Performance
7
min read
Performance management is an inevitable strategy that helps organizations measure each employee's contribution, productivity levels, development opportunities, and focus of action. It is also a crucial tool to evaluate the energy, drive, and engagement of a team.
The right performance management system helps managers provide additional support to the staff, decide on a staff's training requirements, and determine pay hikes/cuts. It also allows them to assign additional responsibilities to the person based on his actual performance metrics and results.
Importance of Having a Performance Management System
An organization needs clear performance metrics to evaluate its growth and development over time. A spreadsheet alone doesn’t meet the purpose when you grow beyond five or ten employees.
Without a proper performance management system, managers often feel uncomfortable confronting employees’ demands and justifying organizational decisions. As a result, managers tend to ignore recognizing high-performers and potential talents when operations become unmanageable. New and inexperienced managers may also lack the judgemental and analytical skills to evaluate employees correctly.
HR managers, on the other hand, find it difficult to coordinate people management processes with inaccurate data resulting in interpersonal conflicts and poor team performance.
When employees do not feel valued and rewarded, employees start quitting their jobs.
Organizations that spend time and effort to track employee performance, provide them with adequate support and guidance to keep them motivated and productive throughout. This appraisal process lets both the employee and manager compare expectations and reality.
Furthermore, a competent manager can utilize a performance management system to encourage employees to meet their performance expectations and goals frequently and keep them focused on their roles and responsibilities.
Quick Read: Check out this step-by-step article to learn everything you need to know about measuring and managing employee performance — from goals and reviews to ratings and development.
But how to understand when you need to implement a performance management system in your organization? Or, even more importantly, do you know if your current performance management platform needs to be updated or changed?
This article will help you take action before it is too late.
9 early signs you need a performance management system
#1 - Your company is headed towards hypergrowth
Initially, a start-up often has four or five employees who share multiple responsibilities to reduce the cost of operations. It is not the case with an established business or a company heading towards hyper-growth.
As you expand, you need to specify roles and responsibilities to each individual, monitor their work, review the output, work on the marketing and sales side, focus on the development and sustainability, and build networks and relations. You cannot oversee every operation and do it all alone. You need to delegate tasks and automate processes to ensure consistency and result.
Solution: That is when you know you can leverage a performance management system to streamline operations by setting delivery expectations, creating organizational alignment and enabling timely documentation of performance and workflows.
Quick Read — Check out this guide on developing a Continuous Performance Management process in your organization. Click here to download the PDF
#2 - You find it difficult to retain high-performers and top talent
It is a competitive world where employees are aware of the global work culture and organizational processes. Today’s employees look forward to growing mutually with the organization where they are valued, listened to, and recognized.
In such a time, you must enable a system where you are able to measure and recognize individual and team performance instead of just focusing on the output and financial results. Being indifferent to continuous performance improvement and feedback needs of employees may lead to quick attrition, microaggression at the workplace, disengagement and lack of commitment from your employees.
Solution: The right performance management system eliminates the systematic barriers to high performance leading to timely recognition, reduced employee turnover and enhanced team performance.
#3 – Low employee motivation and productivity
When employees feel unappreciated and know that they can get away by doing the bare minimum — their productivity dips and motivation dwindles.
Moreover, when the manager fails to set clear goals and performance expectations, employees keep on asking what to do next. Without a performance management system, a majority of the employees chase deadlines instead of goals. They do not understand the importance of their contribution or do not have a great picture of the whole process.
Solution: A performance management system helps employees understand their responsibilities and roles fully by creating organizational goal alignment. It records everything they contribute and do and gives them performance nudges throughout the week to keep them productive. It automates the performance analysis and review process and helps in timely recognition and rewards.
On the other hand, it helps managers assign the right employees for the right task and facilitate team collaboration to counter low productivity and motivation.
#4 – You find it difficult to streamline HR activities
A performance management system is an HR tool in its core sense. Without a system, an HR manager finds it difficult to acknowledge employee feedback, understand their demands, and provide a solution to employee disengagement.
