What is Performance Management? Our Performance Management Definition
Annual performance reviews are awesome for washing machines and automobiles, but for people, they make no sense. Machines, unlike people, are designed to do the same thing day after day but people are all over the place. Employee performance fluctuates on any given day based on countless external and internal factors. How can any organization optimize employee performance by only checking on their people once a year or every three months? Many Fortune 500 companies have replaced the annual performance review with performance management, a more proactive and practical approach to managing human capital.
Performance management is a continual opportunity for employees to learn and grow within their roles while knowing they can count on the support of their teams and managers. It’s a very high-touch, custom-tailored approach to working with employees in order to help them perform to the best of their individual abilities.
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Corporate, Employee, & HR Performance Management - Are They Different?
Yes, there’s a huge difference: Corporate performance management is the acronym-laden process of evaluating the strengths and weaknesses of a company (SWOT), based on hard data (KPIs) like costs of doing business (COS), revenue (EBITDA) and return on investment (ROI). HR Performance Management is basically a traditional employee annual or quarterly review, rebranded with a new name, but a rose is a rose. Employee Performance Management is an entirely new approach as defined above.
The Making of a Great Performance Management System
- Clarify organizational goals
Being upfront about what your company is aiming to do is something you not only make part of your brand, but you’re also very upfront about it in the interviewing process, at the onboarding, and on a day-to-day basis. If everyone isn’t repeating these same goals in their heads like an annoying insurance jingle, your organization will feel like George Clooney’s ship in The Perfect Storm.
- Define job descriptions
Just like it says: tell everyone exactly what they are supposed to do, whom they report to, assign everyone a mentor, and make it clear that these aren’t rigid—everyone pitches in where needed to achieve those organization goals.
- Cross-departmental communication
See above about organizational goals. Keep communication open with check-ins, messaging apps, PM software, team building, etc. Employees help each other out with servant mindsets, humbly offering talent and time to achieve those goals.
- Develop ongoing coaching, discussion, and feedback
Not once a year or even every three months, but weekly and turn it around. Weekly check-ins are an informal chance for employees to give feedback to their managers and talk openly about things they struggle with. These times are for finding solutions and getting encouragement.
- Conduct scheduled performance reviews & discussions
These are also employee-lead, where employees set their own goals for the next few months. The weekly check-ins act like benchmarks along the way towards those preset goals. A review isn’t so much a performance review (machines) as it is a progress review; thoughtfully determining whether or not employees have achieved their goals and why or why not. It’s an opportunity for employees to learn and grow, rather than a grading or rating system.
- Provide a feedback and reward system as well as promotion opportunities for exceptional performance
Celebrate successes company-wide, not just in the weekly check-in, but with peer-to-peer recognition. Make sure that everyone has a healthy work-life balance and promote from within, encouraging employees to try things outside their comfort zones.
Utilizing Performance Management Tools: Performance Management Software
You don’t have to ask: There’s an app for that? Because there’s an app for everything and performance management is no different. Some of our favorites in no particular order:
This messaging app is perfect for cross-departmental communication as well as for company-wide feedback.
Weekly check-ins within departments.
Project Management software with the ability to hold Campfire discussions over project progress and for transparency within teams
Keeping track of employee goals, training, job descriptions, and progress reviews.
Learning from the Best: Our Top 3 Performance Management Examples
- RIDE (Relationships, Instill Meaning, Development, Execution)
This acronym is the ELM brand’s summary—where relationships are at the heart of everything we do.
- Mentoring and Weekly Check-ins
We mentioned this above, but this article breaks down how to set up a mentorship program in your organization.
Performance evaluations (or progress evaluations) should be structured just like marketing campaigns because they involve people. Here’s a blog about how to use these evaluations to inspire employees instead of strike fear and defeat into their hearts.
Performance management is a human-centric, high touch approach to managing people. Organizations are made up of people, not machinery. Cultivating open communication, setting clear goals, defining expectations, and helping employees achieve their goals all leads to the health and success of the organization.
Author: Jack Makhlouf; Founder and Chief Learning Officer