AN OVERVIEW OF PERFORMANCE MANAGEMENT

Performance management isn’t an easy field to navigate.

It’s constantly evolving, hence the need for an effective performance management system.

New performance management trends emerge every year and all too often, human resource
departments get it wrong.

Employees are left feeling deflated, unmotivated, and unengaged and managers are frustrated at
the poor levels of team and individual employee performance. Thankfully, more and more com-
panies are waking up to the importance (and resulting benefits) of effective performance man-
agement systems.

The first step towards revitalizing and improving your existing performance processes is to
understand what an effective performance management system is. To do this, we will address the
following questions:

What Is Performance Management? (Performance Man-

agement Defined)
Performance management is a corporate management tool that helps managers monitor and
evaluate employees' work. Performance management's goal is to create an environment where
people can perform to the best of their abilities and produce the highest-quality work most
efficiently and effectively.

or

“Performance management is the continuous process of

 improving performance
 by setting individual and team goals which are aligned to the strategic goals of the
organization,
 planning performance to achieve the goals,
 reviewing and assessing progress, and developing the knowledge,
 Skills and abilities of people.”

A key point here is that performance management is a continuous process — not a once-a-year
activity. Quality performance management should, therefore, bring together a number of differ-
ent, integrated activities to form an ongoing”performance management cycle”, as shown below.
 or

It is an ongoing dialogue between you (HR managers) and your employees that links:

o Setting Expectations

o Gathering Data

o Ongoing Feedback

o Development Planning

o Performance Appraisals & Follow up

o Other Performance Management Services

1.Setting Expectations

As a best practice, you should define expectations for every position you supervise. You should
communicate these expectations and performance-measurement standards to new employees,
and review them at least once a year with all employees.

 Expectations for each position may include the following:

o Purpose of the position

o Key responsibilities, including tasks and technical expectations, as well as

interpersonal and conduct expectations

o Conduct expectations

o Performance standards and measures, such as quality, quantity, timeliness,

initiative, and teamwork for each key responsibility

o Any other relevant information from an employee's position description

2 - Gathering Data

You should gather data regarding employee performance in a systematic manner throughout the
year. This information will help you gain an understanding of your employees' performance and
will be available to you when drafting annual performance evaluations.

 You may use the following tool to help you capture specifics on feedback you have
provided to your employees or notable work situations that reflect either positively or
negatively on their performance:
 o Performance Discussion Worksheet (Word)

o Performance Meeting Outline (Word)

3 - Ongoing Feedback

 The process of giving ongoing feedback reinforces effective performance and corrects
less-than-desirable performance.

 When giving feedback, you should provide employees with information that highlights
the relationship between what is expected of them and what they have accomplished.

 Feedback can be informal or formal, and it can be given as praise in the form of reward
and recognition, or it can be corrective in the form of disciplinary or corrective action.

4 - Development Planning

Development planning is the process of creating experiences for your employees that
promote skills and knowledge related to their positions, as well as to their professional
growth.

You should draw upon employees' performance evaluations when creating a development
plan, considering performance goals or deficiencies to be addressed, employee feedback
about how to systematically achieve goals or deficiencies, and available opportunities for
professional growth.

5 - Performance Appraisals

Performance appraisals provide employees and supervisors with a comparison of on-the-

job performance and established performance-measurement standards.

While day-to-day appraisals are usually informal, probationary and annual performance
evaluations are more structured and based on specific university guidelines.

The performance management process both ends and begins a new with the annual
performance appraisal, and—as a best practice—annual appraisals should end with
performance planning between you and your employee in which you discuss
expectations, performance standards, and objectives or goals for the next year.

You should evaluate new employees throughout the probationary period and evaluate all
employees at least annually prior to reappointment for the succeeding year.
6 - Other Performance Management Activities

Consultation on performance management, informal conflict resolution, corrective

action (including reviewing documents), process guidance, or interpretation and
implementation of laws, policies and procedures

Coaching to help you address specific workplace concerns, such as conducting

difficult performance evaluations, discussing corrective action with an employee,
or managing difficult workplace situations, problems and conflicts

Training and skill-building workshops in performance management topics

Discussions Groups in which SWS representatives meet with supervisors and

managers from various departments to discuss topics of interest or problem-solve
questions and concerns

Feedback on documents relating to performance management, informal conflict

resolution and process guidance, as well as help interpreting and implementing
laws, policies and procedures

Informal conflict resolution services to help you collaboratively approach conflict

resolution with your employees
What Are the Stages of the Performance Manage-
ment Cycle?

Historically, organizations tended to carry out this planning stage once a year. However, with the
business environment becoming increasingly agile and fast-moving, many organizations are
adapting their processes to set“near-term” objectives every three months.

The organization’s goals and values should feed into performance planning to ensure that indi-
vidual performance aligns with the overall strategy of the organization. Specifically,
each SMART objective should contribute to achieving one or more of the organization’s goals.

Personal development planning, meanwhile, should consider what behaviors, skills or knowledge
the individual needs to develop to successfully achieve their objectives and uphold the
organization’s values.

