What is performance management? | human resources blog (2023)

Performance managementIt is an important human resources function in a company or organization that employs employees. It describes a set of strategies and activities that business owners and managers employ to ensure that employee performance levels are optimal throughout the organization. This often includes rewarding good performance and providing support and/or disciplinary action when an employee performs below agreed benchmarks.

Proper performance management can save companies from many problems in the future, such as: B. Unmotivated employees, complaints and lack of productivity, which can affect the company's results. Continuous improvement and further development of employees will also lead to this in the long run.growth for businessthrough a more motivated and qualified workforce.

A brief history of performance management

As performance management specialist Helena White, a HR consultant with the South West Devon HR department, explained to us in ourPodcast:

“[Performance management] was introduced to help large companies rank their people and determine who was the best and who was the worst. It has gone on without a lot of fundamental change for almost the last 70 or 80 years, but only in the last 5 years has it started to change.

“It started in Silicon Valley with Adobe and companies like that, then spread to management consulting companies like Deloitte. They basically said we need to rethink this, it's not working, and they came up with different topics on how to do this differently, but there are some general things they did right away."

Learn more about how performance management works now below. If you want to know more about its history, the Harvard Business Review is very good.TimelineIt shows how performance management approaches have shifted from a focus on employee accountability to learning and development in response to the growing need for organizations to be agile.

performance evaluation

Performance management should be a continuous activity (or really a series of activities) within an organization and have regular and varied activities.performance evaluationit is an important part of it. During an appraisal, an employee and her manager discuss the employee's performance (and how the manager can help with performance) to recognize good work and potential areas for improvement.

Keep reading:Are employers required to conduct an assessment interview?

Traditionally, managers have tended to conduct an annual appraisal interview with the employees they manage. Personnel Consultants However, this has changed in recent years. Helen White said of the traditional approach:

“That leads to a pretty rigid way of thinking about a person's performance. If someone has been an average performer in the past, the expectation is that they will continue to perform average in the future, and traditional performance management systems have included some form of individual performance ranking or ranking, and sometimes this too. it has been used to compare it with its performance. colleagues.

"It took a long time; HR departments around the world have spent countless hours managing performance management systems, keeping track of them, trying to get all the meetings done, and collecting all the paperwork.

"It's not seen as part of the job, it's a separate process, usually managed or driven by HR." I haven't seen a lot of people in my career that have really helped people."

Many organizations have already adopted a more frequent approach to appraisals and performance with ongoing monitoring and regular feedback from managers. Helena noted that, in recent years, the focus of some larger companies has shifted to:

• “From looking back to looking forward. Really tell the employee:What do you need help with to do your job differently in the future and how can I, as your manager, help you with that?"
• "Much more frequent meetings, so it doesn't look like a big, scary meeting once or twice a year. It's something that's built into the regular meeting schedule managers typically have with their employees. It only takes 15 to 20 minutes once.. ” fortnightly/once a month to raise your head above the everyday, look a little further into the horizon and say:It's where you need to be, how do we get there?"
• "Move from a fixed mindset to a growth mindset with the belief that people can change and grow with the right support and training."

360 degree feedback

Some companies also choose to implement360 degree feedbackfor employees where the feedback comes from something other than the employee's immediate manager (for example, they may receive feedback from their teammates or subordinates). This can give employees a more holistic understanding of their role in the organization, what they do well and what they do for others, and what they can do to improve.

And as SMEs?

It may seem daunting for an SME to adopt a performance management system or update its approach, but Helena White explained why SMEs are perfect for a more modern and flexible style of performance management:

“SMEs should have a more flexible approach integrated into their daily work. If an SME does not have a process, I recommend introducing frequent, shorter and less bureaucratic meetings with employees who can be integrated into the daily work and who can be future-oriented and attentive to the development of their employees, instead of repeating what they did in front of you Year they did or did not do, which will not help anyone.

“SMEs are very well positioned to take a more flexible and forward thinking approach because it is better suited to their business. It's not big bureaucratic companies that need to tell the board of directors what percentage of employees are in the "Exceed Expectations" category. They just want to make sure their employees develop their skills and abilities, and they want to do it in a way that doesn't require a lot of management time and effort.

dealing with poor performance

addressingbad performanceIt can be difficult, but it's important to make sure the organization continues to thrive. An investigative approach, where you determine why someone is performing poorly (as it could be for any number of reasons, from lack of training to personal issues), will help get the employee back on track with measurable goals.

You can address issues of underperformance informally (with an informal meeting or conversation to find out more about why an employee might be underperforming) or use a more formal documented process, which can be especially important if you are terminating an employee. employee. performance later across the board.

For more advice on this area of ​​performance management, HR manager and author Gemma Dale has written an excellent guide for the myhrtoolkit blog.how to deal with poor performance.

Bad performance and termination

If an employee continues to perform poorly, it can sometimes result in termination. It is important to follow a fair process, maintain evidence of that process, and communicate clearly with the employee at all stages to avoid unfair termination or discrimination claims.

To learn more about it, keep reading our guide.How to fire an employee for poor performanceby senior employment lawyer Matthew Ainscough.

remote performance management

With more employees working remotely from home or not, the need for performance management processes and techniques that work well for remote and distributed teams has increased.

Oincrease in remote worksince 2020 it has led to much-needed changes in the way employers and managers view performance. There were fears of lost productivity, but in most cases they proved unfounded, since performance is not just a matter of presence.

Instead of simply observing employees in the office, managers must now consider the results that employees are delivering and measure their effectiveness and level of performance against what they produce.

There is also a growing need for regularly scheduled calls with employees to keep track of projects and tasks and ensure everyone is on the same page regarding goals and priorities.

Know more:Introduce performance management when your employees work remotely

Listen to our performance management podcast

We interviewed Helena White from the Human Resources Department about performance management and featured her on our podcast; it's worth a listen for even more information and advice on performance management, especially for SMEs.

You can listen below or find our podcast atSpotify:

more resources

Acas: Performance Management

CIPD: Performance Management: An Introduction