Performance management is a vital process for any organization, no matter what the industry or mission. It involves defining the parameters of the work employees do and what it means for them to do so successfully. As long as an individual is employed with you, the process will continue.
Performance management means guiding individuals on how to support the goals of your organization; when your employees’ goals and those of the organization align, everyone wins. It also means making expectations clear and giving employees opportunities to develop professionally, growing their skills and careers.
Performance management is a constant process of defining goals, clarifying expectations, evaluating performance, offering feedback, measuring and reviewing results and then repeating the stages over again. It contributes to both the employee's career and the well-being of the organization.
There are many important elements of performance management, including:
• Clearly defining the scope of a particular job.
• Recruiting and hiring individuals who show the most promise.
• Communicating the company objectives to the employee.
• Communicating expectations about how to meet those objectives to the employee.
• Defining goals for each assignment and project.
• Holding performance reviews and giving regular feedback.
• Giving opportunities for improvement through training and other career-development methods.
Performance management is an ongoing process. However, typically, there are three stages that are repeated in a cycle, changing as priorities evolve.
At this stage, employees and supervisors discuss goals for the position and organization and create a plan for how to effectively meet them. The employer will clarify expectations, and the employee will articulate what they will need to meet them, such as specific technologies, training and more. You will also establish criteria for evaluation.
Monitor the employee’s performance as it relates to the goals you’ve established. While you should conduct regular performance reviews, you should also offer less-formal feedback routinely, so the employee knows how they’re performing and has the opportunity to improve if need be.
At the end of a particular cycle, such as a year, measure and evaluate the employee’s performance against the criteria you’ve established. If there is any need for improvement (as there often is — no worker is perfect), explain what it is and what the employee can do to make it happen. Then, set new goals for the next cycle. Remember: just performance management never actually ends — it keeps repeating.
Many organizations have established formal performance management processes and policies. Some of the most well-known and effective ones include:
Facebook’s performance management strategy is based on a system of continual review and peer feedback. Thanks to their internal software, employees receive real-time feedback from their colleagues before their twice-yearly performance reviews, they can address any issues and know where they stand. Managers also used the system to track team and project progress, as well as inform these biannual reviews.
Google taps into its many available resources to facilitate performance management. Some of the practices that comprise its strategy include monthly one-on-one meetings about performance, two more formal performance reviews every year and engagement surveys. The tech giant also has direct reports review their managers’ performance. To establish goals and evaluate efforts, they use objectives and key results (OKRs). Employees who perform well are often rewarded through bonuses and more.
Similar to Facebook, GE has an app called PD@GE through which employees can receive continual feedback. They can also set and track goals through the app. Managers have regular discussions with employees about their performance and can provide overviews of these conversations via the app as well.
Goldman Sachs overhauled its previous performance management system, which largely revolved around rankings and annual reviews, to provide more frequent feedback to employees. Now, they used a web-based system in which they can receive more continual feedback, meant to prompt performance discussions between managers and employees.
As you can see from these examples, many businesses are overhauling their performance management strategies to make the process more development- and employee-centric. Rather than relying exclusively on annual reviews, companies are trying to provide frequent feedback to give employees the opportunity to play to their strengths, learn and improve when necessary,