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Performance Management System for Employees: 4x Key Elements to Include

Choosing the right performance management system for employees: the rise of hybrid work and the employee experience

 If your employees are happy, they become your salespeople who speak with utmost passion for the company they work for.

Pooja Agnihotri, author of 17 Reasons Why Businesses Fail :Unscrew Yourself From Business Failure

A report from the Chartered Institute of Personnel and Development highlights a number of crucial changes to how businesses now operate. One of the fundamental changes lies in the increase in hybrid working, even as businesses begin to open up their offices again to workers. The study explains:

“Pre-crisis, 65% of employers either did not offer regular working from home at all or offered it to 10% or less of their workforce. After the crisis, that share is expected to fall dramatically to 37%. However, the big increase is at the other end of the scale. Before the crisis, just 15% of employers said that more than half their workforce worked regularly at home, but after the crisis, some 40% of employers said they expect more than half their workforce to work regularly from home.”

These new patterns of work require a rethinking of how performance is managed. Additionally, an increased focus on the employee experience with a compassionate approach to well-being will drive how managers decide upon the types of performance management system best suited to their needs. Performance management software is essential for businesses looking to embrace these changes. 

1. Automated onboarding processes which promote culture and set employees up for ongoing development

The employee experience begins on their first day within an organization. The onboarding process allows business leaders and HR managers to set the tone and help make sure the new hire starts on the right foot. During this process, the core values of the organization should be expressed clearly.  

Car manufacturer Toyota was able to go from a middling-size company to a world leader by embracing a strategy known as kaizen. Translating as “continuous improvement”, this approach has since been adopted as a core practice for helping employees develop their latent talents.

Let’s examine in more detail how a performance management system for employees can help integrate continuous improvement into the mindset of the workforce.

Creating a culture of continuous learning

When creating a culture of continuous learning there are key factors you need to consider. Inspiring staff to develop their skills in order to be able to do more involves the following core components:

  • Creating freedom and autonomy. Employees need as much leeway as possible to explore new concepts and approaches to doing their job. A company culture which allows employees to step outside of their comfort zone gives them the scope to learn and try new methods. 
  • Encouraging the pursuit of ambition. Successful employees are always looking for the next stepping stone towards better things. A strong employee-oriented culture helps to avoid stagnation and the creation of safe spaces where growth and development are inhibited.
  • Accepting failure is a core element of learning. Employees who are afraid to put a foot wrong are less likely to push themselves to their limits. But failure is a fertile foundation for growth. A culture which allows employees to make mistakes and learn from them is a culture geared towards innovation and out-of-the-box thinking.

Ultimately, these core values need to be promoted clearly throughout the workforce. A vision that lacks articulation will be meaningless, and the responsibility for this lies with the CEO.

Aligning personal ambition with professional goals using Personal Development Plans (PDPs)

Tying this culture of learning to something tangible can be achieved with Personal Development Plans (PDPs). Such plans allow new employees to set off in the organization on the right foot. Created as a collaborative effort between HR managers, team leaders and the new hire, PDPs provide a framework for development. 

HR leaders and managers can ask new employees a series of questions to help them put together a PDP that will drive their progress.

  • What are the core skills you want to develop?
  • How can you develop these skills within the framework of your roles and responsibilities within the organization?
  • What complimentary skills can you add to your existing skill set?
  • Do you have access to the resources and training needed to expand these skills? Can the organization support you in any way?
  • What should you spend more time on moving forwards?
  • What is your purpose in life? What motivates you to perform to a higher standard?
  • Are there any roadblocks preventing you accomplishing your goals? How can the company help you to remove these obstacles?

2. Well-being promotion mechanisms for a hybrid workforce 

HR leaders and managers face additional challenges when promoting well-being to a hybrid workforce. Without the daily face to face interaction from working together in an office, identifying and dealing with stress can be difficult. New digital mechanisms need to be put in place to overcome these communication barriers.

Spotting signs of stress – and taking steps to reduce it

When employees are experiencing stress due to the strain of their role, a number of behaviours are typically exhibited. Tension can be expressed in irritability or excessive preoccupation with trivia. Low morale can lead to dissatisfaction with themselves or the organization. Communication difficulties can arise, often linked to increased absenteeism.

Identifying these and other traits related to poor well-being can be difficult when dealing with hybrid workers. Performance management software combined with HR tools can help address this challenge in a variety of ways:

  • Monitor absenteeism and sickness data to identify those employees who may be struggling.
  • Encourage managers and team leaders to discuss work-life balance with employees on a regular basis.
  • Encourage connectivity between team members. Intranets and forums can be set up to connect people who share interests and hobbies to strengthen relationships.
  • Hold mental health awareness programs while providing access to internal and external support mechanisms. 
  • Offer resources to build the necessary skills to improve well-being, such as resilience initiatives. These can help encourage employees to look at challenges as opportunities rather than threats.

Boosting well-being through employee recognition – best practices

Recognition isn’t a finite resource, nor is it simply a corporate “thank you” award program used to accompany annual reviews. Rather, recognition should be part of an ongoing management process that sits above any rewards programs a business engages in.

