How can you tell if employees are doing the work they are supposed to do? Does their work match the required standards? How are you rewarding employees for good work and managing staff members who are not performing satisfactorily? Find out what an effective performance management system entails and how to design one for your company below.
What is an Effective Performance Management System?
Performance management can be tricky. The field is evolving all the time and human resources and line managers need to keep themselves informed on new trends that arise continuously. A weak performance management system (or worse, none) affects employee motivation and performance.
Several aspects of performance management need to be understood. Firstly, it is a continuous improvement process. It doesn’t only happen during year-end reviews. Secondly, it must be aligned to the strategic objectives of the company. Staff may be doing a good job, but if work doesn’t address the overall strategy, it is not going to take the business forward. Thirdly, it involves ongoing monitoring and assessment throughout the year. If you wait until the final review, you have lost the chance to improve performance during the year. Finally, it requires staff development. This ensures that employees have the knowledge and skills needed to perform their jobs. Setting up an effective performance management system is easier with the help of a solutions expert such as G&A Partners online hr management software that provides the tools you will need.
Designing an Effective Performance Management System
A performance management system must be rolled down from the top of the company to the bottom. In this way, each staff member’s contribution provides the basis for the level above it. Each strategic objective has to be converted into specific key performance indicators (KPIs) with set standards. Each employee must have a job profile that outlines the tasks that they are responsible for. This should be provided to every new employee that is taken on board. A good system will base the performance management contract for every employee on the company’s strategic goals. It will indicate the required tasks, performance standards, and timelines for each goal. When meeting with employees to sign their performance contracts, they should be allowed to communicate their development needs to meet their goals as well as for their career progression. These needs will be incorporated into staff development plans.
Using a Performance Management System to Monitor Performance
It is advisable to hold formal quarterly review sessions which allow staff to convey any problems that are preventing them from reaching their goals. Supervisors should add items to the employee’s development plan if it is a skill issue or indicate what support will be provided to enable the employee to get back on track ahead of year-end.
A feedback session is the chance to discuss and deal with non-performance and agree on the next steps with the employee. It also gives supervisors a setting to provide positive feedback. However, you should not wait for formal reviews to deal with issues or recognize excellent performance.
Bonuses can be linked to the final performance review. This will motivate employees throughout the year.
A performance management system is one of the most useful ways to ensure that the company is on track to meet its overall objectives.