Performance Management Process & Key Steps

March 19, 2024
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Your business doesn’t work without your people. Being able to manage employees and teams is critical to your overall productivity and success. The way you do so will depend on your performance management process, including the tools you use to keep employees organised, motivated and able to collaborate efficiently. 

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With the aid of technology and automation software, performance management has evolved. Let’s take a look at what it means and how you can implement an optimised process within your organisation. 

Coming Up

1. What is Performance Management?

2. What is the Performance Management Process?

3. Working at Best Practice & Why it’s Important

4. What is Underperformance & Reasons for Underperformance

5. How to Manage Underperformance

6. Performance Management Checklist

7. How Automation Tools Can Help

8. The Wrap Up

What is Performance Management?

Performance management is a continual process between employees and managers that allow them to both give and receive feedback. The goal of performance management is to help ensure that employees have what they need to perform their job duties successfully. Additionally, performance management helps to highlight any problems so that they can be addressed and resolved promptly. When employees can perform their tasks according to a plan, the overall organisation thrives and can accomplish their own business goals. 

Performance management is not the same as talent management, however. On the one hand, talent management is the work done to retain employees and satisfy their personal needs so that they feel happy at their job. Performance management is a two-way street of control that allows employees to share their inefficiencies in their day-to-day and also receive feedback on how and where they can improve to help better the company’s position. It’s a collaborative process. 

Feedback turns out to be a necessary component of employee satisfaction and provides them with pertinent information to reap success. As such, performance management must be a continuous process within your organisation. 

What is the Performance Management Process?

Performance management is a cycle that consists of 4 necessary steps. They all work together, so when taking part in performance management, don’t skip a step! 

1. Planning: 

Employees must understand what’s expected from them to gauge how they are doing and be able to receive actionable feedback.  

  • Defining: It begins by defining their goals and communicating these goals with them. Not only should this be done in the job description, but once a new hire joins the team, it’s important to reiterate what will be expected from them. 
  • Write SMART targets: To do this efficiently, you can define goals using SMART - which means that they are: specific, measurable, attainable, relevant and time-based. 
  • Set Performance Standards: Given these SMART targets, you can set the standards by which their performance will be assessed. 
  • Feedback: As mentioned, performance management is a two-way street. Once you’ve communicated with employees what they will be held accountable to do and measured upon, get their feedback. It’s essential because they may have questions, modifications or be able to confirm that they feel ready to take on the tasks. 
  • Approval: Upon completion of the feedback stage, both managers and employees can approve this step so that the process has been kicked off collaboratively. This also gives employees a sense of ownership over their work. 

2. Coaching: 

Once the goals have been set, the coaching stage, which consists of continuous meetings commences. 

  • Organisation: Organise regular check-ins and meetings so that managers and employees can communicate how things are going. 
  • Training: When an employee is struggling, they want to know that they can ask for help. Setting up the relationship as one in which you train employees and allow them to air their challenges will make this step more transformative. 
  • Feedback: Both parties should feel comfortable to give and receive feedback. 
  • Objectives: By staying connected with the original purposes defined in step 1, then management can make sure that the work is being done and up to the standards set. Not only will this include checking that the job is being properly carried out, but it also involves the reward stage to acknowledge when an employee has been crushing goals! 

3. Review: 

Formal reviews typically take place annually within an organisation. Automation tools can be highly useful in storing historical data so that you can see how an employee has grown year-over-year. 

  • Review performance: Over a set period, management looks over an employee’s performance in what’s also known as a performance appraisal. Since performance management consists of regular check-ins throughout the year (be it weekly, monthly or quarterly), this annual check-in will also serve to plan future goals. 
  • Review process: Managers and employees should not only focus on employee’s performance. It’s also an excellent time to review the overall process and ask questions like, “Did the employee achieve goals?” / “Were there challenges that persisted?” / “How did management’s feedback help/hurt their performance?” and “Can this process be better?” 
  • Goal completion: Take a look at both small and large goals. If you pinpoint challenges in these areas, you can brainstorm solutions together. For example, many employees who have a lot of work to complete in a short amount of time may make avoidable human errors. If you notice employees entering data wrongly, for example, then the business can suffer losses. Instead, a solution could be to implement a data automation tool that automatically sources data and inputs it into a centralised location with no errors. 
  • Constructive feedback: Again, both parties should have the freedom to share their actionable input. 

4. Action: 

Within business, it takes action to make changes! 

  • Rewards: An essential way to motivate employees is to reward them and give recognition for a job well done. While it doesn’t have to be just monetary, it probably will include some form of compensation. It can also be in the form of time-off, granting leadership opportunities or giving said employee new and exciting projects. 
  • Looking ahead: The final step is to look forward and work together on how this process will take shape next year.  

Working at Best Practice & Why it’s Important

Businesses set in place their best practices and expect employees to work in best practice. This is important to monitor because it helps to avoid underperformance. However, some companies may face challenges when expecting everyone in their team to be on the same page, especially if the team works from different locations or if management is not on top of what’s happening. 

