Setting up a performance management system
Thinking of setting up a new performance management system (PM) in your organization? You could be setting up a pathway for bringing your organization to the next level and aligning all of your talent. Effective performance management systems can serve many purposes: they can help a company make administrative decisions about employees, provide a formalized system talk to employees about how they are performing, set up plans to develop employees, provide a link to training and promotion systems, and document specific behaviors. Beyond all of this, a well-designed performance management system should align individual employee’s performance with the organization’s goals, becoming an integral part of the company’s strategy.
However, setting up a poor performance management system can do more harm than good- alienating employees rather than encouraging them to do better. Indeed, a poorly implemented performance appraisal can lower performance, undermine teams, and reduce employees’ commitment to the organization.
The key is to set up a strong foundation for the new performance management system. There are a number of stages for developing and implementing an effective performance management system:
Step 1- Do your homework. The company’s mission and strategic goals should be reviewed. It is also important to gain some knowledge about the jobs being assessed and department information if relevant.
Step 2- Communicate the PM system. Performance standards should be clearly communicated to employees at the beginning of the PM implementation and any new performance review time period. Supervisors should offer development plans to reach expected performance targets.
Step 3- Look at what is actually being done. Specific behaviors observed should be documented for future use. Supervisors should provide frequent feedback to employees about performance and recommend resources or steps to improve.
Step 4- Link performance to set standards. Employees should be evaluated based on the previously established set of criteria.
Step 5- Review performance with employees. The supervisor should meet with employees to formally review process and provide feedback. The review process should be explained to employees at the beginning of the session. Comments should be behaviorally based. The supervisor and employee should set goals to improve performance for the next review cycle.
Stage 6- Make changes in performance. The employees take what they learn from the review to reflect on their performance and modify behaviors.
Setting up a carefully developed performance management system is the first step in creating an effective PM strategy for your organization. Next in the series, we will discuss how to train managers to rate employees accurately and consistently.
If you have not read the first post in this series previous it is highly recommended.
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