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7 Tips and Tools for Effective Performance Management

7 Tips and Tools for Effective Performance Management
Bitrix24 Team
December 9, 2021
Last updated: December 9, 2021

A company’s workforce is its lifeblood. A business’ success, longevity, and reputation, among many others, depend on how well their employees carry out their jobs on a daily basis. They constantly and consciously have to be heading on the same path and having the same vision as the company they are working for. If not, there might be a lot of trouble down the line. Effective performance management takes care of this.

 

Performance management might seem like an HR function but it’s just as much a team manager’s job, in most cases. Effective performance management is sometimes made part of a leader or manager’s job and only extreme cases are escalated to HR. In this article, we will go through the tips and tools for effective performance management. First, let’s start with the basics.

 

What is performance management?

 

If you look at your company as a well-oiled machine, you will appreciate how a worn-out, demotivated employee can make one part of it squeaky and things will start malfunctioning. Effective performance management helps keep this from happening. It’s a continuous process between employees and managers where they plan, monitor, and review the employee’s goals in comparison to their contributions.

 

Both employee and manager collaborate and communicate to help the employee reach their full potential and lead the company to success. An effective performance management plan puts the employees’ best interests ahead of everything else, ensuring that their goals – both short and long term – are aligned with the company’s mission and vision. Now, we proceed to the 7 tips and tools for effective performance management.

 

1. Performance appraisals

 

Probably the most well-used out of all the performance management tools known to managers and leaders, performance appraisals combine the employee’s individual goals with those of the organization, creating a trajectory to success for both parties. Performance appraisals make good use of performance reports to show employees what they’re doing right and what they need to improve on.

 

When using performance appraisals in the performance management process, a leader or manager should think of themselves as coaches so they constantly have to be in touch with their employees, cheering them on and leading them to achieve their goals. Conversations should be honest but constructive, being sensitive to the fact that one wrong word can lead to demotivation.

 

2. Key performance indicators (KPIs)

 

To get anywhere, you need a map to go from point A to point B. In terms of how to manage employee performance effectively, this is what key performance indicators or KPIs are for. KPIs are the compass for steering your employee in the right direction in terms of how they carry out their jobs and perform their duties.

 

KPIs are effective tools for demonstrating performance because it’s all data. You have numbers, percentages, and graphs to aid you in showing an employee where they are in the performance spectrum in proportion to where they should be. You can also use KPIs when drawing up performance improvement plans (PIPs) for those who are falling a little behind and need a little more coaching.

 

3. 360° Feedback

 

Good, helpful, and constructive feedback goes both ways and this is where the effective performance management system otherwise known as 360° feedback comes in. This performance management tool answers a key question: “How well is this employee performing?” True to its namesake, 360° feedback allows each employee – rank-and-file staff, supervisor, and manager alike – to have their performances assessed by their peers, the very people they work with daily.

 

360° feedback is usually carried out as a survey, the answers are kept anonymous and the results are confidential. The tool is usually used in training and employee development, with the delivery of the results usually carried out by the direct superior.

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4. Reward and recognition programs

 

Excellent performance should always be celebrated and praised in public as well as rewarded to inspire others to aim for the same and encourage top performers to always be outstanding. Employees are galvanized to outdo themselves when they feel valued, appreciated, and seen, especially by their leaders.

 

Recognizing top contributors to the business and rewarding them for their efforts should be a part of every company’s employee performance management system. Although many people would prefer financial rewards like cash bonuses and incentives (and many companies do give these out) a simple commemoration can go a long way in motivating employees. Something as simple as a certificate or plaque or even a shout-out in the company message board goes a long way to boost morale.

 

5. Real-time coaching

 

The best feedback is real-time feedback. No matter how good what you have to say is, if it’s not said at the right time, it becomes diluted and may sometimes fail to make an impression. Keep in mind that feedback is always best when delivered as soon as possible. Whether you’re correcting a behavior or giving kudos, it’s important that you strike whilst the iron is hot, so to speak.

 

Real-time feedback works well when you’re working on premise, within the same bullpen but it also can be done when you have people working remotely, thanks to advances in communications technology, report-generation, and the availability of a wealth of gadgets. All a manager really needs is performance management software to complete the job.

 

6. Performance development plans (PDP)

 

If you want to make a big impact and carry out effective performance management, focus on your employee’s personal development. In order to do this properly, both employee and manager should come up with a PDP that’s focused on the employee’s areas for improvement or challenges in the workplace. What are they having difficulties with? Which parts of their job do they find challenging?

 

From there, a plan will be formulated to help the employee conquer these stumbling blocks using actions that address them until the employee is able to overcome them. Once the goal of the PDP is achieved, you can move on to another training or development need.

 

7. Wellbeing schemes

 

Since the point of most performance management tools and systems is to motivate, empower and inspire employees, a wellbeing scheme can also work well. Stress brought on by professional and personal challenges can take a tremendous toll on someone’s well-being and lead to demotivation, poor performance, and dissatisfaction in the workplace.

 

There is performance management software that allows you to monitor your employees’ workloads so you can be able to tell if they’re on the verge of being overworked and overwhelmed. You can also measure an employee’s stress levels so you can step in and offer them a breather when you notice that they’re approaching burnout. There are a lot of things you can do to look after your people’s wellbeing. Flexible work hours or flexible working conditions (on premise and remote) can do wonders as well as time offs and non-work-related activities like team-building sessions can help a lot as well.

 

Management well-performed

 

The keys to effective performance appraisals being used in the performance management process are communication, honesty, transparency, and sincerity. That may seem like a lot but if you want happy, content, and loyal employees, they will seem like simple, worthwhile practices. For most employees, being heard is enough. But if they know you’re being honest about caring for their wellbeing, transparent about your plan to help them improve, and sincere in your push to make them better, you’re well on your way. Here are some tips to get you there:

 

●      Set clear expectations and SMART goals.

●      Be prepared to collaborate.

●      Give them the tools to succeed.

●      Keep coaching sessions regular, timely and specific.

●      Be a coach and a mentor.

●      Recognize and celebrate wins.

●      Correct in private.

●      Converse in a professional manner.

 

More than anything, remember to be patient. Rome wasn’t built in a day and winners are not made in one breath. You have to put in the work and the time as well as the effort. If you know that the person in front of you has the potential to be someone great in the company, your efforts won’t be for nothing.

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