The value-added of performance management has been known for years. Yet, many organisations do not have a performance review process
The value-added of performance management has been known for years. Yet, many organisations do not have a performance review process or struggle to complete it properly. Why is this?
In this short article we cover the following topics:
- The numerous benefits of performance management
- Different approaches to performance management
- Typical challenges
- The role of technology
- How we can help
THE NUMEROUS BENEFITS OF PERFORMANCE MANAGEMENT
Conducting performance reviews efficiently can have positive all-around results.
It is well-understood that setting clear expectations for employees and aligning individual priorities with those of the team, department and wider organisation is a basic building block for high performance.
There are other well-recognised benefits of effective employee performance management. For example, it can contribute to employee engagement, a positive work environment, and stronger connections between leadership and employees. Ultimately, all of these things lead to higher organisational performance, such as profitability, customer satisfaction, productivity, etc. This has been well-documented in many studies.
DIFFERENT APPROACHES TO PERFORMANCE MANAGEMENT
As to be expected, organisations have different performance management practices, which is often linked to factors such as company culture, industry-specific norms, historical practices, legal requirements, the type of jobs, etc. For example, there can be significant differences in:
The frequency of performance reviews
- Performance rating scales (or even no rating scales)
- Incorporating (or not) 180 or 360-degree feedback
- Including (or not) employee self-reviews
- Providing ongoing feedback vs. performing more formal reviews at fixed times (e.g. mid-year and end-of-year)
- The focus on business / operational objectives and individual development objectives
- Assessing competencies
- Asking work environment-related questions
- Proposing compliance-related questions for organisations in more regulated sectors.
Employees, managers and HR professionals alike may recognise some of the following challenges associated with performance management, irrespective of the organisation’s profile (industry, country, maturity, size, etc):
- Lack of alignment between the organisation’s strategic objectives and those of employees
- A mismatch between the design of the performance management process and the desired culture of the organisation
- Complaints from employees and managers that they do not have the time to complete the processes, especially at year-end when they may be asked to review the current year and set objectives and individual development plans for the next year
- Too much time spent chasing employees and managers to complete each step of the process (e.g. set objectives, write the reviews, and have a 1-on-1 discussion), where HR teams end up becoming an “enforcer”
- Poor quality of written comments, e.g. non-existent, too vague or too long Lack of consistency on ratings (i.e. performance expectations) between managers
- Lack of consistency between ratings on individual objectives vs. the overall rating
- The risk that the process becomes a box-ticking exercise and 1-on-1 conversations either do not happen or are of poor quality
- Completing each step of the process weeks or months after the original deadline, meaning that it is now out of sync with the organisation’s business performance cycle and even with compensation decisions
- Enabling the review process in different languages for employees in different countries who may not be comfortable in the organisation’s primary language
- Remote working / Covid has made some of these challenges even greater (especially 1-on-1 discussions and ongoing feedback).
THE ROLE OF TECHNOLOGY
Technology, i.e. HR software and collaboration tools, can help solve many of these challenges. Here are some examples:
- Digitalizing the current or desired performance management process, while respecting each organisation’s cultural or historical approach
- Providing flexibility in attributes to include in the objectives review, the preferred rating scale, and the design of their very own evaluation forms
- Combining or separating the timing of objectives, individual development and evaluations
- Making it mandatory to complete the 1-on-1 part of the review process
- Giving managers the opportunity to schedule the 1-on-1 review with their team members at the same time that they launch the self-evaluation process
- Displaying the organisation’s strategic objectives in an objective setting User Interface
- Allowing the option to make it an obligation to write comments and put a cap on the length of comments (limited number of characters)
- Creating detailed reports for the HR department on completion stats and results
- Offering complete adaptability on the timing of performance reviews, including within the same organisation
- Providing organisations and their employees with a multi-language User Interface and forms
HOW WE CAN HELP
As both HR practitioners and technologists, the PeopleWeek team has significant performance management experience and deep insights into market practices. We have used this expertise to develop technology that addresses the practical realities of employees, managers and HR.
Our suite of tools is well-suited to medium-sized and large organisations alike and offers a lot of flexibility in the design of the performance management processes. This enables our clients to have tailored solutions without having to pay customised development costs or high license fees.
There are modern solutions for age-old challenges.