Creating an Effective Performance Management System

Do you dread conducting the annual performance review with your employees? Do you feel like it takes forever to prepare for it, and that your performance management system isn’t even accomplishing what it’s meant to do?

We wouldn’t be surprised if you said “Yes” to any of the above. Most organizational performance management systems are not doing what they’re intended to do… i.e. increase performance and help meet the goals of the organization. However, they are still critical to an organization’s success. The performance management process should be a positive, productive and collaborative process that affirms the employee’s positive contributions to the organization and highlights opportunities for further growth and development. It should also ensure that the employee’s performance and behaviour are aligning with the overall goals and values of the organization.

“In order for the performance management process to be effective, employees need to be clear about what is expected of them, and need to know how they can meet those expectations.”

There are certain best practices for a successful performance management process that you can put in place. Although not an exhaustive list, this is a great start to creating a performance management system that works!

• Set clear expectations and performance standards for employees. Provide them with a Job Description on the first day of employment and let them know what successful performance looks like. Allow people to manage themselves and increase individual accountability in meeting the organizations expectations as time goes on.
• Provide ongoing, up-to-date, balanced feedback. Have performance discussions frequently throughout the year to identify progress and barriers within the performance plan and adjust where needed. Provide timely recognition on a job well done, and constructive feedback that will create awareness that can lead to correction or improvement in performance. There should be no surprises at the performance review meeting on what needs to be improved.
• Focus the review on the future to ensure that the employee understands how they need to improve. The review should be focused on the values and behaviours of the organization as well as on objectives. Incorporate goal setting and feedback that link an employee’s individual goals and objectives with those of the department and organization. Identify areas for improvement and development opportunities across the organization; including having Career Conversations to discuss where the employee would like to go, what skills and knowledge they need to gain and how you can support them to get there.
• Document everything. Maintain clear written notes and details of any conversations that have occurred so that you have a complete picture of the employee’s performance when it comes to preparing for the annual report.

After all this, how do you know if you have a successful process? You will see most or all of the following things in place:

• High morale / low turnover or disengagement
• Organizational goals are typically met
• People understand how they need to improve
• Reviews are done consistently, and on time
• Disciplined or terminated employees have consistently received written feedback specifying that their performance was not meeting expectations and what improvement was expected

Your Engaged Assignment: Do you have any of the above practices in place in your performance management system? Do you have frequent conversations with your employees about areas of improvement, as well as to recognize their successes? Even if you start with just that, it will start creating open dialogue with your employees, and empower them with individual accountability to meet the goals set out for them.