Performance management

Performance management is critical for an organization’s success. Employees need to understand what’s expected of them, and to achieve those goals they must be managed so that they’re motivated, have the necessary skills, resources and support, and are responsible. Performance management is the attempt to take full advantage of this value creation and ensure that employees contribute to business objectives. It should align with organizational strategy. It is majorly done to improve performance, establish goals & Objectives & hold people to account for their performance by linking it to reward, career progression and termination of contracts. Having a performance conversation only once or twice a year is not that effective. Continuous feedback, mentoring, clear communication about objectives, necessary training is equally essential nowadays. This is not to pin point the mistakes but to uplift the necessary skillsets. There has to be readiness, not only from leadership but also from everyone in the organization. People have to know how to give and get feedback. Once that’s established, a tool and a structure help. If you have the right structure but not the mindset, that’s a failure. Performance management is also about establishing a culture in which individuals and groups take responsibility for the continuous improvement of business processes and their own skills, behaviors and contributions.

Performance management is a continuous process not a one-time event. It integrates with various HR activities. Each organization has a different approach, tools, methods and process for performance management (like 360 degree, KRA & KPI based, goal setting, balance scorecard etc.) but it is relevant to the specific needs of the business. Individuals and managers can then create plans and monitor performance continuously. Feedback should be regular, and could be supported by formal performance reviews at agreed points over the year. The plans can also highlight organization-wide processes that are required to support performance; for example, leadership, internal communications, and others. We’re all innately biased, even though we’d like to believe that we’re not. There is something called the recency bias. It’s easier for people to remember what happened recently over what happened in the past. One benefit of continuous feedback is that alignment piece.

Objective & goal- setting always helps: it’s often said that objectives should be SMART –Specific, Measurable, Achievable Relevant, and Time-bound. In straightforward tasks, goals that are specific and enlarging do increase performance, but in 'complex' jobs (such as those which involve making analysis-based decisions, they do not. Here, outcome objectives focused on ‘doing one’s best’ work better, and best of all are objectives focused on learning or behavior. In one job, good performance may purely be a factor of individual application; in another job it may rely much more on teamwork. If striking a balance between individual and team objectives, employers should be careful that they do not undermine each other.

Performance reviews should help employees to learn from their experiences and identify other applicable learning and development opportunities. Many organizations use personal development plans (PDPs), Individual development plans(IDPs) to set out engagements. Sometimes, a review of employees’ potential and development needs is grouped with the performance appraisal and called a performance development review (PDR).

Recently, there have been lots of changes in performance management policies. Earlier it was just done to assess the performance and relate it to pay and it was one –time event. But now with growing trends, it is a regular and frequent activity for the development of talent. When we just focus on giving feedback for the sake of supporting employees and improving their performance, we take out the stress and anxiety associated with performance reviews. Of course, when doing a performance-compensation evaluation, there’s going to be some performance component.

Building a culture of feedback, mentoring and accountability will develop talent in an enormous way. The biggest value of the organization is its people and developing them and creating that culture helps in achieving the objectives and makes an organization wins in the market place.