7 TIPS TO OPTIMIZE PERFORMANCE MANAGEMENT SYSTEM

The American National Standards Institute (ANSI) has defined the essential components of a performance management system for goal setting, performance evaluation, and performance improvement plans. It is critical that we ensure our PMS (performance management system) contributes to the achievement of our organization's mission and objectives.

PMS increases employee engagement and commitment to work while also allowing employees to meet their performance objectives. Here are seven things we must do to optimize our performance management systems.

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1. Cleary Define the Prime Objectives of PMS

Traditionally, we used employee performance reviews to mainly determine salary increases. To get the most out of our PMS, the organization's management executives and managers should review and agree on the PMS's objectives.

Firstly, we use PMS as a driver to achieve desired organizational goals by aligning employee performance goals with the organization's business goals. The employee will be informed of the critical things that he must focus on in order to achieve and contribute to the organization's goals during the review period.

Secondly, the supervisor assists the employee in acquiring the knowledge and skills required to perform his job and meet the performance standards and goals set for the employee, department, and business as a whole. The manager and supervisor will play crucial roles in helping an employee reach his or her performance goals by maximizing their potential and offering the necessary supports, such as resources, feedback, coaching, and reinforcement.

Here in Thailand, a company executive even issued a directive stating that employees' performance should be improved to raise work productivity at least in line with salary increases; failing to do so will have an impact on the company's cost effectiveness and, ultimately, its ability to compete in the market in the future.

2. Create an Efficient PMS

Both the appraiser and the appraisee must find it easy and convenient to use the PMS. The system must have precise instructions and a method for carrying them out. If practical, we should involve managers and supervisors in reviewing the current system for evaluating employee performance and redesigning it to better serve business needs and be consistent with the rapidly changing organization's business strategy and goals. It is advised to hold a workshop to discuss the issues, limitations of the current system, and important areas for improvement. The aforementioned involvement of the stakeholders will help create a sense of belonging and commitment to the new or revised system in addition to meeting the needs of the users and organization.

It is a good idea to conduct pilot tests on the entire system before the new or revised system is put into use so that necessary adjustments and revisions can be made. We must make every effort to ensure the validity and dependability of all of our performance management tools. The evaluation metric needs to be precise enough to show what is working and what isn't.

3. Educate Appraisers on how to use PMS effectively.

The users' in-depth comprehension, dedication to the system, and successful implementation are crucial success factors in PMS implementation. As a result, we must educate appraisers on the system's objectives and effective execution. The most important factors in the successful implementation of PMS are the commitment and contributions of the appraisers, who are in charge of doing so. Employees should also be aware of the advantages provided by the system and make full use of it since one of the goals of the PMS is to assist employees in meeting their performance goals. Also important, the primary person in charge of an employee's performance is his direct supervisor, who is also in charge of providing performance feedback, coaching, and reinforcement.

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4. Align Company and Workforce Goals.

Employee performance goals must be developed and approved by the manager, the supervisor, and the employee. These goals should be in line with the department's and organization's business objectives. The employee needs to be fully aware of their critical expectations, as well as what they need to commit to and achieve throughout the year. The employee should also actively engage in the business plans and projects he is concerned with and participate in the process of setting his performance goals as well.

The performance goals set for employees must be based on SMART objectives—Specific, Measurable, Aligned, Realistic, and Time-bound—and must be evaluated against the expected outcomes of job performance rather than activities. In essence, the employee should develop a clear action plan to accomplish the objectives. Each performance goal's target should be specified as precisely as possible and broken down into monthly goals so that it can be regularly monitored and, if necessary, corrected. This will help to ensure that the goal is attained.

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5. Use Competencies to Assess and Develop Employee Performance

Define a set of skills and abilities that an employee needs to develop in order to achieve his or her performance objectives. Competency is one of the key components of PMS, which consists of the skills, knowledge and attributes, that will be used to assess and develop employee performance.

On the other hand, there are problems with accuracy, credibility, subjectivity, and differences in the discretion of appraisers when using the competency to evaluate employee performance. As a result, to support the assessment, the competency of an employee should be evaluated objectively based on relevant circumstances and defined behaviors. All parties involved must also receive a thorough explanation of the competencies to be used for performance assessment, including its definitions, behavior indicators, and proficiency levels. The appraiser will use these pieces of information as a guide or a dictionary to evaluate the employee's competency based on actual situations and behaviors that the employee has expressed, rather than making assumptions or using unsupported personal judgment.

6. Design Effective Plan for Employee Development

Employee development plan is an essential part of PMS. Development plans emphasize not only the short term and specific roles of the positions, but also the knowledge and skills required for longer-term career aspirations and development. The supervisor collaborates with the employee to identify both hard and soft skills required to meet his performance objectives, including developing and implementing the employee's development plan.

Importantly, the supervisor should provide adequate reinforcement and coaching to enable employees to meet the goals of his performance plan. This includes properly recognizing and praising good work. Employees who receive regular recognition and feedback will have a higher sense of self-worth and a greater desire to work for the company.

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7. Establish a Performance-driven Culture.

It is important to empower employees to make decisions, solve critical problems, and achieve performance goals on their own in order to create organizations with a high-performance culture. Managers are expected to provide guidance and support rather than micromanage their teams, and all employees' opinions are valued and recognized. Strong leadership, talented and engaged employees, autonomy, trust, and effective communication are key factors that contribute to high-performing employees.

It is also critical that management executives commit to the PMS by allocating adequate resources to the system and modeling appropriate behavior.

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Conclusion

When used seriously and consistently, PMS is a powerful employee performance management tool. For managing employee performance, the system consists of three key components: 1) performance planning: set employee goals and development plans; 2) competency application: assess and develop employee performance; and 3) manager support: provide feedback, coaching, and employee development. PMS ensures that employees across the organization are aligned with and contributing to the business's strategic objectives. Employee satisfaction, engagement, and commitment to work improves when PMS is effectively and consistently implemented. It is not an easy task, but it is worthwhile for the effort and time invested.

What is your ideal system for performance management? Please share your thoughts and suggestions, and if you need to discuss any issues in more details, please use the comments section below.