There are several key behaviours business leaders and managers should consider in order to ensure their approach to recognition is successful. These include:

  1. Recognising great performance in a timely manner. Praising an employee for good work shouldn’t be held off until the next scheduled one2one meeting or catch-up. Let them know they’ve done great work in the moment so the recognition is clearly tied to their actions.
  2. Link recognition to the company’s core values. When an employee delivers high performance, the recognition associated with this should be emphatically linked to values which drive the company’s mission. 
  3. Create multi-layered recognition programs. Recognition doesn’t just have to come from an employee’s direct manager. For recognition to function properly it should come from peer-to-peer, company-wide and anywhere else relevant to the observed good behaviours. Lateral recognition is a great way to boost confidence between team members and strengthen trust.
  4. Make recognition personal. Managers who take the time to demonstrate approval in a way tailored to the individual will be increasingly valued. Bringing a smile to an employee’s face enhances the value of the recognition and makes it clear they are valued as human beings.

Using a performance management system for employees allows managers and HR leaders to deliver recognition of great performance throughout the workforce. Digital rewards schemes help to enhance the feeling of satisfaction gained by hard-working employees. 

Additionally, peer-to-peer recognition can be integrated into an employee’s daily workflow and displayed via dashboards and newsfeeds. By raising the visibility of recognition, the behaviours which lead to great performance are more easily replicated by colleagues.

3. Processes for establishing and monitoring achievable goals with a performance management system for employees

If you want to be happy, set a goal that commands your thoughts, liberates your energy and inspires your hopes.

Andrew Carnegie, industrialist and philanthropist

Goals have long been the established method for providing structure and routine to employees in line with an organization’s expectations. But they can also help boost motivation and engagement if they are set correctly. 

Boosting performance and motivation with goals

The article from McKinsey, How effective goal-setting motivates employees, highlights three key methods to ensure goals are motivating.

  1. Involving employees. Goals should be set in conjunction with management and employees throughout the process. When setting SMART goals (specific, measurable, achievable, results-driven and timely), do so as part of an ongoing conversation. Ambitious stretch goals should likewise be crafted in tandem with the employee in question.
  2. Ensure individual goals are aligned with the company’s broader objectives. Through pairing employee and employer goals, HR leaders and managers can ensure everyone’s priorities are lined up. When employees are able to see how their role fits in with the broader picture they are better positioned to adapt accordingly and understand how their behaviours directly impact the organization.
  3. Create dynamic goals which can be changed in real-time. By engaging in continuous feedback with an employee, goals can be easily adjusted on the fly to meet new challenges or demands. As we enter the post-crisis business world, this ability to adapt and evolve is essential to keep businesses on the right track.

Methods for effectively tracking goals and collating data

Using a performance management system for employees allows managers to track progress towards objectives in real-time. From this data they are able to better understand an employee’s strengths and weaknesses and make informed decisions about what goals to set in future. 

Objectives and Key Results (OKRs)

OKRs allow goals to be established at the individual, team and company-wide levels. By tracking these through a performance management system, users can quickly identify those goals which are on track to completion as well as those which are at risk of falling short of requirements. Managers can measure progress in real-time to allow for instantly addressing any problems.

Key Performance Indicators (KPIs)

KPIs can be used to track a variety of goals, and are particularly useful for monitoring progress towards the development of new skills. Such goals can be scored in a variety of ways via a performance management system so that individuals and their managers understand if they are on track to completion.

Dashboard analytics and reporting

Data gathered from both OKRs and KPIs can be analysed and displayed via customizable dashboards. These dashboards – integrated into performance management tools – allow users to gain instant insights into productivity and performance. 

This can save valuable time for HR leaders and managers, who can use analytical tools to pull together instant reports. And with employees also able to access their own objectives dashboard, alignment is guaranteed.

4. Training and development as a core element of an employee’s routine

Employee training and development begins with the establishment of their Personal Development Plan. As their role and responsibilities evolve during their time with the company, new training and opportunities to learn new skills will arise. 

Additionally, HR leaders and managers can draw upon data gathered in a performance management tool’s people database and skillsets. These help to identify strengths and weaknesses throughout the organization so that training can be directed where it is needed the most.

Subsequently, training and development can assume a variety of forms, including:

Formal education and training

This includes everything from single-day courses to full degree programs through higher education. Such training is traditional in approach and can require a great deal of commitment from the employee. In this sense, it must be based around topics closely related to his or her role, while also fitting into their broader career ambitions as outlined in their PDP.

Group learning

HR leaders and managers can use performance management tools to set up working groups to allow peer-to-peer training and development. After identifying employees with the right skill sets, they can then share these skills with individuals requiring new training. Such methods have the additional benefit of strengthening bonds between team and department members.

Assignments and planned experience

Practical experience is often the best way to learn new skills. Giving employees assignments relating to these skills helps them to gain a thorough understanding of the processes involved in a practical sense. Encouraging them to deliver detailed feedback on these assignments helps articulate an understanding above and beyond the strictly theoretical approach found with classroom learning.