Reinventing Performance Management In Your Organization

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We have seen that most companies have done their minor or no appraisals last year due to loss from the
corona pandemic. That’s why every company is redesigning and reinventing its performance
management system to engage and motivate its employees. When we talk in terms of McGregor’s XY
theory of management, managers are divided and tending more towards theory X as they believe that
employees are motivated by pay and they need supervision to make sure they get their work done.
 

Today, the traditional methods of performance management in which employees are rated annually
based on the number of working hours, total number of leaves taken, and their relationship with their
reporting managers have become irrelevant. This is because today, both the employees and employers
need transparency in every process. That's why new practices of performance management are coming
into the picture.

In the established practice, managers set employee objectives at the start of the year and conduct a
yearly survey towards the year's end, rate them/score them and give bonuses, promotions or career
advancement opportunities to the employees who they think deserve it. This method is often considered
futile as it focuses more on measuring an employee’s past performance, rather than improving future
work. This impacts the overall performance of the organization.

According to Dave Ulrich, Co-Founder, and Principal, The RBL Group “Good performance accountability
is about having a positive conversation between manager and employee. A manager is a coach and
communicator, not command and controller”.

Today, managers are facing issues in evaluating the performance as most of the organizations are
working from home. That’s why an ever-increasing number of organizations are adopting HR technology
to measure and manage their employee’s performance. The use of HR technology in performance
management can simplify the evaluation process and can help managers save both time and effort. A
performance management system allows managers to monitor an employee’s performance even
remotely.
We, as an HR tech company, are getting a lot of customized requirements because a lot of small and
medium scale industries found this software as an essential tool and need of the hour. Secondly, For an
HR tech company having both a performance management system and payroll, it is easy for a company
to link the performance with payroll and appraise the employee accordingly. Mercer’s 2019 Global
Performance Management Study has shown that at least 85% of the companies have been linking
performance and pay decisions and 70% of the companies link the two by assigning performance ratings.

Besides, leveraging the benefits of HR tech in the performance evaluation, there are some other ways
that can help you redefine your performance management process.

Some of them are as follows:

1. Set SMART Goals

Here smart stands for specific, measurable, attainable, realistic and time-bound goals. Setting SMART
goals can help employees to prioritize their workload. This will ensure the timely completion of urgent
deliverables and will improve the overall performance of the organization.

2. Align Employee Goals With Business Goals

This is one of the major things that businesses need to focus on while discussing the performance
evaluation plans. It is imperative for the employees to be in alignment with the organizations’ goals. OKR
is one model which is acquiring a ton of notoriety which allows managers to keep a tab on progress and
encourage engagement around measurable goals.

3. Implementing the 360-Degree Feedback Process

Gathering performance information from multiple sources improves the overall performance appraisal
process. Taking feedback from other employees, departments, or teams can help in a fair and transparent
performance evaluation and boost employee morale.

4. Go Beyond Performance Appraisals

Usually, performance appraisals end with compensation modifications, this is not what employees
actually want. As people leaders, you need to set their vocation goals, sort out the learning and
improvement needs, comprehend the potential and basic abilities, and much more. This creates a sense
of fairness and significantly boosts job satisfaction.

5. Using 9 Box-Matrix

9-box matrix helps you analyze both employee’s performance and potential. It allows managers to track
employee improvement and progress. A 9-box matrix allows HR leaders to view relevant performance
data at a glance. This helps you identify the star, average and poor performers of your organization.

6. Use of Bell Curve Analysis

If you are not familiar with the term, let me tell you what it means. It is a performance evaluation method
that enables organizations to plan employee benefits, spot career growth opportunities, and also estimate
attrition and hiring needs. Today, a lot of organizations are evaluating employee performance using this
method.

The performance management process should be simple and efficient and must add value to your
organization. All this can be facilitated with the use of a performance management system. The use of HR
tech can reduce manual efforts, errors, increase fairness, and boost employee satisfaction. Besides using
HR technology for measuring employee performance, having frequent performance conversations can
also prove to be beneficial for your organization. 

This will not help the managerial side for setting the goals and competencies for their employees but also
from the employees’ side as employees will not align to the mission and vision if the organization ignores
employee problems and does not explain a clear path for improvement.