides managers with the opportunity to receive constructive feedback from their employees about the core skills and competencies needed to lead a team effectively.

As HR, manager evaluations can also be used to identify areas that coincide with the organizational goals and objectives, and can help you identify which managers need more development support in their role.

Performance Improvement Plans: In this stage, fresh set of goals are established for an employee and new deadline is provided for accomplishing those objectives. The employee is clearly communicated about the areas in which the employee is expected to improve and a stipulated deadline is also assigned within which the employee must show this improvement. This plan is jointly developed by the appraisee and the appraiser and is mutually approved.

Engagement Surveys

Conducting engagement surveys is an effective way to gain insight into what matters most to your employees. As the name suggests, the primary reason for carrying out engagement surveys is to uncover if your employees are engaged or disengaged, and to provide inspiration for how to improve this.

There is no ‘right’ way to measure employee engagement, but some commonly assessed factors are: career advancement, recognition, pay & benefits, training & development opportunities, leadership, work environment, etc. Aside from measuring engagement and providing you with valuable insights, it has the added benefit of giving employees an opportunity to voice their concerns, and comment on what is being done well within the company. These results in-turn highlight areas for improvement and development.

Rewarding good performance: This is a very vital component as it will determine the work motivation of an employee. During this stage, an employee is publicly recognized for good performance and is rewarded. This stage is very sensitive for an employee as this may have a direct influence on the self esteem and achievement orientation. Any contributions duly recognized by an organization helps an employee in coping up with the failures successfully and satisfies the need for affection.

Potential Appraisal: Potential appraisal forms a basis for both lateral and vertical movement of employees. By implementing competency mapping and various assessment techniques, potential appraisal is performed. Potential appraisal provides crucial inputs for succession planning and job rotation.

Social Recognition

Social Recognition or simply ‘recognition’, is the process of providing employees with the tools to create meaningful relationships with each other. Such tools include feedback apps that empower employees and encourage them to celebrate the small successes and behaviours they experience each day with each other.

Performance Planning: Performance planning is the first crucial component of any performance management process which forms the basis of performance appraisals. Performance planning is jointly done by the appraisee and also the reviewee in the beginning of a performance session. During this period, the employees decide upon the targets and the key performance areas which can be performed over a year within the performance budget, which is finalized after a mutual agreement between the reporting officer and the employee.

Performance management is a much broader system as it is linked with the processes of planning, implementing, reviewing and evaluating, for augmenting growth and productivity at both the individual and organizational level.

Need

• Appraisal data can be used to spot flight risks, underutilized, high performing employees or low performing employees who are consistently below standards.
• Employees and Managers to set goals and track progress with shared tracking tools.
• Goal tracking throughout the year leads to improved productivity and improved productivity. Managers and employees can work more collaboratively ensuring expectations are set and met.
• Collect data and allows leadership to make informed, data-based decisions.
• Automated reminder emails encourage employees to take notes on their accomplishments all year long allowing for improved communication throughout the year and more well-informed appraisals.

Importance

Increases Employee Retention

Performance management also encourages organizations to reward and recognize their employees. Lack of recognition is a big reason some employees leave a job and look for another. They want to be appreciated for their hard work. In addition to the clarity, the ability to share feedback, and the additional training when needed, rewards and recognition can play an important role in employee retention.

Provides the Opportunity for Exchanging Feedback

A lack of communication in a relationship is grounds for trouble, and this includes working relationships. Quite often, management speaks to employees about their performance, but employees do not very often get a chance to voice concerns or frustrations. Effective performance management provides an avenue through which both the employer and the employee exchange feedback. In addition to gaining insight, employees often feel much more valued when they can voice their thoughts.

Provides Clarity in the Organization

It is a common problem that many employees are unsure of what exactly their role entails, what is expected of them, and who they are to report to. Through performance management, the company can make all of this very clear. A lack of understanding often leads to a lack of productivity. Therefore, by providing clarity for employees, the result will often be increased productivity and confidence.

It Provides a Look into the Future

By consistently monitoring and managing workplace performance, leaders can see potential future problems. Like with any type of issue, early detection is key. The earlier problems are confronted the less effect that they will likely have.

Helps Create Development and Training Strategies

As mentioned above, the earlier a problem is detected, the better. One of these problems could be that employees do not know how to perform certain processes correctly. If this continues, the organization might fall apart due to oversight. However, with performance management, this would probably be detected. The organization could then create training programs to change the issue into an opportunity for improvement.

