The world of performance management is changing. If your organization isn’t on board, you’ll be left behind before you know it. Of course, the secret to success is to integrate the best performance management system. You can’t do that unless you know exactly what that is, though. This guide will help you wade through the sea of information that’s out there related to performance management and the future of performance management in business, making sure that you understand the most important elements and can incorporate them into your daily operations to improve your business by changing your perspective.

Your Guide to Effective Performance Management: How Does Your Performance Management System Measure Up?

Whether you’re just looking to keep up with the latest trends or you know absolutely nothing about performance management systems, you’ll find everything here that you need to know. Start by learning the basics, and then get the scoop on how to choose your best performance management solutions. Plus, you’ll even find valuable insight into new trends like agile performance management and the infinite mindset. Read on to find out how to step up and stand out with a strong performance culture and more.

What is a Performance Management System?

A performance management system is a very general term used to describe a system or process that is used to evaluate and improve the skills of employees and the success of the organization as a whole in order to accomplish the mission and goals of the business. Although this sounds a little complicated, it doesn’t have to be. Essentially, this system will be used to provide feedback, progress reviews, performance improvement training, and other solutions that are focused on improving performance in the workplace.

This system is critical to any HR department because it helps team leaders and HR managers in many ways:

  • Sets clear expectations for performance
  • Offers an easy understanding of expectations for employees
  • Allows feedback and communication for reinforcement and accountability
  • Offers the opportunity for self-evaluation and goal-setting for employees to monitor and take control of their own performance improvement

Performance management systems come in all shapes and sizes, and many can be customized to fit the exact needs of your organization. Therefore, when you’re looking into this new investment, you’ll need to make sure that you choose a system that, at the very least, contains the elements listed above. Other features and benefits that improve the system are just extra as long as you cover those four elements.

Performance Management: Adopting an Agile Mindset

Traditionally, performance management has been focused on measuring performance and processes over the course of an entire year, which can often result in a negatively anticipated result or create a backward view of things when people should be focused on how they can improve and move forward within their role in the company. It is difficult to determine actual performance among the middle of the pack, with only the high achievers and low performers standing out enough to make an impression.

Plus, when you are only reviewing performance once a year, you’re leaving a lot of potential opportunities for big problems to arise in the meantime and go unresolved until excessive damage is caused. There is also no real scope that can effectively be used to measure or help create improvements with learning and development resources because the span of time is so vast.

The modern world of performance management demands a system that is more adaptable, flexible, and able to evolve with the changing business environment. Dynamic solutions that provide more frequent feedback and ongoing support will prove to be far more successful for any organization that hopes to grow into the future. Traditional performance management focuses on coaching, corrective action, and termination, giving a very negative connotation to the process.

With agile performance management, the focus shifts to a positive approach, with the three tenets of the process being coaching, feedback, and regular communication. See how there is no punishment in the latter example? Agile performance management focuses on providing support and making constant improvements on a day-to-day basis, leaving little need for corrective action and termination as a result of annual or biannual performance reviews.

In the agile process, it’s all about continuous communication and improvement, with flexible goals, consistent feedback and a collaborative effort that focuses on growth and development, not just delivery. Feedback also needs to be a 360-degree process, which means that employees should evaluate managers just as much as the management evaluates the performance of each employee on an ongoing basis. This is the only way that a strong performance culture can be developed—when employees feel like EVERYONE is being held to the same standard, they’ll want to help by performing at their best, as well.

Some of the other tenets of an agile performance culture include things like:

  1. Collaboration: Employees don’t need to be spoon-fed goals. They can assist in setting up their own or helping you identify areas where they could stand to improve. Make performance management a collaborative effort and watch your culture and your employees improve with ease.
  2. Supportive Leadership: Two-way communication is a must in any successful performance management system. Traditional PM solutions were largely based on one-way communication, with the employee simply feeling like they had to sit back and listen or be directed to what exactly they should be doing. This affects productivity and also creates a general feeling of resentment or being targeted. Employees should be given a voice, and communication should always be on a two-way street.
  3. Accountability and Assistance: The old system had accountability, but it lacked assistance. People would be told how they were failing or where they were coming up short, but no one would offer insight as to how to make improvements or obtain the necessary skills to achieve their new performance goals. Sometimes, people weren’t even given a choice in setting their own goals. Without personal accountability and a management staff that is willing to assist people in their performance improvement, no system is going to be effective.

