How to adopt and implement effective performance management programmes

September 14, 2023

Performance management is a process used by companies to plan, monitor, develop and evaluate the performance of their employees, teams or organisation as a whole. It is essential for enhancing employee performance and helping in the achievement of company objectives.

Despite the significance of performance management, many employees see it as a waste of time and potentially not relevant to their actual job responsibilities. There are many reasons why performance management can fail. Some of the reasons include:

  • The process is seen as an administrative and time-consuming process. Employees and managers often find the process to be paperwork-intensive. This can make them feel that the process is not worth their time and effort.
  • The formal performance review process is often done only once a year. Employees need to know what they are doing well and what they are not doing well more frequently than once a year.
  • Employees’ objectives are not clear or relevant to the work that they do. Employees need to understand what is expected of them in order to perform and be successful. If the goals are not clear or relevant, employees are less likely to be motivated to achieve them.
  • Feedback is not clear or constructive. Employees need to receive constructive feedback that is specific, actionable, and timely in order to improve their performance. If the feedback is not any of these things, they may feel demotivated and unclear about the way forward.
  • The process is sometimes seen to be biased and unfair. If employees feel that the process is unfair, they are less likely to trust or believe in its results.

When performance management fails, it can have a number of negative consequences for companies. If employees feel that the performance management process is a failure, they are less likely to be motivated and engaged in their work. This can lead to low morale and low productivity.

When managers do not have accurate information about employees’ performance, they are unlikely to make good decisions about who to promote, who to give salary adjustments to, and who to potentially let go.

If companies want to avoid the negative consequences of performance management failure, they need to make sure that the process is effective. Having worked with a number of firms in the past as well our own experience, here are some of the tips we at MM&K would recommend for creating an effective performance management programme:

  • Keep processes simple and streamlined. They should be easy to understand and follow. This will make it less likely that employees will see performance management as a waste of time.
  • Set clear and relevant objectives. Employees need to know what is expected of them in order to be successful. The goals should be specific, measurable, achievable, relevant, and time-bound.
  • Provide regular constructive feedback. Employees need to receive regular constructive feedback on their performance. This will help them to identify areas where they need to improve and make progress towards their goals.
  • Ensure the process is fair. Employees need to feel that performance management is fair and unbiased. This can be achieved by using objective criteria and involving more than one person in the process.

By following these tips, companies can create an effective performance management programme that will help them to improve employee performance and achieve business goals and objectives.

As an executive remuneration consultant, I have seen first-hand the negative consequences of performance management failure. I believe that it is essential for companies to have an effective performance management programme in place. By following the recommendations outlined in this article, companies can create performance management programmes that are effective, fair, and motivating for employees.

Should you have any questions about anything discussed in this article, please do not hesitate to contact Yolanda Roach.

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