Performance Management: Essential for Organizations and Employees

Performance, Career Advice, Managing, Coaching Managing employee performance plays an essential role in any organization. A performance management process is often used in various decision-making, whether related to employees or to the organization's strategic direction. Performance reviews play a role in managing resources, training and career development, compensation and promotions, and the organization's human resources strategy.

Not only is a performance management system vital for effectively managing resources but also critical for employees. Communication between employees and supervisors is a crucial attribute of a high performing work unit. A two-way conversation allows employees to clearly understand expectations. It also provides insight for managers regarding what is important to the employee, which will translate into what motivates the employee. The manager can use this information to create a happy and high-performing employee.

Most performance management systems have three broad elements: Goal setting, review of the performance, and performance improvement. Below is a review of each one of these.

Goal Setting

Individual employee goals should align with organizational goals; doing so provides a clear link for how the employee contributes to the organization's success. Goals outline objectives for a given period and describe what success looks like for employees. Goals may address projects, elements of the job, behaviors, or how the employee can grow during the rating period. Having a few goals is ideal. The goal should be written in SMART format; in other words, goals should be specific, measurable, attainable, relevant, and time-bound. Employees should be part of the process of goal setting.

Review Performance

The next element in a performance management system is the performance review. Supervisors should meet with the employee often to provide feedback and just a general check-in. Highlight strengths and weaknesses as well as progress in attaining the goals during these dialogues. This is also an opportunity to amend the goal based on changing strategic direction, change in resources, or other situations that impact the goal. The performance review process is crucial for the organization to access employee contributions, training needs, and resource allocation.

Performance Improvement

The final element in a performance management system is performance improvement practices. A performance improvement plan is often used for new employees and employees who are consistently not meeting expectations. It outlines steps the employee can take to achieve the goal; it may recommend training and education as an aspect of the plan. This document can also serve as a legal document to ultimately remove an employee. Working in the improvement plan must be specific and may include consequences for not meeting expectations.

A critical aspect of managing an organization's resources is an effective performance management system. For more information about this and related topics, visit the Career Advice and Management & Leadership sections of our blog.

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