WHY PERFORMANCE MANAGEMENT IS VITAL FOR EVERY BUSINESS

Any business owner or HR Manager wants employees to be happy. A happy employee means a productive and satisfied employee that brings in good results and wants to stay at the company.

Essentially, results and retention are the two things that businesses will think about when thinking of their employees.

You may have tried to improve company culture, leadership, and transparency with your employees and it helped… somewhat. You’ve seen a slight rise in retention, and employees seem to be more fulfilled, but you know that without a strategy, this will be hard to sustain.

This is where performance management comes in.

WHAT IS PERFORMANCE MANAGEMENT?

Put simply, it’s turning all the attributes of a healthy work environment into a tangible system or process that is easier to track and more beneficial to employees.

The goal is to improve the effectiveness of accomplishing company goals.

Performance management can be broken down into 4 components:

GOALS AND EXPECTATIONS – your employees know what they’re working towards and what’s expected of them

PROGRESS MONITORING – you keep track of their progress through relevant metrics and/ or regular 1-1 catchups

CONTINUOUS FEEDBACK – you provide regular feedback on their performance with tangible ways they can improve

REWARD AND RECOGNITION – when employees succeed, they’re rewarded through salary increases/ other benefits, as well as being praised verbally to instil confidence and morale

CLEAR PROGRESSION PLANS – you’ve constructed a clear progression plan and have been transparent with your employees so they’re motivated to reach the next step

Keep reading for 7 reasons why this is crucial for every Human Resources team to implement…

CLARITY

Setting very specific goals, expectations and career paths for an employee, instils clarity. They specifically understand, not just what is expected of them in their role, but they expect how you, the employer, will reward them, recognise them, and progress them if they excel.

Clarity helps people look at the long-term benefit of staying committed. So when something difficult crops up, like learning a skill that doesn’t come easy to them, they have resilience because of the hope being instilled in their career and development.??

JOB SATISFACTION

This is an obvious one. If an employee is getting intentional support from managers and HR, as well as seeing that the entire team is being supported, it’ll improve the overall culture of the company, leading to increased happiness, and increased happiness leads to retention.

A SENSE OF BELONGING

People can stay at a job, and be pretty satisfied, but what performance management can produce, is employees genuinely feeling proud to be a part of your organisation.

When you create a culture that is serious about supporting its employees and helping them to develop, not just in their career, but in their overall skills, knowledge and experience, employees will know that’ll be hard to find elsewhere.?

IMPROVED MANAGER-EMPLOYEE RELATIONSHIP

Did you know a third of employees don’t have 1-1s with managers or even receive feedback more than twice a year to help them work towards their goals? (Betterworks )

There’s that famous saying “People don’t leave companies, they leave managers”, and it’s true. It’s obvious to an employee if they don’t feel invested in you and unfortunately, this will harm the relationship you have with them. 1-1s, performance reviews, and even regular training won’t just show an employee that you care, it’ll give you a chance to get to know them more. Whether it’s:

• Their career and salary goals
• What they’re currently enjoying
• What they’re finding difficult
• How they feel about the culture
• If there’s anything you can do to support them

These are all things you won’t know unless you have dedicated time with them.

Performance management also opens up doors for transparency. Do you feel like a particular employee is falling behind in a certain area? You don’t wait until their 1-year review, you should have regular, structured meetings and appraisals to make that known ahead of time so you can put a plan in place to help them improve.

By doing this, you’ll build mutual trust and solid communication that won’t just increase employee morale, but help you as an employer to be more in the know and be more equipped to support the success of your team.

PRODUCTIVITY

Investing time in your employees will lead to your employees investing in you and the business as a whole.?

Motivation leads to productivity, and that motivation comes when they always have goals to work towards. A?Betterworks ?study reported that 21% of employees say their goals are set annually and never looked at again.

Productivity will naturally boost when employees have goals to work towards and they’ve been told how their efforts will benefit the overall company – instilling once again that they are part of something bigger than themselves.

COLLABORATION

Performance management creates an inspiring and supportive atmosphere, not just for employees with their managers, but employees with each other.?

A good culture stems from good leadership and HR, so if your employees know that they’re being treated well, know that their team members are being treated well, and see that each person has value to bring, they’ll be far more likely to work together and make the most of each other’s strengths.?

RESULTS

It’s no secret that performance management is THE secret to success.?

A?Willis Tower Watson study ?found that companies using performance management programs are 1.5x as likely to outperform their competitors financially and 1.25x as likely to see an increase in employee productivity.

- Written by Oliver Howson