Let’s face it. You can’t expect your employees to step up their game when neither they nor you know how they’re even performing in the first place. The answer? Performance Management.

What is Performance Management?

Without sounding too technical, Performance Management is the process of getting employees to perform to the best of their abilities.

What’s important to note here is that Performance Management has to be systematic and periodic, with time-bound objectives or Key Performance Indicators (KPIs) defined for every employee.

Additionally, Performance Management involves tracking, measuring and rewarding employee performance quarterly, bi-annually or annually.

Why do businesses need Performance Management?

Hiring the right people is something every employer wants, but that’s just the tip of the iceberg. What’s equally important is to tap into every employee’s maximum potential so that the company performs its best.

Simply asking line managers in passing about how their team members are performing means that their feedback is up in the air - and we can guarantee that it’s going to stay there if things remain this way.

After all, you’re investing a ton of time and money in rewarding and training your employees. You’d want to see hard data on how well your ‘investments’ are paying off. That’s where Performance Management comes in.

5 tips on Performance Management

Old school employers will conduct performance appraisals annually and only then dole out salary increments based on performance. That’s the bare minimum you can do to get the best out of your teams.

We’re here to tell you what else you should be doing to get Performance Management right.

1. Make a Performance Management playbook

If you fail to prepare, then prepare to fail. Before you even think about making that appraisal form, make sure you have a realistic strategy that your company’s leadership is aligned on. A playbook is where you’re going to document this strategy. It should talk about the overarching goals, objectives, processes, team players, resources, timelines (if any) and success metrics.

You don’t have to spend days or weeks trying to perfect the playbook the first time round. Take a few days to prepare a basic version, and build on it over time. You might even have to tweak your initial Performance Management strategy if the need arises.

2. Get a Performance Management System

We live in an age where we can leverage technology for repetitive tasks. When it comes to Performance Management, what you need is a Performance Management System. In case you’re wondering, it’s a software where you can track, measure and determine performance-related pay in one place. The best part is that the software will do most of the work for you so that you can focus on things that technology can’t do i.e. make decisions, resolve conflicts and interact with teams.

3. Make Learning & Development a Key Performance Indicator (KPI)

Never underestimate the power of learning and development. Making it customary for your employees to attend training sessions or complete online courses for upskilling will go a long way in ensuring that they deliver impactful outcomes. The best way around this is to include Learning and Development in their KPIs. For example, for a Sales Executive, a Learning and Development KPI can look like ‘1 online course on B2B Sales’.

Keep in mind, though, that you need to enable your employees to meet these KPIs by providing them with the resources and support they need.

4. Conduct quarterly performance appraisals

Asking line managers to fill out appraisal forms every four months may sound like too much to ask of them, but it’s an investment for the great good. They’d be more than willing to do so if you tell them that they’ll also get salary increments if they’ve performed well.

It’s a good practice to track performance every quarter because you’re rewarding employees for their efforts frequently, and as a result, they’ll perform even better. Both you and your employees will reap the benefits.

5. Implement a Performance Improvement Plan (PIP)

When an employee isn’t performing well, your go-to strategy would probably be some sort of intervention by HR. The line manager may be asked to get daily progress updates from the employee in question, and the employee may be issued a warning letter. Three warnings and they’re terminated. If that’s how things work at your company, you’ve got it all wrong. It’s time to take a 180-degree turn.

If you want underperformers to pull their socks up, you need to motivate them to perform better rather than demotivating them. Besides, it’s only fair to give them a chance to prove themselves. Prepare a Performance Improvement Plan (PIP) for them with their line manager’s input, and brief them about it one-on-one. This is a plan which will include time-bound goals smaller than those initially set for them. For example, a Marketing Manager may be asked to generate 100 inbound leads during a 4-month PIP instead of 300 inbound leads that were set for them at the beginning of the period.

The way forward

Lay down the Performance Management practices that you’re already implementing at your company. Keep doing what works, and scrap what doesn’t work. Try out the tips we’ve shared with you in this article if you haven’t tried them out yet. You won’t be sorry.