Performance Management Process & Best Practices

Performance management is the process of ongoing communication and feedback between a manager/management and employee in order to accomplish organizational goals (Lalwani, 2020). Management of the organization methodically evaluates the employees’ progress of their work roles following this process. Also, this allows employees to identify the areas they should improve to perform well in the organization. Also, management is able to evaluate the achievements and special contributions to the organization by each employee where the process makes a clear platform to decide annual salary increments, bonuses and promotions.

Performance evaluations are done based on Key Performance Indicators (KPIs), Following Performance Appraisals, Peer Review, 360-Degree Feedback, and based on employee management software (Green, 2022)

Performance Management Process

The structure of the Performance Management Process is a cycle comprised the steps of Planning, Monitoring, Developing, Rating & Rewarding. Despite of the frequency of the evaluations, organizations follow these essential steps in the process (Lalwani, 2020).

Figure 1: Performance Management Cycle (Wilshiere, 2023)

1. Planning

The job description outlines the objectives and duties of each employee, therefore it's critical to routinely go over this information with them. Employees at a company will better grasp their work tasks, responsibilities, and the organization's expectations of them with clearly defined and communicated goals (Green, 2022). Also, Planning of Goals follows “SMART” structure as the achievements to be specific, measurable, achievable, relevant and Time-bound.

2. Monitoring

Organizations monitor goal progress in accordance with the plan during the monitoring stage. Additionally, this step is essential for assisting staff in achieving their planning-stage objectives. During this phase, managers watch the worker's performance and activity. Additionally, management keeps track of employees' monthly goals in order to assess their success, rather than just once a year. Organizations support as needed and aid workers in resolving issues while, if necessary, altering the goals (Wilshiere, 2023).

3. Developing

Employee development is the purpose of monitoring. "Developing" refers to enhancing performance through training and process improvement. Also, development initiatives can support effective performance and it enables workers to adapt to changes. This stage also makes use of the information gathered during the monitoring stage (Wilshiere, 2023).

4. Rating

Employee development is monitored using a rating scale that has been shared with them. Employees can use this to gauge where they stand and what they need to do to perform at the next level (Green, 2022).

5. Rewarding

The process's most crucial stage is rewarding. Organizations in this level encourage workers who achieve their objectives or are making progress in doing so. Applaud them for their diligence and commitment to improving themselves and the organization. This can be done through an employee incentives program, public recognition, or bonuses. It stimulates others who might require an additional incentive in addition to inspiring the individual who is receiving recognition (Green, 2022).

Best Practices of Performance Management

Frequent reviewing, developing an advanced performance management software, keeping fairness and balance, following up with actions, and Strengthening relationships are some of the major practices of Performance Management in HRM (Kearl, 2023)

1. Frequent Reviewing

Frequent reviewing of performance is considered a vital factor of performance management by experts. It should not only be limited to an annual or quarterly review and continuous checking allows employees to improve their performance. This mainly assists employees to ensure that they are going on the correct path and also analyzing the progress of the organization (Kearl, 2023).

2. Usage of Advanced Performance Management Software

Performance Management Software effectively gathers data of employees to assist and streamline the process and analyses the data to better and more objectively deliver positive employee feedback. Additionally, these programs offer a wealth of information for assessing individuals' productivity within the organization. Additionally, based on the organization's expectations, values, and goals, the organization is able to gather, analyze, and compare employee data and make comparisons of employees (Martins, 2023)

3. Keeping Balance/Practicing Fair Methods

Fair, open, and impartial evaluation standards are necessary for a successful performance management system. Employers can make sure that their evaluations of staff members are based on their real performance and not on biased or personal assessments by using fair and objective criteria (Cullu, 2023).

4. Following up with Actions

Following up by the management/managers/superiors should be focused with actions in order to materialize the objectives.

5. Strengthening Relationships

In an organization which is having healthy and better relationships among employees and also with managers, superiors, are positive in performing. Borysenko has said “Really smart companies are going to understand it’s about managers developing real relationships with their team and empowering them every single week to see the progress they are making and what’s possible in future” (Kearl, 2023).

Conclusion

Performance Management is a methodical process to measure the employees’ performance in an organization compared with the planned management tasks. Frequent reviews based on a proper mechanism allow the employees and also management to evaluate the achievements/progress of both parties with pre-determined tasks. Performance Management is a process that contains 5 major steps Planning, Monitoring, Developing, Rating, and rewarding. Moreover, organizations nowadays follow many best practices to maintain the standards of performance management and to achieve corporate goals.

References

Cullu, E. (2023) Importance of performance management systems-2023. [Online]
Available from: https://teamflect.com/blog/performance-management/importance-of-performance-management-systems#:~:text=An%20effective%20performance%20management%20system%20should%20have%20fair%2C%20transparent%2C%20and,on%20subjective%20opinions%20or%20biases.
[Accessed 13 August 2023].

Green, S. (2022) The ultimate guide to performance management: 5-step process and best practices.[Online] Available from: https://blog.hubspot.com/marketing/performance-management
[Accessed 13 August 2023].

Kearl, B.(2023) 5 Best practices in performance management that will help employees thrive.[Online]
Available from: https://www.bamboohr.com/blog/performance-management-5-solutions-challenges-face [Accessed 13 August 2023].

Lalwani, P. (2020) What is performance management? definition, process, cycle, and best practices for planning.[Online] Available from: https://www.spiceworks.com/hr/performance-management/articles/what-is-performance-management/ [Accessed 13 August 2023].

Martins, A. (2023)The benefits of performance management software.[Online] Business News Daily. Available from: https://www.businessnewsdaily.com/15893-benefits-of-performance-management-software.html [Accessed 13 August 2023].

Wilshiere, J. (2023) What is performance management cycle?.[Online]
Available from: https://www.oneeducation.org.uk/performance-management-cycle/ [Accessed 13 August 2023].