The overall business performance of a company depends upon how well it manages the performance of its employees. This is why organizations need systems that establish the necessary processes to monitor and measure the performance of their employees.
A performance review system that sets clear and specific performance expectations for every single role needs to also set SMART (Specific, Measurable, Achievable, Relevant, and Time-bound) goals, which help to improve the performance of an employee. They also help with the following:
A company’s overall business performance depends upon how well it manages the performance of its employees. This is why organizations set their strategy, policies, and practices into establishing, monitoring, and measuring the performance of their employees. To be credible, a performance review process needs to set clear and specific performance expectations for every single role. Then, there needs to be processed in place to periodically review the incumbent’s performance against goals, with adequate feedback. Many companies link their training plans, compensation plans, transfers, promotions, layoffs, and terminations to the result of their performance reviews.
When setting goals, most organisations believe in making them SMART (Specific, Measurable, Achievable, Relevant and Time-bound). Such goals help to improve the performance of an employee. An effective performance management system measures performance against the set of goals associated with a role. Here, we have attempted to list some frequently answered questions which probe into the reasons why this system is so successful.
When an employee has access to the full set of goals against which they will be measured, there’s complete understanding all around. Their contribution alone gets measured, taking subjectivity out of the equation. Many performance problems can be remedied with coaching, mentoring, or support when the manager finds an employee missing the specified goals. Given the clarity with which both approach the tasks, encourages a timely conversation and a quick resolution.
Knowing their own performance standards and goal attainment levels enable employees to aim for better results and aspire for career development by way of monetary rewards, promotions, etc. Realistic goals, however challenging, motivate employees to greater output and standards of performance. They face no ambiguities as they understand what is expected of them completely. Tough goals fail to deter an employee when they receive the necessary guidance and coaching which enables them to attain the goals.
An organization will quickly know which of its employees are motivated or committed to its vision and are contributing to its success. Appropriate feedback contributes to better behavior and performance from the employee as it resolves the employee’s difficulties and helps to clarify their doubts. The organization may also get to evaluate the attainability of a specific goal and revise it, or organize the necessary training to increase the skill levels of the employees, as necessary. Managers could provide new strategies and inspire/guide the employees to superior effort to reach a superordinate goal. This would help the organization itself to reach superior levels of performance and efficiency.
Goals are established at the enterprise level. They then cascade down to all the employees, who are involved in executing the vision and strategy of the organization. Employees motivated to stay in the job willingly work to attain the goals set for them. Even though goals become attainable with appropriate feedback and help to improve the standards of performance. An effective goal is consistent with the vision, values, and objectives of the organization, and connects with the emotions of the employees. They spare no effort in trying to reach it through adopting better strategies and performing better.
Managers work with their employees to establish the goals and monitor the employee’s performance against them. Existing employees have their goals set at the beginning of the fiscal year. For new employees, the goals need to be set within the first three months of their coming on board. Both should collaborate on the achievement of the goals and review the possibility once every quarter. An employee needs to be aligned to the goals of not just their manager but also that manager’s manager.
Goal setting works just the same in organizations, whether they are big or small. Larger organizations may choose their set of goals unilaterally, due to the time needed to resolve conflicts and to get everyone to sign-on. Smaller organizations have the luxury of a participatory approach to goal- setting, reach a consensus, and have better acceptance.
Modern management processes swear by a performance management review which is linked to goal setting. These reasons for this are not far to seek. This is not a bell curve model which is forced onto managers making them take a call on whom to elevate from among a This process allows for an honest evaluation as well as recognition for helping the organization itself meet its goals. It will also enable the management to provide constructive feedback which includes a performance improvement plan which offers the necessary coaching and mentoring to the underperforming employee. Ultimately there’s a clear need for performance management for all organizations which have a clear vision for growth and success which is not possible without the support of employees whose work turns it into reality.