Automation tools can help to ensure that teams are working at best practice by standardising processes, providing the necessary resources to work as efficiently as possible, holding each party within an organisation responsible for their work (as it can be easily tracked through access controls) and providing metrics to see how and what is/isn’t working. 

What is Underperformance & Reasons for Underperformance

You want employees always to do the best they can. However, it’s likely that at some point or other, you’ll run into teams or individuals who are working less than optimally. Underperformance can come in the form of: 

  • Below average work performance (failure to perform their duties)
  • Unacceptable behaviour in the office 
  • Negative behaviour that affects co-workers 
  • Non-compliance with rules and regulations 

But, it’s not always only the employees’ fault, which is another reason why performance management is so critical. Some factors that can cause underperformance include: 

  • Employees are uninformed about what is expected from them 
  • Interpersonal differences between them and the team or management
  • Lack of consistent feedback leaves employees unaware of how they are doing
  • Bullying in the workplace
  • Cultural misunderstandings 
  • Lack of skills to be able to perform the job
  • Lack of resources to adequately meet expectations 

How to Manage Underperformance

There’s a clear way to avoid underperformance and help to keep your employees on track, which consists of these steps:

  • Identify the problem: locate where underperformance is happening.
  • Analyse the problem: determine how serious the issue is, how long the problem has existed and how far off the results are from what’s desired.
  • Discuss the problem: talk directly with the employee to find out what the problem looks like from their perspective and make sure they understand why it’s an issue for the organisation. 
  • Devise a solution: come up with a solution together and explore ideas by asking questions. 
  • Monitor performance: managers should continue to offer feedback once changes have been made to work towards the solution. There should be a defined way by which the employee’s performance will be measured (i.e. if they work in sales, then you can use an automation tool to provide reports on how much money they’ve brought in from new sales in any given time).

Performance Management Checklist

For continuous performance management, be sure that you have covered all of your bases so that employees and managers are aware of how their performance is to be measured and actively managed. Here’s a look at the key factors: 

  • Goal setting: Clearly outline goals and job descriptions. HR will likely manage this piece of the process, but you’ll want managers to be on the same page because they will be in charge of overseeing employees doing the job. It’s a best practice to make sure that the defined goals of the role align with the overall business goals. 
  • Communication: Both employees and managers should be able to communicate with one another openly. When either side runs into a problem, it should be immediately addressed, rather than swept under the rug. 
  • Collaboration: Employees don’t work siloed within organisations. They will be collaborating with colleagues across departments, customers and managers. One of the easiest ways to make this collaboration seamless is to provide employees with automation tools that can run processes automatically. Automation provides real-time insights across the organisation so staff can spend more of their time working together on high-value tasks, and less time carrying out time-consuming, low-value manual tasks. This helps to avoid bottlenecks and makes the workplace more collaborative and responsive.
  • Recognition: Even though this is such an essential step of the process, it can often go overlooked. Managers should give employees recognition when recognition is due to help keep them motivated and interested in doing good work
  • Feedback and reviews: Feedback and reviews have to be consistent to work. Businesses change rapidly, and the only way to keep up is to monitor outcomes actively and adjust them as needed. This will fall in line with managing business processes overall and setting a culture that supports continuous process improvement. 
  • Development opportunities: Most employees will want to be given ways to grow personally and professionally. Setting them up to development goals and the necessary resources (like training, conferences, coaches, etc.) will help to keep them engaged. It’s also a good practice to allow some room for mistakes so that employees feel empowered to take calculated risks and support change.

How Automation Tools Can Help

Data automation tools are necessary for organisations that wish to operate at maximised efficiency levels. Automation tools make the job easier for both employees and managers, as well as stakeholders and customers. They aid in:

  • Increasing transparency: Everyone with access to an automation tool has access to information about what’s happening in the business.   
  • Helping to manage processes and promote efficiency: Automation tools can run processes for you so that employees can focus on high-level tasks. This also helps to ensure that processes run the same way each time to avoid errors. It enables staff faster access to more in-depth analytics so they can make a more significant impact and feel more motivated by making a greater impact on the business.
  • Opening the door to collaboration: With cloud software and access control, employees can work from anywhere without losing the ability to share important information with colleagues. 
  • Measuring success and tracking outcomes: Automation tools can accurately measure performance through KPIs and see how processes and employees take control of their work. 
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The Wrap Up 

The ability to service your customers comes down to the tools you use and the people doing the work. Organisations that thrive have processes that are adequately designed, and teams whose performance is consistently measured. 

With a performance management process in place, you can rest assured that your team will function as best as they can. When things are not working efficiently, an automation tool will help you to realise issues early on and can offer the solution by which they can be easily changed for improvement. With this in mind, the way by which employees and managers work together will play the most prominent role in how your business flows day in and day out! 

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