To enjoy the remarkable benefits of performance management in your organisation, it is essential to apply a tailored approach, which includes adopting performance management frameworks. There is no one-size-fits-all method, as what works for other companies may not work for you.
In this article, we discuss an overview of three significant performance management frameworks and six effective strategies for successful performance management.
Three Key Performance Management Frameworks for HR Managers
HR managers are tasked with optimising employee performance to drive organisational success. To achieve this, implementing effective performance management frameworks is essential. Here are three key frameworks that can guide your approach:
- Management by Objectives: In this framework, managers set objectives based on overarching business goals. They communicate these objectives to the employees, who are then monitored to ensure they work to achieve them. Afterwards, the managers evaluate each staff member in an employee appraisal system and reward those who meet the objectives. This is a framework that removes all the fluff and focuses more on the objectives. However, it doesn’t delve into the steps required to achieve these objectives. The Management by Objectives method can also lead to micromanagement, and employees may feel pressured or watched.
- Objectives & Key Results (OKRs): OKRs are a refined version of the Management by Objectives framework. The intent was to create a framework that allowed objectives to be defined while also developing a quantifiable and acceptable strategy for accomplishing them. In OKRs, employees can set their own goals and take responsibility for those goals. The major benefit of the OKR framework is that it encourages employee participation, collaboration, and feedback. There is also more autonomy since employees know exactly what paths to take to achieve the overall aim.
- Balanced Scorecard (BSC): Created in the 90s, the Balanced Scorecard evaluates a company’s performance by looking at four critical areas: Financial, Customer, Process, and Organisational Capacity (or People). For instance, Jane is the manager of the department store. Traditionally, her manager would only look at her profit-and-loss numbers to decide whether she was a good or a terrible manager. However, with a BSC system, Jane’s manager would look at Jane’s relations with customers and colleagues. He will also have to evaluate what processes Jane uses to scale roadblocks. Did she miss an obvious opportunity to save the store money? Were they wasteful? These are the factors BSC includes to give a holistic view of an employee’s performance.
Keep in mind that the performance management framework you choose for your organisation largely depends on the structure of your business. In summary, if your business values synergy and alignment across the entire organisation, you can opt for the OKR or Balance Scorecard method. If synergy is not a prerequisite or if your organisation comprises semi-independent departments, you can use the straightforward MBO to create departmental objectives.
Top Six Strategies for Effective Performance Management
If you’re a line manager and HR professional, you’ll find that managing employee performance is a large part of your responsibility.
While many believe that a solid business strategy is the most important for a company’s success, actualising the business strategy will require that your business has an effective performance management system in place. Here are the top 6 strategies to adopt for effective performance management.
- Communicate company objectives and define performance expectations: Communicating the company’s objectives and performance expectations helps the employees know just what is expected of them. Organisational goals can often seem quite big and sometimes far removed from the employee’s daily job responsibilities. However, managers can help employees contribute their quota to the company’s objectives by translating it to goals and objectives for the department and then cascading it into individual-level goals.
- Create a culture of regular check-ins and constant feedback: Having regular check-ins to discuss results on set goals and share feedback on performance is essential so that employees know when they are doing well so they can do even better, and are informed about the aspects they need to improve on. It is also a way for managers to get feedback from direct reports and understand or identify any challenges they may be experiencing in getting their work done.
- Introduce 360-degree appraisals: Unlike regular performance reviews where only the manager appraises the employee, 360-degree appraisal collects feedback about the employee from different angles: from their manager, coworkers, subordinates, and even their clients if they work in a client-facing role. 360-degree appraisals help to give a more rounded view of the employee.
- Acknowledge exceptional achievements: Make it a point to acknowledge (and where possible, reward) individuals who have exceeded expectations to show that their hard work has not been going unnoticed and encourage the rest of the team to strive to do better.
- Prioritise employee training and development: Effective performance management systems should include technical and behavioural evaluation of employees to determine their current proficiency level. It should also allow for the development of an action plan or personal development plan to bridge any gaps that may exist.
- Using performance management software: Implementing an effective performance management system ultimately leads to improved results from team members, which eventually translates to better organisational performance.
Using software like SeamlessPerformance – built by SeamlessHR can simplify your performance management process, making it easier to share review forms, set 360 degree appraisals, track individual goals, and set up and remind stakeholders about scheduled reviews and check-ins.
SeamlessHR has a simple interface that makes it easy to use for managers and direct reports alike, making the entire performance management process a truly seamless one.