Scope of Performance Management

Recognising and Promoting Performance Culture: It is very important that the employees become used to performing better. If the organisation follows performance culture, every employee would be performance oriented and there are minimal chances of dissatisfaction, errors, and wastages among the employees.

Planning Performance Development Activities: To bridge the gaps between standard and actual performance, performance development activities are planned in the organisation. These activities are in the form of on-the-job training, management games, case studies, outbound training etc.

Planning Performance of all Constituents: Performance management activities involve continuous improvement of all the processes and people in the organisation. So, after setting the performance standards, to get the desired results, it is imperative to mould the behaviour and performance of the employees in a particular way so that it generates the preferred output.

Identifying Performance Parameters: When any organisation decides to go for performance management activity, it is very important to decide the parameters of performance, because when the parameters are clear and set, both, the employer and the employees can better understand their role in the activity and can reach to the goal effectively and efficiently.

Creating Ownership: This is one of the most important aspects in the entire performance management initiative. Until and unless the employees feel that they are the owners of their organisation and their smallest leap of step is going to affect the organisation in either a positive or negative way, they will not behave in an expected manner.

Identifying Competencies/Competency Gaps: When we are in the process of moulding the behaviour of the employees, it is important that we understand the competency gaps if any. Gaps are nothing but a space between standard competencies and expected competencies. Once it is identified that there are gaps, these can be healed with the help of training and development programmes.

Setting Performance Standards: Once the parameters are set, the next step is to identify the performance standards. Performance standards are nothing but analysing and finalising the expected level of performance. This is decided in advance so that gaps, if any, can be corrected at the earliest.

Step 1: From the business plan, identify the requirements and competences required to carry it out.

Step 2: Draw up a performance agreement, defining the expectations of the individual or team, covering standards of performance, performance indicators and the skills and competences people need.

Step 3: Draw up a performance and development plan with the individual. These record the actions needed to improve performance, normally covering development in the current job.

Step 4: Manage performance continually throughout the year, not just at appraisal interviews done to satisfy the personnel department. Managers can review actual performance, with more informal interim reviews at various times of the year.

1. High performance is reinforced by praise, recognition, increasing responsibility. Low performance results in coaching or counselling.
2. Work plans are updated as necessary.
3. Deal with performance problems, by identifying what they are, establishes the reasons for the shortfall take control action (with adequate resources) and provide feedback.

Step 5: Performance review. At a defined period each year, success against the plan is reviewed, but the whole point is to assess what is going to happen in future.

Components

1. Establishing Performance: This stage involves the establishment of the performance objectives, competence requirements and performance related agreements with the employees and their supervisors.
2. Performance Planning: This step involves agreeing objectives and competence requirements and agreeing upon performance related action plans, performance improvement and personal development plans.
3. Acting: This involves carrying out various activities required to achieve objectives and plans and observing developments in the overall performance.
4. Monitoring and Evaluating Performance: This involves checking on the progress in achieving performance objectives and evaluating the performance and achievements accomplished.
5. Rewarding: This step involves recognizing the contribution in terms of performance accomplishments and achievements by compensation and rewards.
6. Identifying Performance Problems: It involves identification of the bottlenecks and roadblocks of performance and also areas of improvement.
7. Performance Development Planning: It involves planning of developmental activities so as to enhance capabilities of people and contribute to the overall performance improvement.

Performance management is an ongoing process in organisations. In order to make the organisation successful and progressing, it is very important to have it going in the organisation continuously. And when this happens regularly it comes in the form of periodic reviews.

Pre-Requisites

• A commitment towards recognition of high performance. Rewards and recognitions should be built within the framework of performance management framework.
• Should attract very high levels of participation from all the members concerned in an organization. It should be a participative process.
• Top management support and commitment is very essential for building a sound performance culture in an organization.
• Clear definition of the roles for performing a given job within the organizational framework which emanates from the departmental and the organizational objectives. The system should also be able to explain the linkages of a role with other roles.
• Proper organizational training should be provided to the staff members based on the identification of training needs from periodic evaluation and review of performance. This will motivate the employees for a superior performance.
• Open and transparent communication should prevail which will motivate the employees for participating freely and delivering high performance. Communication is an essential pre requisite for a performance management process as it clarifies the expectations and enables the parties in understanding the desired behaviors or expected results.
• Identification of major performance parameters and definition of key performance indicators.
• Organizational vision, mission and goals should be clearly defined and understood by all levels so that the efforts are directed towards the realization of the organizational ambitions.
• Consistency and fairness in application.