Performance Management - Key To Organisational Success

Let’s begin with a story of two friends today. Armed with a great idea, they started their journey into the startup universe with determination and drive. With passage of time, their once-modest squad of 20 trailblazers now stands at a whopping 150+. While their growth has been spectacular, there is a twist in the tale. Amidst the triumphant cheers and high-fives, they realised that despite the meteoric rise, there was a crucial piece missing – a reliable way to measure the team’s performance.

The team was expanding, and projects were flourishing, but there was a palpable disconnect in communication. Understanding the team’s performance felt like solving a puzzle with a few pieces missing. This is when one of the co-founders got in touch with us and we got into discussions about their Performance Management System. The co-founder shared that their managers struggled to give proper feedback to their team members. One of their top-performing employees gave feedback that they don’t feel appreciated at work.?

This is indeed an alarming situation, and one that calls for recognising and appreciating employees' efforts and hard work. It is vitally important to have a proper system to give feedback for improvement of performance for underperforming employees. To achieve this, organisations must implement robust performance management policies. Let us take a look at what they consist of.

What is a performance management policy?

A performance management policy is a set of guidelines that outlines the principles, processes, and procedures an organisation follows to manage and evaluate its employees’ performance. It enables managers to effectively monitor their team's progress and identify areas for improvement by setting clear and measurable objectives. It incorporates regular feedback sessions to provide employees with constructive performance insights and provide pointers for skill development.

Type of performance management policies:

Based on their purpose and structure, performance management policies can be classified as:

• Performance appraisal and review policy: This defines the organisation's guidelines and procedures for conducting performance appraisals and reviews for its employees.?
• Goal-setting process and timelines: This focuses on how goals are set, monitored, and aligned with organisational objectives.
• Performance improvement plan policy: This defines the process for implementing performance improvement plans (PIPs) when an employee's performance is found to be below expectations.?
• Recognition and reward policy: This establishes guidelines for recognising and rewarding outstanding performance. It may cover various forms of recognition, like monetary rewards, certificates, or public acknowledgment.
• Training and development policy: This addresses the organisation's commitment to employee development with concrete processes to determine and provide training to employees.
• Promotion and succession planning policy: This establishes a transparent and structured process for evaluating employee potential, ensuring fairness in promotions, and developing a pipeline of talent to fill critical positions in the organisation.

A set of well-defined performance management policies ensures that performance evaluations are fair, consistent, and aligned with the organisation's overarching goals.

As for the startup that we just mentioned, we were able to make a transformation happen with a proper performance management system. Increased transparency and collaboration made the office feel different. With the newfound clarity, managers focused on strengths and growth areas. It was no longer about just evaluating; it was about elevating the team's performance.

Do you want to make this transformation happen in your company too? Contact us today to benefit from Able Ventures’ expertise and rich experience of creating customised HR policies, along with 60+ other policies.