Creating an effective performance management process

Continuous performance management

Traditional performance management processes like annual or bi-annual appraisals are no longer cutting it.

Agree SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals so that employees know exactly what they need to do and how.
Schedule routine, less formal 1:1 meetings to maintain an open line of communication with employees to create more opportunities to provide feedback. This helps with visibility on their progress and makes it easier to identify any issues which may be affecting their performance, before they develop into something more serious.
Encourage social recognition among employees so that they can be encouraged and motivated by positive feedback from peers.
Work with employees to come up with a professional development plan that explores learning & development opportunities.

Planning a performance review

Allow time to prepare

This applies to both the manager and the employee. Give them the time to think about achievements, areas for improvement and development to make for a productive meeting.

Not a disciplinary meeting

The prospect of appraisals or performance reviews can fill employees with dread. Make sure line managers clearly communicate that it is a constructive two-way discussion.

Measurement

Combine a system of tick boxes and written sections to grade the employee’s performance so you can compare from year to year.

KPIs

Come up with a clear long-term plan with measurable targets and objectives so that employees know exactly what they need to work towards in order to improve.

Continuous Performance

The performance review process and the key value of openness between employee and employer is redundant if the outcomes from the meeting aren't routinely monitored and reviewed. Keep an open dialogue with employees so you can identify any issues as early as possible and provide support when needed.

Key performance management techniques

Performance Appraisals

Employees must feel the appraisal is a regular, fair, honest and constructive two-way conversation between them and their manager. If they are not, then appraisals can become a tick-box exercise and end up a de-motivator which can lead to a decline in employee performance.

KPIs

Measure how well projects, teams or individuals are performing in relation to their strategic goals and objectives. The main value is enabling data-driven performance conversations and better decision-making. Well-designed KPIs should be vital tools providing a clear picture of current levels of performance and show if individuals or the collective are where they need to be.

Competency Matrixes

Similar to Balanced Scorecards, these take a holistic view of the organisation to attach a score rating to the competency of the different skills which are required for success in each role. Employees can be scored based on their performance against metrics to identify areas for improvement.

Key performance management techniques

Management by Objectives

Define specific objectives and set out how to achieve each individual objective. It is powerful for specific work that must be done one step at a time.

It creates a culture of working towards common goals as once each objective is achieved, those involved are aware of their achievements - which helps to improve morale and motivation. MBO measures individual performance and compares that performance to standards previously set.

Personal Development Plans

Set out goals for future performance and actions that will support personal development, identifying specific training and development needs and creating action plans to meet those needs.

Employees can set out how they want to grow and what actions they need to take to achieve that growth. This helps them to feel more invested in the business and know the role they play in the success of the business.

360 Feedback

Allow peers to provide both positive and constructive feedback. It provides individuals with a broad assessment of their individual performance based on the views of the people around them.

Team members grow as they identify areas for improvement in others, while they consider their own development needs.