Features of a Strong Performance Management System

AI and technology are changing the way that performance management is handled and for the better. Of course, that also means that there may be different features that you should be searching for in your next performance management system. While there are plenty of great systems out there, the features you should incorporate into your system include:

  • Goal Setting and Objective Tracking: You can’t manage performance improvements if people don’t know what they are improving or if you don’t have metrics in place. Therefore, any performance management system that doesn’t allow for goal setting or planning isn’t really a PMS at all.
  • Communication Tools: In order to help employees with performance, you have to communicate effectively with them. Of course, it also goes both ways. If you have a strong system in place for performance management, it will assist you in creating a culture that includes communication and feedback in an open forum where everyone can feel comfortable speaking up. Keeping in contact helps keep people motivated and keeps you abreast of where they stand and how things can be improved. This way, you can make small changes along the way and have fewer instances of total damage control at performance review time.
  • Performance Reviews: Just because they aren’t the ONLY effective tool doesn’t mean that reviews are obsolete. You just have to approach them differently than you might have in the past. This should include a self-evaluation to allow you to see where people see themselves. You should also consider adding peer reviews and manager reviews from employees to help everyone get a better picture of how they are seen and where they can improve in their roles within the company. When managers are held accountable by employee reviews, productivity increases, and team morale goes up.
  • Feedback (Bad AND Good): Too often, people assume that feedback is always negative. The fact of the matter, though, is that feedback is just any information given to you that provides insight or information on your performance or areas where you are doing well or could improve. Just as you would make a note of performance deficiencies, you should also highlight when employees excel or accomplish something big. Positive reinforcement goes ten times as far as punishment, and it plays a big part in your overall company culture. Don’t just tell people how they’re doing, either. Help them by offering suggestions on how they can improve or what things they can do to contribute more successfully to the team and the organization.
  • Learning and Training Tools: If you’re going to evaluate performance and tell people where they can learn and grow, you should obviously provide them with the resources to accomplish those things. A strong performance management system will include resources and tools that promote development and ongoing learning for employees and managers alike. You can choose to integrate a training platform with your PMS or elect a performance management system that has its own training platform built-in, where you can design and assign courses of all kinds for your employees. These tools should be designed with a positive mindset and encourage your team to want to develop their skills and learn more to become more successful in their roles and careers.

The Problem with Most Performance Reviews

One of the biggest hindrances to successful performance management is the focus of the review and feedback process. The majority of performance reviews focus on past performance and prior mistakes. While knowing these things is important, it is far more important to use these elements to look forward and find ways to plan for a more successful future. Rather than simply stating that an employee needs to improve on their most recent metrics or sales quotas, you should offer positive suggestions and help them look forward to finding ways to improve their performance.

Many performance reviews tell employees all the things they’re doing wrong and do very little to offer assistance in learning to do it right. By dwelling on their shortcomings, you are causing people to struggle with self-esteem and lose motivation to do their job at all, let alone do it well. People who feel like they are constantly being criticized are eventually going to fight back, and they’ll usually do that by leaving for a better working environment.

How to Improve Your Performance Management System

There are a number of different elements involved in any performance management system. Each of them will have different value and merit to different organizations and individuals, but there are some that tend to be more important overall. If you are going to implement an effective, high-quality PMS for your company, certain elements need to be considered.

For starters, the system must be accurate and fairly balanced. Managers must implement a system that uses multiple perspectives to help accurately report on performance in order to find the most effective options for improvement. Individual performance is not just how well someone does a task. It is a combination of all of the skills and knowledge that a person has within the context of their specific job. Some jobs are more difficult than others, for example, so you wouldn’t hold those employees to the same standard as the employees with a simpler role in the company.

You also need a system that is efficient. It should be more than just a checkbox list of skills or accomplishments or a pile of paperwork that takes days to complete. It should efficiently improve the way that people perform to help improve the performance of your organization as a whole. If the system is slowing people down, it’s not helping performance, after all.

