Human being has always been aimed at measuring and improving their performance, in breaking records and in targeting ever higher. For business, this is reflected in performance management. Performance management (PM) includes activities which ensure that targets are being consistently being met in an effective and efficient manner. Performance management can focus on the performance of an entity, a department, employee, or even the processes to build a product of service, as well as many other areas.
How to Develop a Performance Management System
Performance management includes more than simply giving an annual review for each employee. It is about working together with that employee to identify strengths and weaknesses in their performance and how to help them be a more productive and effective worker. Step in the process are below.
1. Evaluate your present performance appraisal process. Look at what type of feedback you are giving to your employees. Determine if there is anything you need to change or add to the evaluation itself. You may decide to build on what you already have or to build a new system altogether.
2. Identify organizational targets. Performance management systems help staff members around your entity's targets because they help staff know how they are to be involved in reaching that goal. Take the time to clarify what your targets are for the next year as a company.
- Identify processes or procedures that could be simplified or done more effectively.
- Declare your sales targets for the next year or new products you would like to develop.
- Share your hope for better conversation between departments and staff members.
3. Set performance expectations. As you sit down with each employee, clearly lay out your expectations for them.
- Acknowledge what they are already doing well. Use this to encourage them.
- Share some weaknesses that you have observed in them and in their work habits, and how overcoming those would help their performance in the company.
- Identify specific things you would like them to accomplish over the next year, or whatever time frame works best for you. Prioritize these so the staff member knows which is most important and make sure to give them a deadline for each task.
4. Monitor and develop their performance throughout the year. As employees starts to work on their performance, keep an eye on how they are doing. If they appear to be struggling to meet performance expectations, talk with them and see if you can offer any support or coaching.
5. Evaluate their performance. At each performance review, let the employee know how they are doing. It is often helpful to assign a numeric value on a scale, rating the employee from "not meeting expectations" to "meets expectations" to "exceed expectations."
- Provide feedback on their performance. Be as specific as possible, noting key examples of when they demonstrated a certain quality.
- Talk about the results or rewards of their performances. Let them know if they are on probation, are getting a raise in pay, changes in vacation days, or any other relevant action.
- Discuss any grievances they may be having. Listen to their worries or problems as you talk through possible solutions.
6. Set new performance expectations for the next year. Some items may be the same. However, since these are also based on entities targets, you will need to re-examine your targets for the upcoming year.