A Guide To Maneuvering Performance Management Capabilities

How to get the most out of your employees with effective Performance Management


Have you ever wondered what it takes for an organization to be successful? At its heart is an effective and efficient performance management process - a systematic process put in place to ensure that the strategic objectives of the organization are met. Most people confuse it with performance appraisal, but the reality is that performance management is a wider and more complex function of HR. It comprises of multiple activities such as combined goal settings, frequent communications and progress reviews, timely feedbacks and training sessions for improving the performance of employees, rewarding and implementing employee development program.

A strategically implemented performance management system can prove advantageous to an organization, its managers, as well as its employees in different ways. Also, it establishes a positive culture within the organization where not just the teams but also individuals can improve in terms of business processes and skill sets. Although this system is a valuable capability for each organization, it is generally not integrated or well-defined. Let us first understand a few basic components of any performance management system:

  1. Have a clear strategy and a performance management set up, which is understood by all the employees of a company.
  2. Have a process that allows the individuals as well as groups to set goals, targets and performance parameters that contribute to the overall goals and strategies of the business.
  3. Have strong performance measurement at all levels of the process to evaluate the KPIs and key deliverables.
  4. Forming goals as per the SMARTModel.
  5. Have a process for evaluating the poor performance and improve it in a productive manner.
  6. Organize regular and proactive reviews, feedbacks and support from important stakeholders that are affected by the performance outcomes.
  7. Include performance management of budget and finance.
  8. Rewards, recognition and career progression for improving performance.

To achieve constructive outcomes at an individual, a team or an organizational level activity, it is imperative to focus on three aspects of the performance management system, viz. Task, Procedure, and Relationships. Task means the resources involved in the system need to have a sound understanding of the system and its outcomes. Procedure tells if the members are aware of the working and their role in the process. It is important to engage individuals and give them an ownership of their roles. in the Relationships aspect, the behavior of individuals with groups and their impacts are determined. Therefore, it is the TPR model plan that can contribute to the best practice performance management process.

Organizations without a performance management system often experience unexpected consequences like damaged reputation, discontented team members, and angry stakeholders. With this system, such a scenario can be avoided because the process measures the operational performance of the team. A strategically designed set of metrics allows the stakeholders to identify the problems and fix them immediately. Many businesses try but fail due to various pitfalls during the implementation of this system. It is better to be conscious of those challenges and avoid them to run a successful process. Here are a few important success factors for an effective ;performance management system:

1. Performance Ownership: The success of the entire system depends upon the individual effort put in by each member of the process. Whether a part of the team or working alone, each individual must take the ownership of his/her performance as it contributes to the overall business performance.

2. Effective Goal/Objectives/KPIs Setting: Being a productive goal-setting tool, the SMART model is very popular among organizations. Each letter of the SMART model denotes the significant characteristic of an actionable and complete goal.

  • Specific: Does the goal focus on explaining the exact details that can be easily understood by participants and important stakeholders?
  • Measurable: How will the participants know if the goal has been accomplished and measure its success?
  • Attainable: Is it feasible to attain the goal with the given resources in the process?
  • Relevant: Is the goal relevant to the organization’s mission, vision, values, strategies, and principles?
  • Time bound: Is there a deadline date for goal completion?

3. Role of Leader or Mentor: It could be a challenge as an individual to determine your priorities. In such a scenario, the role of a leader, coach or a mentor is indispensable as they support them to prioritize tasks, get accustomed to the ecosystem and even provide resources to the individuals to continually excel in performance.

4. Engagement between Individual and Stakeholder: There are various stakeholders who can impact the performance outcomes through goals and KPIs. It is essential to maintain effective engagement between individuals or mentors with the stakeholders. Besides the motivation and commitment to perform, being aware of reviews, timely feedbacks and progress are also valuable.

For a constructive performance management process, it is imperative to implement the Training, Leadership, and Collaboration (TLC) parameters in any business. As the system revolves around task, procedure, and relationships, organizations must provide training in these specific domains to make the individuals or groups understand what is expected out of them.

Further, an effective leadership will motivate the members of this system to set their performance benchmarks as per the company’s overall goals. Therefore, a mentor, coach or leader attributes to the success of the process. Apart from this, collaboration also plays a vital role to optimize performance management capabilities. Businesses need to create and maintain cordial relationships with various stakeholders for better performance. Also, make sure to utilize digital and social technological advancements as these can have a great impact on the entire HR system.

In conclusion, a performance management system can be considered as a proactive system that focuses on managing and driving the performance of an individual or a team to achieve meaningful organizational objectives. Lack of which can take organizations by surprise. Not just the business but each individual member needs to have a clear understanding of all the aspects of the process to achieve the desired deliverables. With the trust of all stakeholders, it can turn out to be an integrated part of the business operations and support in sustainable growth.

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