Traditionally, organizations have placed a lot of their emphasis on the“Review” part of the cycle
— often because a performance assessment is required for reward purposes. However, we have
always advised that it is the“Act” and“Track” stages that are the most important. These stages
are where performance is actually delivered and results achieved. Individuals need to be encour-
aged to schedule in regular time to work on achieving their objectives and personal development
plans. Similarly, managers need to be checking in with their staff regularly. They must give fre-
quent, effective feedback and use coaching skills to help their team members overcome chal-
lenges and identify opportunities for learning and performance improvement. If this is left until
an end-of-year review, it is too late — objectives and development plans may end up only par-
tially achieved.

Notice that in the above performance management cycle, there are no arrows between the four
stages. This is because, in reality, the stages do not flow one after the other. Act and Track
should be continuous throughout the year. Reviews may take place at any point and planning
may take place several times during the year and be re-visited as the needs of the business
change.

So What Is Effective Employee Performance

Management?
Having all of the elements of the performance management cycle in place is very important, but
this will not necessarily lead to effective performance management for your organization. There
are many other factors in play, such as:

 Having buy-in from leadership and senior management to performance management

 Ensuring the performance management cycle is continuous and not an annual process
 Ensuring performance conversations and reviews are meaningful and not”tick-box”
exercises
 Having easy to use performance management software which supports effective perfor-
mance management and gives you visibility of performance management activity.
 The skills and willingness of your managers to deliver effective performance manage-
ment on a day-to-day basis

What Makes Performance Management Systems Ineffec-

tive and Uninspiring?
Tragically, only around 14% of organisations report being happy with their current performance
management systems. If you’re not vigilant, performance management processes can often
become inefficient and counterproductive. Below are a few ways this can happen:

Your system isn’t fair or accurate — This often occurs when annual reviews are favoured over
more continuous performance management. After all, how can an employee be fairly and accu-
rately assessed and treated when their entire year’s performance is summarised in one sitting?
Can managers remember all pertinent events from as far as a year ago — and how will the
employee receive the appropriate levels of feedback, motivation, support and recognition? In
fact — how can the annual review be fair if there is no existing and trusting relationship between
employee and manager?

Managers are treating employee performance management as a “box-ticking” exercise — This

happens when managers go through the motions, perform reviews and give feedback, but they
are simply paying lip service to the process. These managers might take a useful tool, such
as personal development objectives, and do the bare minimum with employees, without revisit-
ing and revising them. This is a huge warning sign of an inefficient performance management
system. If your managers are checked-out, your employees will soon follow suit.

You rely too much on paper — Businesses these days can grow so quickly that paper-and-pen
systems become redundant. These days, technology is more affordable, simpler and more acces-
sible than ever before. To be truly effective, companies need to invest more in easy-to-use,
streamlined technology.

Your system is focused more on appraisal than on coaching — One way to get employees to
dread performance discussions is to make them feel they are going to be judged by their manager
every time they have a conversation. Rather than tearing employees down, managers should be
a coach. They should be supportive and encouraging, rather than dictatorial and impatient.

What Can Clear Review Employee Performance Manage-

ment Software Do for My Company?
Clear Review is a simple, powerful cloud-based employee performance management soft-
ware that enables meaningful, regular conversations. Our platform helps achieve the ultimate
goal of high-performance company culture by creating a light touch framework of developmental
discussions, which are supported by agile goals and real-time feedback.

Clear Review facilitates developmental check-ins, helps managers and employees collaborate to
set (and track) agile goals and provides the capacity for real-time feedback. Furthermore, our
software has a “talent snapshot” feature, which enables managers to provide performance
insights in minutes, without the arduous, administrative burden.

Objectives of Performance
Management
According to Lockett (1992), performance management aims at developing individuals with the
required commitment and competencies for working towards the shared meaningful objectives
within an organizational framework.

Performance management frameworks are designed with the objective of improving both
individual and organizational performance by identifying performance requirements, providing
regular feedback and assisting the employees in their career development.

Performance management aims at building a high performance culture for both the
individuals and the teams so that they jointly take the responsibility of improving the
business processes on a continuous basis and at the same time raise the competence bar by
upgrading their own skills within a leadership framework. Its focus is on enabling goal
clarity for making people do the right things in the right time. It may be said that the main
objective of a performance management system is to achieve the capacity of the employees to
the full potential in favor of both the employee and the organization, by defining the expectations
in terms of roles, responsibilities and accountabilities, required competencies and the expected
behaviors.

The main goal of performance management is to ensure that the organization as a system and its
subsystems work together in an integrated fashion for accomplishing optimum results or
outcomes.

