Research indicates that workers have three prime needs: Interesting work, recognition for doing a good job, and being let in on things that are going on in the company.

People’s need for recognition for work done cannot be overemphasized! With today’s 24/7 connectivity, it is no secret that employees spend a considerable amount of their time working. Recognition at work helps employees feel valued, motivating them to continue excelling at what they do.

Why Performance Management? 

The goal of every good performance management system is to work towards the improvement of the overall organizational performance.And for the record, performance management is not the same as the annual appraisal dreaded by managers and employees alike!

Many progressive companies are beginning to understand that the true strength of a performance management system cannot be achieved by a once-a-year appraisal. Hence, annual performance appraisals are slowly but surely on the decline.

Most companies are now embracing continuous performance management initiatives that involve regular, real-time feedback, with the aim of improving performance on an ongoing basis. Regular feedback is a great way for managers to establish trust in the relationships with their teams – they are opportunities for having honest conversations. Such feedback where managers come from a place of honest and sensitive conversations rather than a place of pronouncing judgement on the work done over the past year, can motivate employees to work harder and correct their mistakes. Employees who receive such regular feedback from their managers are likely to be more engaged in the company, thus reducing turnover and increasing company productivity.

Building a Great Performance Management system - Not a walk in the park

Managing people is hard, and measuring and managing their performance is harder! It is clear that employees need regular, timely, specific, and helpful feedback to reach their full potential. Companies and managers need to give this feedback to ensure top performance and engaged employees. When both companies and employees recognize the need for a strong performance management system, why do many organizations still get it wrong? 

Firstly, the basic premise underlying most performance management systems is that employees need to be pushed and goaded in order to perform their job well. This is far from the truth. The fact of the matter is that performance is largely based on intrinsic motivation rather than external “push” factors! 

Instead of motivating employees, performance management systems often end up decreasing employee morale because performance feedback is often based on metrics and feels impersonal. Employees feel like their problems are not really being addressed. There is also no guarantee that improved performance at the employee level will lead to bottom-line improvements in organizational results.

When the setting of goals is tied to rewards, employees are likely to avoid stretch goals and set goals that are too easy and do not motivate high performance. Managers and employees also need to remember to set goals that are measurable and objective. 

The Case for a Strong Performance management System

As the war for talent escalates, it is critical for companies to establish a great performance management system that keeps employees motivated. 

Gone are the days when employees used to conform to whatever their companies wanted. “Employee experience” is the new buzzword. It refers to everything an employee feels, observes and interacts with as a part of the company they work in. Companies are now trying to up their employee experience quotient to help attract and retain talent. A robust performance management system is key to help employees feel supported at their workplaces, inspiring work of top quality that helps companies reap rich dividends and contributes positively to workplace happiness. 

The Implementation

All this talk of the importance of performance management systems brings us to the next question. How do we build an effective performance management system? 

The first step is to start by making sure everyone understands the objective of the performance management system and the reason for its implementation. It is vital to get a buy-in from the team or employees to maximize the effectiveness of the performance management system. 

Set Expectations – Managers must help the team members to set their goals and objectives for the review period. Goals must be realistic, well-defined and stimulating. 

Observe: Now that the goals have been set, it is time for managers to step back and let their teams go ahead with their tasks and duties. Take care not to lay out how they must do their jobs – lest you end up stifling creativity. Regular feedback must be given instead of waiting till the end of the review period. This will help the team to constantly keep improving and correcting mistakes or shortcomings. Similarly, do make the effort to appreciate good work when you see it to keep the team motivated. Keep a tracker with examples of good performance and bad performance to discuss during the review.

Assess: As the end of the review period draws near, it is time to assess the work done. This is that time when both behaviors as well as results could be assessed.  This step could be done through the help of appraisal forms and templates that managers and peers alike fill up. Also, encourage employees to self-appraise and check how many of their goals and objectives they had managed to reach over the review period and areas for improvement. 

Review: This is the formal step of sitting down with the employee and discussing the performance over the review period. Gone are the days of performance reviews that entailed uncomfortable conversations between managers and team members. Managers must ensure that this step is a positive experience for the employee and the employee stays motivated and inspired to work harder. The conversation must be two-way and must promote trust. It must address various aspects of the career such as growth and development, recognitions and key messages from senior leadership.  Though work that was done over the past year must be discussed, the review is also an opportunity to look towards the future. Plan the best way the employee’s potential can be enhanced as well as aligned with the organizational goals. 

Performance management or “enablement” must come from a place of support, alignment and trust. The bottom line is to have a performance management system that empowers employees in a transparent and collaborative environment.