The focus on workforce productivity has never been greater. Digital disruption, new business models, and escalating costs have compelled organizations to rethink their approach to talent management. Every organization looks to create an environment where employees are empowered to succeed every day. However, ineffective processes, legacy systems, and the lack of executive buy-in keep organizations from creating the intended environment.

Performance management is one such process that is critical to the success of every organization but is often overlooked or executed ineffectively. So, what does performance management really entail? And why does it get such a bad rap?

What is Performance Management?

As the name suggests, performance management is the process of monitoring, managing, and reporting individual and collective employee performance over a period of time. The objective of creating a performance management process is to improve the organization’s performance and productivity in the long run.

Key performance indicators (KPIs), key result areas (KRAs), and management dashboards are typically used as metrics for measuring employee performance. These metrics help leaders understand how well employees, teams, business units, and projects are performing in relation to their strategic goals and objectives. Performance management essentially lets HR teams capture employee performance data, analyze it, identify areas of improvement and optimize the process to improve productivity. Should be easy, right?

Unfortunately, performance management is one of the most unpopular HR tasks across organizations. The lack of transparency, the added time required to fill in evaluation forms, and constant speculation around how managers and HR will grade employee performance has led to the process becoming one of the most dreaded annual events.

Initially, what started out as a way to objectively measure and improve productivity, performance management has since morphed into the exact opposite – a subjective evaluation process that leads to little change. Moreover, performance management is now viewed as a process created to critique employee performance rather than celebrate success.

So, how can HR teams transform this process within their organization to drive real change and achieve broader business objectives?

3 Effective Performance Management Techniques

Current performance management systems are inherently flawed. They are nothing more than annual form-filling exercises. There is a better way. A way where you don’t need to sacrifice employee morale and engagement to drive productivity. Let’s look at five easy performance management techniques that will help your organization succeed:

1. Align Performance Management with Business Objectives

While this may seem like a no-brainer, only 35 percent of the organizations believe their performance management process is aligned to business objectives. KPIs, KRAs, and other productivity metrics must directly relate to identifiable business outcomes. This helps employees understand how their work affects the organization’s success. It increases engagement while encouraging consistency and accountability.

2. Embrace Continuous Performance Management

Annual performance reviews are of little help to both – the employees as well as the employers. By the time you get to the next performance review, you forget to measure the impact of the feedback given last year. Continuous performance management allows managers to coach and provide regular feedback to employees so they can continue to build on their skills and improve productivity. In annual performance reviews, managers have little incentive to provide feedback and follow-through. However, continuous performance management is more than just a process, it must be embedded within the organizational culture. It requires executive buy-in and HR needs to play an active role in executing continuous performance management.

3. Use Performance Management Software

As the nature of work evolves, it becomes increasingly difficult to measure it in the absence of the right technology. Performance management is a rich source of data that can be analyzed to gain insights into employee performance. Moreover, communication is a big part of performance management, and for large teams, it’s virtually impossible to have in-depth one-on-ones regularly. Performance management software enables managers to get a real-time view on the progress each of their team members is making. Dashboards and visualization tools add another layer of actionable intelligence to performance management data.

Finally, remember, performance management is not supposed to be punitive, its objective is to reward success. It should drive employees to bring the best versions of themselves to work every day. Effective performance management techniques are integral to building a culture of high performance and the tips listed above are a great starting point for organizations of all sizes. Employee success relates to business success. And organizations that understand this will emerge victorious in the long run.

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