The major objectives of performance management are discussed below:

 To enable the employees towards achievement of superior standards of work

performance.
 To help the employees in identifying the knowledge and skills required for performing
the job efficiently as this would drive their focus towards performing the right task in the
right way.
 Boosting the performance of the employees by encouraging employee empowerment,
motivation and implementation of an effective reward mechanism.
 Promoting a two way system of communication between the supervisors and the
employees for clarifying expectations about the roles and accountabilities,
communicating the functional and organizational goals, providing a regular and a
transparent feedback for improving employee performance and continuous coaching.
 Identifying the barriers to effective performance and resolving those barriers through
constant monitoring, coaching and development interventions.
 Creating a basis for several administrative decisions strategic planning, succession
planning, promotions and performance based payment.
 Promoting personal growth and advancement in the career of the employees by helping
them in acquiring the desired knowledge and skills.

Some of the key concerns of a performance management system in an organization are:

 Concerned with the output (the results achieved), outcomes, processes required for
reaching the results and also the inputs (knowledge, skills and attitudes).
 Concerned with measurement of results and review of progress in the achievement of set
targets.
 Concerned with defining business plans in advance for shaping a successful future.

 Striving for continuous improvement and continuous development by creating a learning
culture and an open system.
 Concerned with establishing a culture of trust and mutual understanding that fosters free
flow of communication at all levels in matters such as clarification of expectations and
sharing of information on the core values of an organization which binds the team
together.
 Concerned with the provision of procedural fairness and transparency in the process of
decision making.
The performance management approach has become an indispensable tool in the hands of the
corporates as it ensures that the people uphold the corporate values and tread in the path of
accomplishment of the ultimate corporate vision and mission. It is a forward looking process as it
involves both the supervisor and also the employee in a process of joint planning and goal setting
in the beginning of the year.

Components of Performance
Management

Effective employee performance management encompasses the five key components presented above.
The following information includes a graphic representation of the five components and descriptions of
each, including the regulatory requirements, if applicable. Web sites are also highlighted for more in-
depth research.

1. Planning

In an effective organization, work is planned out in advance. Planning means setting performance
expectations and goals for groups and individuals to channel their efforts toward achieving
organizational objectives. Getting employees involved in the planning process helps them understand
the goals of the organization, what needs to be done, why it needs to be done, and the level of effort or
responsibility required.

The regulatory requirements for planning employees’ performance include establishing the elements
and standards of their performance appraisal plans. Performance elements and standards should be
measurable, understandable, verifiable, equitable, and achievable. Through critical elements, employees
are held accountable as individuals for work assignments or responsibilities. Employee performance
plans should be flexible so they can be adjusted for changing program objectives and work
requirements. When used effectively, these plans can be beneficial working documents that are
discussed often, and not merely paperwork filed in a drawer and seen only when ratings of record are
required.

2. Monitoring

In an effective organization, assignments and projects are monitored continually. Monitoring well means
consistently measuring performance and providing ongoing feedback to employees and work groups on
their progress toward reaching their goals.

Regulatory requirements for monitoring performance include conducting progress reviews with
employees in which their performance is compared against their elements and standards. Ongoing
monitoring provides the opportunity to check how well employees are meeting predetermined
standards and to make changes to unrealistic or problematic standards. Unacceptable performance can
be identified at any time during the appraisal period and assistance provided to address such
performance rather than waiting until the end of the period when summary rating levels are assigned.

3. Developing

In an effective organization, employee developmental needs are evaluated and addressed. Developing in
this instance means increasing the capacity to perform through training, giving assignments that
introduce new skills or higher levels of responsibility, improving work processes, or using other
developmental methods. Providing employees with training and developmental opportunities
encourages good performance, strengthens job-related skills and competencies, and helps employees
keep up with changes in the workplace, such as the introduction of new technology.

Carrying out the processes of performance management provides an excellent opportunity to identify
developmental needs. During planning and monitoring of work, deficiencies in performance become
evident and can be addressed. Areas for improving good performance also stand out, and action can be
taken to help successful employees improve even further.

4. Rating

From time to time, organizations find it useful to summarize employee performance. This can be helpful
for looking at and comparing performance over time or among various employees. Organizations need
to know who their best performers are.

Within the context of formal performance appraisal regulatory requirements, rating means evaluating
employee performance against the elements and standards in an employee’s performance plan and
assigning a summary rating of record. The rating of record is assigned according to procedures included
in the organization’s appraisal program. It is based on work performed during an entire appraisal period.
The rating of record has a bearing on various other personnel actions, such as granting within-grade pay
increases and determining additional retention service credit in a reduction in force.

Note: Although group performance may have an impact on an employee’s summary rating, a rating of
record is assigned only to an individual, not to a group.
5. Rewarding

In an effective organization, rewards are used well. Rewarding means recognizing employees,
individually and as members of groups, for their performance and acknowledging their contributions to
the agency’s mission. A basic principle of effective management is all behavior is controlled by its
consequences. Those consequences can and should be both formal and informal and both positive and
negative.

Good performance is recognized without waiting for nominations for formal awards to be solicited.
Recognition is an ongoing, natural part of day-to-day experience. A lot of the actions that reward good
performance—like saying “Thank you”—don’t require a specific regulatory authority. Nonetheless,
awards regulations provide a broad range of forms that more formal rewards can take, such as cash,
time off, and many nonmonetary items. The regulations also cover a variety of contributions that can be
rewarded, from suggestions to group accomplishments.