Everyone is familiar with the carrot-and-stick method that we have come to expect in practically every firm. In corporations, using a mix of rewards and punishments to reinforce behavior or achieve a goal has always been the standard.
This technique of rewarding and punishing employees makes half of them happy while the other half is unhappy and unmotivated. Many of them mistakenly feel it is due to poor performance management. But is that all there is to this term?
Performance Management — The Process
A successful performance management strategy includes not just recognizing employees for their hard work, but also proactively preparing for their development and career advancement. It essentially consists of these six stages:
- Groundwork and Planning
It all starts with determining an employee’s skill set and interests, then matching them to the work. All of the company’s personnel must be a good fit for their jobs. Management tends to promote people without determining whether they fit the description or are interested in the new function. This results in poor performance and a high level of stress.
This is not a favorable omen for the company’s future growth. Employees must be made aware of the job role’s requirements and expectations. The type of skill set necessary, as well as the challenges. Employees would be less likely to experience culture shock and become demotivated as a result of this.
- Organizing and Systematizing
Following the initial planning, the strategy must be smoothly put into action. The action plan should include everything that is pledged to the staff.
To guarantee proper two-way communication, management must delegate managers to function as a bridge between management and employees. To better enable people in the organization, managers must have the ability to incorporate proposals and feedback from employees.
- Training and Mentoring
This is a crucial part of the performance management procedure. An organization’s managers must be trained to mentor and coach its staff. They should be able to provide people with the mentality they need to do their jobs well.
Employees are kept motivated to perform via regular one-on-one meetings and pep talks from management, who care about their development as well as the organization’s performance.
- Growth and Development
Constant monitoring and feedback pave the way for identifying the numerous performance barriers that employees confront.
Management can map the needed skill set and competencies to the actual level of performance and close the gap through a series of training and development activities. This enables employees to not only perform better but also to advance professionally within the company.
- Monitoring and Feedback
If performance is not reviewed after the session and feedback is not given to the employees, mentoring, coaching, and training sessions can be made ineffective and useless.
Moreover, managers must define short-term goals for each team member and meet frequently to review issues, roadblocks, and growth opportunities. Employees must receive a mix of positive and negative feedback to avoid feeling disheartened and unmotivated.
- Backup and Analysis
Any procedure must be documented. The process must be closely monitored, and the results must be saved for future reference. This promotes openness while also removing the possibility of the procedure changing in the future.
How Can Performance Management Improve Retention?
Only 5% of the time can a standard performance management process increase performance. However, according to a poll, most businesses today require at least a 20% improvement. Almost 58 percent of companies believe their performance management method is ineffective.
According to a 2013 Mercer survey on the impact of performance management, 43 percent of respondents thought performance management helped in improving employee performance, 21% said it helped in providing performance feedback, and 15% said it helped in focusing on the “right” things.
The survey included 1,056 companies with employee strength ranging from 1000 to more than 10000 across 53 countries. In 2015, the same survey company polled 3000 employees in the United States and discovered that 37% of employees in the “happy and satisfied” group wanted to leave the company.
Ways to Improve Performance Management:
1. Set effective goals
2. Plan and communicate the expectations
3. Establish an ongoing process
4. Improve productivity through better goal management
5. Gather information from multiple sources
6. Pay attention to documentation
7. Mentor and train your managers
8. Polish the performance review
9. Give credit and rewards where they’re due
10. Encourage participation of all
Every year, the millennial and younger workforce seeks out greater tasks and a changing atmosphere. While older generations are more stable and focused on job happiness, millennial employees are constantly on the lookout for new employment and challenges. They’re also the ones who tend to work in groups and leave in groups. To meet their wants and expectations, management must move away from the traditional retention approach.
As a result, performance management should not be viewed as a danger to productive man-hours. It is a tool that aids in enhancing staff productivity and retention. It aids in the removal of all barriers to growth and performance.