The general issues faced by an HR manager without having a proper performance management tool are —
- Unable to trace the performance history of employees
- Completely dependent on the line manager’s comments which are often subjective and prone to biases
- Find it difficult to understand training requirements
- Placing inappropriate performance goals against employee capabilities
- Not able to build employee-manager rapport
- Unable to retain employees and attract potential talent
Solution: An effective performance management system helps streamline HR activities by suggesting timely rewards and recognition programs. Furthermore, it also enables the manager to communicate clearly with the employees on the expected results vs. actual performance. Thus, helping HR managers understand employee learning and training requirements — personalizing the HR process for each employee.
#5 – Your current performance management system is inefficient
A poor performance management system could be more dangerous to your organization’s growth than not having a system in place as it does not guarantee data accuracy, traceability, open communication, and evaluation metrics. Some of the critical issues are:
- Inconsistent and unorganized data
- Lack of accuracy
- Weakened HR policies
- Non-compliance
- Resource wastage
- Dissatisfied employees
- Lack of traceability
- Unclear performance goals and objectives
This leads to biased decision-making and feedback based on incorrect data and analytics reports, resulting in employee-manager conflicts and inconsistent performance issues.
Solution: The solution is to implement a proper performance management system that’s efficient and suits your specific needs.
Pro-tip — Book a free demo today to see how SuperBeings can help you align goals and boost employee performance. Or check out this 8 point checklist on what to look for while choosing the right performance management tool for your business.
#6 – Your company is unable to attract potential talents
21st century employees — millennials and gen Z — look forward to career advancements and growth. They are not satisfied with a good salary package alone. They seek value-addition, clear career advancement, freedom and flexibility, incentives and perks, and recognition and appreciation.
When an organization fails to implement an effective performance management system, the attitude and disengagement of the existing employees influences the joining and retention of new talents.
Solution: On the other hand, a performance management tool helps the HR manager to describe the workflow, expectations, company policies, and procedures clearly during the interview process. Having a clear and communicable strategy will attract new candidates and motivate them to stay in the organization with a big picture in mind.
In short, a performance management system helps organizations to;
- Attract potential talents
- Lay-out a detailed career plan
- Set clear expectations
- Point out policies and procedures for raises and perks
- Detail them about promotions and growth
- Improve workplace interpersonal relationships
A performance management system outlines and automates the whole employee management process more convincingly than hundreds of excel sheets and paper files.
#7 - Your performance review process is inconsistent
Old-fashioned annual appraisals are no longer considered efficient and effective in organizations as it usually boils down to judgments made by a manager without having proper evidence to support them. The drawbacks of traditional performance management processes are as follows —
- It does not facilitate continuous feedback and frequent check-ins
- Creates fear-based employee mindset instead of growth-based
- It can be biased and unfair
- Primarily driven by subjective opinion instead of objective data
- Spreadsheets and paper files often get misplaced
- Performance history cannot be traced easily
Solution: A good performance management system is a continuous process that offers traceability and fairness. It delivers a 360-degree analysis of the employee performance throughout this life cycle. In addition to the consistency it provides in the appraisal process, it standardizes the process across the organization.
#8 - New managers lack analytical skills and experience
To establish their potential and skill sets in the new organization to prove themselves, new managers try to use unconventional methods or practices to manage people and make common leadership mistakes.
The limited experience and skillsets force new managers to perform appraisals with the support of other supervisors or deputies. They do not often try to collect data by themselves but depend on others’ inputs — causing unfairness and inaccuracy.
Solution: A good performance management system provides templates for all crucial 1:1 and team meetings, allowing new managers to complete performance review without hassles. They only need to follow the instructions and procedure.
Performance management tools also train managers on understanding people analytics helping them preempt attrition and operational risks and build better employee-manager relationships.
#9 - It is hard for you to align everyone towards a common goal
Another negative impact of not having a performance tracking system is that you manage the performance metrics incorrectly and employees miss the bigger picture. Managers also struggle to guide the employees in the same direction and reiterate the importance of achieving the organizational goals and objectives.
Employees and managers start to contradict and conflict arises when there is a mismatch in the performance expectations against actual results.
Solution: Implementing a performance management system to streamline the entire people management process and restructure the policies and practices is the first step that creates organizational alignment. With OKRs, frequent performance check-ins, and continuous feedback — it becomes easier to make sure everyone in the organization is rowing in the same direction at all times.
For any growing organization, employees are its biggest asset. And optimizing employee performance is the first step towards building a company that lasts decades. Book a free demo with SuperBeings today to unlock the hidden performance potential of your people.
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