How to Improve Performance Management to Create Business Value

How to Improve Performance Management to Create Business Value

This article was updated on Sept. 6, 2018.

Few businesses leaders today dispute the value of performance management (PM), and there is an intense focus on creating processes that will effectively engage, motivate and improve how teams perform. And while the value, need and desire of PM are strong, many obstacles within businesses still exist.

One obstacle is awareness. PM is often misunderstood and confused with the employee performance appraisal or review. PM, however, involves so much more. Focusing only on an annual appraisal form leads to under-appreciation of the benefits of PM. As a result, we sometimes hear complaints from people in positions of influence who can drive real change, such as: "I don't have time," "I don't know what to talk about" or "This is not making any difference." These perceptions can be changed.

Forward-thinking companies are taking steps to correct this negative view of PM, including implementing innovative and ongoing PM solutions that help ensure results of the business and the teams are met. Let's look at eight steps toward developing a continuous system that will drive true results:

  1. Communicate and understand purpose and value of process. Ensure that everyone understands that the reason for the PM system is to improve productivity and measure individual performance. Ensuring that everyone in the company understands why this process is in place is the best first step. Being accountable for doing what you say you will do is an essential best practice.
  2. Set goals effectively. Get SMART when you are developing goals, or helping others set goals, and make sure the goals will directly contribute to the business's ultimate success. When I mention SMART, I am describing the ideal qualities of a goal – Specific, Measurable, Attainable, Realistic and Timely. I encourage you to develop goal setting training from both the perspective of the employee and the supervisor.
  3. Begin with performance planning. Start with a job description and a performance plan that includes goals. Some people feel that the value is in the goals and the written documents, but the REAL value is in the conversations you will have. Conversations don't have to be long, but they do need to be intentional and well thought out.
  4. Ensure an ongoing process. The key to a great process is finding one that will be followed by everyone and will bring about significant results for the company. Some of the steps in your process might include goal setting, performance planning, feedback, coaching and training.
  5. Gather information from a number of sources. Performance is not in the eye of one beholder. Gather information from coworkers, mentors, supervisors, engagement leaders and task force champions. Performance should not be a linear view, but a global one.
  6. Document, document, document. Looking back on accomplishments and accountability is important to engaging the workforce. Individuals feel appreciation when you can show them where they are succeeding as well as areas that need improvement. Documentation is the key to tracking what has happened in the past and what you expect in the future.
  7. Adequately prepare and train managers. Training is essential to ensure the appropriate outcomes. Managers who feel adequately prepared to provide and receive feedback, deliver a performance evaluation and conduct a performance evaluation meeting, will be more successful in this process.
  8. Evaluate the process and make it easy, efficient and effective. The process should be easy to follow and valuable to the participant. Value does not come in the length of the forms or the hours spent in conversation, it comes from the ability of the individuals to grow in their career and bring value to the company.

Strategic performance management can transform your company and your business. Smart planning, thoughtful execution and effective communication are the keys to success.