Performance Management as the key to better performance

Attention to a next step in the Performance Management Cycle is critical to meeting the challenges in today’s job market. Or read about the possibilities of a team high performance at ENBOQ here

Contents of this article

What is a Performance Management Cycle

A Performance Management Cycle is a model that helps managers and employees achieve organizational goals. It is a structured process focused on employee development

The Performance Management Cycle includes four main phases:

• Planning
• Evaluating
• Judging
• Rewarding

The model traditionally assumes one year and ends with a reward. However, experience shows that regular evaluation improves employee performance. This is where a good onboarding or preboarding process can provide tremendous support

Why a performance management cycle

Today’s employees like to play an active role in their own development. They want to have their career and personal development path clear and to be able to co-determine their own goals. To do so, they need input that helps them become empowered and active participants in their own development. One of the great benefits of a well-integrated performance management cycle is that the employee knows the organization’s goals, knows how they can contribute, and has a solid roadmap by which to achieve their goals. Discover in this article what inspiring coaching can bring to the presentation management cycle

What are the different stages in the Performance Management Cycle?

The Performance Management Cycle consists of four different stages:

1. Plans

The planning phase is the foundation for success. Before the supervisor talks to the employee, the management team should set the organization’s goals for the coming year

This includes the overall strategy for the company, as well as personal objectives for all employees and teams, including development goals, priorities, specific tasks, actions and behaviors. Without this information, no session with employees is effective

After this, it is time for a session with the employee to create a strategic plan for the year together. This should be a collaborative process because an employee who understands why they are assigned specific goals and tasks will be more invested in achieving them

In this meeting, goals should be clearly defined using the SMART method

SMART targets are:

• Specific
  The goal is clearly defined, with detailed information such as what is to be achieved, how well it should be done, and why it is important.

• Measurable
  The goal should have a clear and measurable indicator to show whether it has been achieved.

• Abtainable
  Although the goal should challenge the employee, it should not be so high that it is not realistically achievable at all.

• Relevant
  The goal is in line with both the employee’s work and the overall goals of the organization.

• Time-bound
  There should be a clear timetable for the completion of this goal.

Each of the employee goals set should be consistent with and contribute to the organization’s goals. The additional creation of an employee development plan shows that management is actively working with employees to help them become more skilled and valuable players in the organization

More interesting information regarding the topic read ‘what is an employe journey‘ and ‘what is a roundtable‘

2. Evaluate

Regular evaluation is important to achieve the goals set in the planning phase
It is recommended that the supervisor regularly, preferably monthly, check on progress with the employee, offer help if needed and help resolve any problems and adjust goals if necessary
When setting annual goals, problems often arise from poor planning and lack of motivation. A large, distant goal can be intimidating, or seem so far away that the employee does not take the appropriate, doable steps
Splitting the goal into monthly sub-goals can make the process easier, giving the employee a more manageable task
Meeting monthly or quarterly with the employee makes it easier for the manager to oversee this process
Organizational goals can also shift throughout the year, and more frequent tuning can introduce new goals that are more in line with the organization’s goals

3. Assess

At the end of the year, the supervisor and the employee meet with the goal of  evaluating the previous year and checking whether the goals were met
This is another opportunity to strengthen cooperation. If a good evaluation is done, management already has a good idea of how the employee did during the year. The evaluation is an opportunity for management and the employee to evaluate both the end result and the process itself
This evaluation should include questions such as:

• Was the original goal realistic?
• Was the goal consistent with the goals of the organization?
• Did the employee gain useful experience or skills?
• How well did the employee complete his tasks?
• Did the organization provide the right support to achieve the goal?
• In what ways can future goals be set differently to ensure success?
• What aspects of this process could be better streamlined or improved

  The employee can give his views on how well he did during the year and receive feedback from management on how well he met or exceeded his goals. If there have been performance issues during the year, they can be brought up here. If problems are discussed, it is good to also present possible solutions. This is also a place where future development opportunities can be discussed, as well as bonuses or compensation.

4. Rewards

The final phase of the Performance Management Cycle is rewards. This is a phase that should not be overlooked because it is often the most important for employee motivation
Employees who do not receive appropriate rewards after one year lose motivation for the next year. They may lose confidence in their organization, feel that their talents are not valued and look for another job
When management rewards employees fairly and gives them recognition for their efforts, they ensure that those employees continue to work hard to achieve the organization’s goals. Also discover what gamification can be a tremendously good solution here regarding rewards

These rewards should be merit-based. Employees will recognize which of them has made an effort, and if they see colleagues being rewarded for no reason, they may lose motivation. Conversely, if employees see a high-performing employee getting a nice reward, it shows the value of that extra effort

Some possible rewards are

• An increase in salary
• A one-time bonus
• More vacation days
• Special projects
• A promotion
• Company-wide recognition

After the reward phase of the Performance Management Cycle, executives and employees may choose to meet one last time to evaluate the cycle as a whole. This is a chance to address any concerns and begin conversations about goals for the next year. After that, the cycle begins again

Include feedback from colleagues in the evaluation process

Increasingly, organizations are embracing the incorporation of peer feedback into the evaluation process. This peer review, or peer feedback, is a process by which employee peers assess the employee’s performance, skills, competencies or attitude. The exact process can vary, but in most organizations, employees only review colleagues with whom they have regular contact

Collegial feedback is a proven way to improve the performance appraisal process. Peer feedback allows teammates with different perspectives to provide unbiased feedback. Adding peer-to-peer feedback gives employees a better perspective on how they can grow in your company

Some benefits:

1. Open culture
   Collegial assessment and feedback is not just about gathering more information for the performance review. Allowing individuals to provide feedback to others fosters a culture of feedback and recognition and promotes collaboration
2. Performance Improvement
   People who receive performance feedback from colleagues gain valuable insight into their strengths and development needs. Asking feedback from colleagues makes the process of improvement and development visible and public. Individuals are more likely to take action in response to direct feedback from peers, since they are accountable to their peers
3. Accurate performance appraisal
   Integrating feedback from multiple sources into performance appraisal not only increases the perception of fairness, but also improves the manager’s ability to provide accurate appraisals
4. Uncovering hidden talent
   Colleague insight provides a unique picture of skills and qualities. Managers and organizations are thereby better able to identify individuals with team leadership, networking and influencing skills that would otherwise be missed in a traditional appraisal process.

Why is the Performance Management Cycle important in business?

By developing a good Performance Management Cycle, an organization can maximize the output of its employees and ensure that the organization’s goals are met

By evaluating regularly, an organization can continually monitor its own goals, and respond more quickly to changing forces in the marketplace. This flexibility means greater competitiveness

Employees also benefit from the Performance Management Cycle. By working with and receiving support from their supervisor, they feel like a valued member of the team. Their skills are developed and used meaningfully, and hard work is rewarded. These are all factors that increase job satisfaction and thus improve employee retention