Stop Looking at Minimum Metrics

One of the biggest hindrances to successful performance management is the sheer volume of companies and performance review processes that focus on whether employees are meeting minimum goals or achieving certain base milestones. By starting the review on the basis of a bare minimum requirement, you’re setting the wrong tone for your team. You’re not promoting a performance culture but instead a culture of just getting by and crossing off the marks.

Your performance management process needs to look at the potential upper limits and reward people for going above and beyond to achieve their goals. It should provide a clear connection between individual performance and the overall objectives of the organization. It should also foster a sense of accountability and responsibility and make people feel like they have control over their own success as well as the success of the organization just by improving their performance and focusing on a positive performance mindset.

A useful guide to performance management

The Importance of Collaborative Feedback in the Future of Performance Culture

No longer is it acceptable for one manager to write up a performance review and then deliver that review to the employee. While this might be the way it was, things are shifting, and employees are demanding more than a one-person perspective of their performance, which is only offered on a once-a-year basis. Every single PMS that is going to be effective needs to have an option for collaborative feedback from multiple sources. That means that various members of management, as well as peers, should be able to weigh in on an employee’s performance, offer insight and support, and point out accomplishments and things that they are doing well.

There are a variety of data sources that can provide insight into performance, including those outside of the people who are in the organization. The performance management system itself, along with other integrated systems and platforms, will allow you to collect metrics and gather data about how well people are performing by the numbers and get an accurate idea of where people stand. You can’t just look at a list of checkboxes and assume those are a valid representation of performance. Today, it’s much more dynamic and requires feedback on a collaborative basis for best results.

Don’t Forget the Follow-Up

We’ve touched on it a couple of times, but it’s such a crucial element of performance management for 2020 that it is crucial for you to understand the value of follow-up and offering development resources for your employees along with your performance evaluations and feedback on their overall abilities or professional development. If you simply tell people all the things that they could improve but offer no insight or assistance in the form of tools to assist with the improvements, you’re failing your people from the start.

It is important to clarify the exact outcomes and goals that are being set forth and make sure that everyone is on the same page about various coaching conversations. Employees and managers alike should also understand the steps required to take action on the new goals and methods. One of the best ways that you can ensure that everyone is on the same page is to use examples. Whether you have managers watch coaching and training examples live or on pre-recorded videos, you can guarantee that you will be setting them up for better coaching success in their own efforts.

The process of actual change requires your managers to ensure that employees are on par with the goals that have been set forth. They should be checking in and offering support throughout the process of performance improvement in order to give people the resources and tools that they need to improve their own performance in the workplace. To highlight the biggest points, follow-up needs to include:

  • Goals and objectives that are attainable
  • A personal development or improvement plan
  • Actions that will be taken in the upcoming months
  • Reviews of the ongoing progress and job requirements as it relate to performance
  • More frequent communication and review should be conducted on an ongoing basis rather than taking an annual review approach.
  • Less focus on the review process and more focus on the actual improvement phase

The Keyword is “Continuous”

Performance improvement in the workplace today is no longer a static event that takes place once or twice a year. It is or needs to be an ongoing daily practice that focuses on constant collaboration and improvement in all areas of the job role. People should communicate daily about their progress and check in to update their goals on a regular basis. There is a huge disconnect in many companies when it comes to communication and feedback in the performance management process, and that is no longer going to suffice.

Managers and employees alike need to be ready to communicate at all times and discuss ongoing goals and objectives in order to get the most out of their improvement efforts. By learning about and adopting the new school mindset of performance management and finding an effective performance management system, companies will fare much better in all aspects.

The Bottom Line

When it comes to performance management, a big shift is taking place. It’s critical for your organization to get on board and adopt the best PMS platform for the future of your business. This process is undergoing a huge revolution, or shift, in the way things are done. It’s not about rewriting the book but modifying the contents to suit the needs of your team’s performance management and monitoring.

Rather than taking a top-down approach to performance improvement, the new method takes an upward approach, allowing employees to have more control and say in the goals and direction of their career and professional track. They will be able to take a more active, responsible role in their performance improvement, and you will generate an increased sense of autonomy in all employees by taking this new approach to improving performance in the workplace. In the end, everyone will perform better, and the organization will be more collaborative and effective as a whole, thanks to the new methods of performance management and the systems available to manage that process today.