If you can’t measure it, you can’t manage it!

This is the basic premise of performance management in any organisation. How else would an organisation identify between the top and poor performers? How else the hard-working and smart employees would make themselves stand out for their efforts? How else can the organisation train bottom performers to do better work?

While performance management has always been under the scanner for its traditional practices, the other side of the coin inclines in its favour. Here are some advantages it brings to organisations.

Advantages of Performance Management:

Set Goals

Like a sailor needs a compass for direction, an employee needs goals to work towards the organisation’s vision. Goal setting is the first exercise in the overall performance management process. When key responsibility areas are in place, it becomes easier to evaluate the performance delivered by the employee.

Motivate Employees

Performance management is a motivation booster since it gives opportunities to employees to receive applauds for their efforts. Most organisations have a reward and recognition program through which they give cash bonuses, incentives, certificates or public ovation to deserving candidates. As a result, it not only boosts the morale of top-performing employees, but also gives motivation to the bottom performers to prove themselves.

Staff Development

All fingers are not the same. Some people excel, some lag behind. Performance management helps organisations to identify the skill gaps and train employees accordingly to get the best output. Even if employees are performing well, they may need enhanced skills to advance their careers. Performance management addresses all such concerns related to staff development.

Learning and Development (L&D) is a crucial branch of people management on which you can dig out more information through human resources courses online.

Create Sense of Fairness

Unlike the popular myth that performance management is a biased exercise, it tends to promote an atmosphere of equality in the organisation. Performance management is the way to communicate to employees that everyone stands at an equal level for the organisation and there is no secrecy about rewarding well-performing candidates.

Handle Firing Risks

The employees who have been consistently underperforming in spite of continuous training and mentoring at some point in time require being eliminated. Or else, their presence can hamper the productivity of the organisation and lower the morale of other employees. Performance management enables organisations to document an employee’s performance so that ‘firing’ situations can be tackled with empathy. It allows terminating the relationship without any ill feelings.

Performance management is a highly specialized field of human resources. It is recommended that you do the strategic performance management certification course to give an edge to your career profile.

Achieving the organizational goals effectively depends upon the efficiency of the organization’s human resource. Thus, recruiting suitable human resources is important. The responsibility of this function lies with the human resource management team.  Getting the right people into the organization is crucial because the progress of the company depends largely upon the performance of its employees; especially, their ability to work under demanding conditions to deliver quality output.

Regular monitoring and evaluation of employee performance are critical for the profitability and success of the organization. This responsibility again lies with the HR and senior managers. It is vital to carry out these assessments as they not only measure performance but also assess the employee’s level of job satisfaction and his interest in the task. If the employees are not content, their overall productivity may be affected.

Performance management is a process of managing manpower whereby HR and senior managers work with employees to set and review their targets in alignment with the organizational goals. Though the process does involve annual performance reviews, in essence, it is an ongoing process throughout the year, whereby managers keep track of the employee performance and provide guidance and feedback to improve their performance. Strategic performance management tools are also utilized to aid the process.

Performance management is applicable to all the employees irrespective of their position in the organization. In a survey of around 3000 organizations, it was found that tools like KPI (key performance indicators) and performance appraisal charts are considered to be close to 80% successful in evaluation. More than measuring the performance, these tools aim at building better workforce relationships and improving decision-making capabilities with the help of performance-driven conversations.

However, a survey states that around 53% of employers don’t track improved performance records. This can lower employee motivation. This is despite an 8.9% greater profitability which has been observed after tracking and appraising the employee performance.

Various online HR certification courses and human resource management courses aim at providing an insight into performance management for aiding correct human resource evaluation and talent assessment. Business managers acquire tremendous benefit from HRM training and certificate programs. Performance management requires a consistent approach because employees feel encouraged and a source reveals that 69% employees feel more dedicated towards the organization and close to 92% of employees perceive the feedback positively if given in an appropriate manner.

Before implementing any performance management process it is mandatory to understand the HR practices of the organization in order to align the performance review process with it. Other important requirements are detailed job descriptions at the time of hiring, employee supervision while working, good training practices and a conducive work environment for comprehensive performance management process results.

In essence, performance management would turn out to be more effective if competent role-based policies are laid out and a structural and comprehensive tool is devised to include at least six to seven employee performance parameters. This will certainly help in reducing attrition rates and keeping the right people in the company.

Learn to craft effective strategies to resolve performance challenges with the Strategic Performance Management course from XLRI. Fill in your details for a call back with more information on the course.

More Information:

Guidelines For Formulating A Career In HR

How to Find Human Resources Job Opportunities?

Scope and Opportunity in Human Resource Management in India

How to grow your career in Human Resource Management in 2022?