Developing a Winning Performance Management Process

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Business woman presenting figures on a chart while two female and a single male colleague watch and take notes at a conference table.

“Employees who believe that management is concerned about them as a whole person — not just an employee — are more productive, more satisfied, more fulfilled. Satisfied employees mean satisfied customers, which leads to profitability.” -Anne M. Mulcahy, Former CEO of Xerox Corporation

Companies work best when their employees perform at high levels, find motivation and are given chances to excel. All these factors arise from a successful performance management process. According to the HR Council, performance management is the “process by which managers and employees work together to plan, monitor and review an employee’s work objectives and overall contribution to [an] organization.” Understanding this process allows employees and supervisors alike to more effectively (and happily) function in their workplace.

The Performance Management Process

Performance management is complex, requiring numerous steps and considerations. But generally, it is organized into the following phases.

1.) Planning

During this first phase, employees and managers decide together on goals for an employee’s future performance. This is usually done face to face in a private setting. During this meeting, they might:

  • Review and revise an employee’s job description to ensure it accurately reflects the employee’s actual responsibilities.
  • Identify the employee’s desired or expected goals and tasks, as well as the standards required to meet them.
  • Define long-term career objectives and work out how they might be addressed via short-term responsibilities.
  • Identify other factors that may help an employee’s performance, such as the connections between the employee’s responsibilities and overarching company goals.

2.) Monitoring

Once objectives are defined, managers and employees are then able to observe the actual work performed. Although “monitoring” might suggest “micromanaging,” this should hardly be the case in effective performance management. Instead, managers and employees should have regular conversations about work performance. They may discuss items like:

  • If employees are making progress on their goals.
  • Identifying barriers in work.
  • Determining if an employee requires extra support.
  • Identifying responsibility changes that may be necessary due to shifting company goals.

Monitoring is not characterized by a top-down approach. Employees should feel free to discuss their own vision of their challenges, barriers and accomplishments.

3.) Developing

Through monitoring, employees and managers are better able to identify areas for growth. The developing phase enables this growth to occur. This stage might include:

  • Finding and implementing opportunities for formal or informal training.
  • Coaching or mentoring.
  • Delegating new responsibilities.
  • Providing regular feedback.

4.) Rating

Rating is the official documentation of an employee’s progress. In performance management, this practice must adhere to a number of principles to be considered effective.

  • The characteristics of each performance level (Unsatisfactory, Satisfactory, Above and Beyond, etc.) on the rating scale should be clearly defined.
  • Rating scales should be tailored to particular job titles, if possible.
  • Employees should have the chance to self-rate and veto their supervisor’s final ratings if they feel as though they are inaccurate.
  • Supervisors should be educated about possible biases they might hold, so that they can provide more objective feedback.

Occasionally, companies choose to rate employee performance based on the opinions of multiple sources including peers, customers and higher-level managers. These are called 360-degree evaluations and may or may not be the right choice for every organization.

5.) Reward

When employees meet or exceed their goals, rewarding them is common, particularly in the form of a promotion, bonus or raise. Best practices include:

  • Making clear distinctions between performance levels and rewards received.
  • Ensuring that employees’ performance and reviews support decisions regarding their compensation.
  • Keeping general consistency in all practices.

At their best, performance evaluation processes should lead to a company characterized by a high-performance culture.

Approaching Employee Performance Management

Performance management is more than a process; it is also defined by its adherence to certain best practices. Some include:

  • All organizations should tailor their performance management processes to their unique needs.
  • Clarity and transparency are crucial.
  • Feedback should be specific and timely.
  • Aligning employee goals with the company’s goals is ideal.

Most importantly, companies should understand that performance management is a process that requires long-term commitment. Although it may take time and work, the outcomes are ultimately worth the effort.

Sources: U.S. Office of Personnel Management, SHRM Foundation

Starting a Career in Human Resources

The value of getting the most out of employees can’t be overstated. For those interested in making a career out of helping others in the workplace, the online BBA with a Human Resource Management Concentration from Concordia University Texas can help guide them to a rewarding career. Concordia offers rolling enrollment, allowing students to begin classes at a time that’s right for them.