Performance management provides a systematic approach for improving, organizing, and consistently enhancing employee performance. Effective, accurate documentation, constantly maintained for every employee, accurately tracks progress and achievement. To ensure good quality product quality and consistent service, employees need to be continually challenged to achieve and exceed individual and company goals. Managers use performance management tools and techniques to motivate people, create an atmosphere of teamwork, and facilitate communication between workers.
For the individual worker, performance management consists of regular assessments and evaluations to determine where improvements can be made. In addition, managers and supervisors may use tests and interviews to uncover what areas an employee needs more or less coaching. Continuous coaching helps to attain and maintain desired goals. An effective performance management strategy involves evaluating an employee’s strengths and weaknesses, their talents and skills, their preferences in the work environment, and other important factors.
The importance of performance management cannot be underestimated. One of the primary purposes of performance management is to ensure top performance by rewarding those employees who are performing at their best and setting benchmarks for those who are performing less than best. For example, if an employee is not getting the top performance they expect for themselves or their job, they should be evaluated and told what they need to do to improve. If the employee is performing below expectations, performance management can be used to help improve that person’s performance and assure that he or she will receive the highest possible compensation in order to keep that performance up. Other benefits from performance management include encouraging new employees by acknowledging and rewarding those employees who are doing well and setting high standards for those who are not as effective.
Performance management systems include metrics to help managers measure progress and set goals. Employees need to know what is happening, where they are going and how to get there. By providing specific information about goals, objectives, and measurements, performance management provides the framework employees need to achieve these goals.
When an organization sets performance objectives, it is necessary to motivate and guide people to achieve those objectives. Performance objectives should include both quantitative and qualitative aspects of employee performance, such as: the achievement of career goals and objectives, meeting strategic goals, closing the performance gap, and increasing productivity. Employees may not be aware of their internal or external objectives; therefore, a coaching program to evaluate and improve performance should be implemented to ensure all employees understand what the objectives are, why they are important, and what they must do to achieve them.
In the past, performance-management systems consisted simply of two tools: performance reporting and performance measuring. The measurement tool was a tape recorder that measured things like speed, handling, and productiveness. Performance reporting usually involved filling out sheets detailing what employees did and submitting them to the management. Management would then look at the sheet and make judgments about performance, often making conclusions that were incorrect and unfair. Today, technology has provided one company with an entire set of metrics that managers can use to measure employee performance and communicate important information to employees. Using a customized performance management system gives managers one tool that truly maximizes the benefits of metrics.