Here’s How to Effectively Manage Employee Performance

Your business’ growth and success weigh heavily on your employees’ performance. Traditionally, employee performance would be mainly measured by annual performance reviews. However, in recent years employers have been abandoning traditional appraisals for a more rounded performance management system.

What is performance management?

Performance management involves an ongoing process of checking job responsibilities, expectations, and deliverables. The continuous nature of performance management makes it easier for managers and employers to keep track of progress, regardless of the project or task.

These check-ins are typically done throughout the year and involve:

• An introductory meeting – This initial meeting covers goal setting and alignment of expectations for the overall period. A development plan is sometimes introduced to support the outlined goals.
• Quarterly check-ins – These check-ins are either done for the calendar year or the fiscal year, depending on the specific operations of the business. During these meetings, employees and managers will share their feedback on the quarter. The manager or employer will assess the employee’s progress to ensure they are on track to meeting their goals.
• Annual review – At the end of each year (or fiscal year), a wrap meeting would be necessary to conclude the period. Here, the employer and employee will review the final quarter and the period as a whole to ensure the agreed goals for the period were achieved.

Are performance reviews and performance management the same?

A performance review is a formal evaluation of an employee’s output over a fixed period (usually a year). While performance management is an overall system dedicated to employee and company improvement and advancement.  

Top four elements of good performance management

In order to ensure you are effectively managing your employees, here are a few elements you should include in your performance management system:

1.       Reinforce company/employee alignment – Effective performance management starts with aligning the employee’s tasks with the company’s mission and goals. When an employee understands how their contribution affects the business’ greater mission, it results in better performance.

2.       Create measurable goals – The SMART method is the most effective way to create measurable goals for employee performance. This method involves creating goals that are Specific, Measurable, Achievable, Relevant, and Time-bound.

3.       Outline job-development plans – Good performance management also includes showing employees their projected growth in the company if goals are met. This not only helps to motivate employees, but ensures accountability for the key performance indicators (KPIs) that have been set.

4.       Set regular meetings – Be sure to engage your employees regularly to keep everyone on track. Regular meetings also allow time and space to clarify misunderstandings and adjust any shift in priorities.

Benefits of a performance management system

One of the main reasons many employers are making the switch to a performance management system, is due to the many benefits it has. Performance management has been shown to:

• Increase employer satisfaction and goal acquisition
• Increase employee retention, which improves the bottom line
• Reduce confusion regarding the relationship between job functions and performance outcomes

Additionally, often time with traditional annual appraisals, employees with a negative review feel blindsided. Performance management allows employees to have timely feedback throughout the year, and address issues as they arise.

Need help implementing a performance management system?

Our experts can help you develop policies to improve employee performance, and you can track said performance with our smart Peninsula HR software. Our advisors can also help you develop other company policies, and provide advice on any HR issues you may have. We also provide expert health and safety advice to keep you compliant and help protect your business from fines. Contact us today at 1 (833) 247-3652 to learn more.