Organizations are waking up to the need for ongoing performance management instead of the regular annual performance appraisal system. Annual review or appraisal is a one-time system for assessing the performance of an employee in any organization. In comparison, ongoing performance management is a continuous process of an employee’s evaluation. HR managers today are more and more in favour of replacing the annual performance management with the going system of performance method. Understanding the relevance of performance management, HR managers are specialising themselves in the field by completing performance management certification.
Many companies want to retain annual performance management as it provides a summary of the employees’ performance throughout the year however since ongoing performance management has several merits they want to introduce it as well. In such cases, they want to have a combination of both forms of assessments. By this method, the annual review is complemented by the learnings derived from the ongoing performance management process.
Pool of Continuous Feedback for Employees
The biggest benefit of an ongoing performance management process lies in the constant information provided to the employee about his performance. No one likes surprises at the time of a final evaluation when nothing can be done about the situation. Ongoing reviews give employees a peek into their own performance as well as others view about how they are doing in a regular manner. It also makes it possible to make desired changes in one’s shortcomings and see the result of that in real-time rather than wait for another year.
Improves Employee Performance
Companies benefit from the improved performance of the employee workforce. They also gain from not having to subject their employees with bad surprises towards the end of the year as employees are constantly aware of their own progress. A research done by TriNet and Wakefield Research concluded that 62% people felt completely blindsided by their annual appraisal results and 59% of the employees felt that the managers were not able to give them proper feedback.
Through regular feedback, performance gaps are filled quickly before they become gaping holes. It is easier to deal with small corrections rather than big ones that can accumulate over a period of time.
Improves the Quality of Feedback
The lack of a manager’s ability to give feedback comes from the absence of a proper method of recording the performance of the team members on an ongoing basis. Ongoing performance management solves this problem. It allows the team managers to record performance conversations so that at the end of the year they remember what happened all around the year and not just snippets of what transpired in the last few weeks or days.
Continuously assessing the performance of the employees can have several more benefits for the company. It makes it easier to track the performance in a detailed manner. It will make it a part of everyday life and the company will not have to spend extra time at the end of the year on this activity as is the case with annual review.
Facilitates Transparency in the Organization
Any employee will want full transparency in their assessment. It helps them trust their organization and make relevant improvements in their work. It also makes them feel good about their organization. They last longer in the company and say positive things about the organization to others, which further improves a company’s chances of hiring good talent.
Clear Career Path for Employees
Employees are also clearer about their career progression within the company as they now have clear roles, clear objectives and a fair idea of how they are performing. They can focus on the career path they want to have and accordingly work on improvement areas.
More Engagement with Managers
Ongoing performance management gives the employees an opportunity to have a sincere one on one discussion with their managers on a frequent basis. This is an opportunity which employees do not get otherwise due to the busy work routine. They get to build a meaningful rapport with their manager and get feedback for self-improvement. In this way, a good manager and employee relationship can be harnessed which can make the work environment positive and full of energy. As employees end up spending most of their time at work, it is necessary to build positivity in the work area to get the maximum performance out of them.
Human beings work better in an environment of synergy. This synergy is built between the organization and the employee only when regular efforts are made. Ongoing performance management gives the right environment for building an effective workforce. To bring about this change from the current annual performance management process to a continuous ongoing one, the companies need to bring about a deep change in their workings.
Is HRMS a technology or a database to store data?
Is it a tool to make life easier for the HR practitioner or a repository of all employee related information? It is all of these, and much more. It is actually a decision that can change how you do business, and transform the culture within your organization. Most people underestimate the power of HR Management Systems and tend to reduce it to becoming just a small tool for data collation. When you undertake an actual course in human resource management, you are able to assess the true impact of what HRMS can do for your business.
Here is a glimpse of why your business needs one –
Ensures that tactical elements are done– A good HRMS makes sure that all your tactical business needs are taken care of, which essentially frees up your time to work on strategic goals. The people and processes related to them, form the biggest chunk of data. Implementing the processes, and tracking them is a crucial but tedious and repetitive. HRMS ensures that your time, as a business owner or even an HR practitioner is not involved in those.
Allows for effective workforce optimization – Businesses are always working on how to use the time of their employees effectively. This usually means staffing them in the right way so that their capabilities and expertise are used fully. HRMS helps you understand all of this information in one place – the employee’s expertise areas, current projects, performance background, time availability and so on. This will enable your business to ensure that each individual is working at his or her optimal capacity and contributing to the overall business goals.
Empowers employees to take onus – Many HRMS platforms allow the employees to make key changes or additions to their details. They are able to review their own performance and fill out the self-appraisal form. They are also able to share what they believe they want to be trained on given their developmental gaps. So HRMS not only frees up HR’s time, it also empowers employees to take onus of some of the processes that apply to them directly. This is a huge benefit because it creates a culture of accountability and self-sufficiency. Employee self-service is increasingly becoming important especially with the onset of even HR Chatbots. If you have an efficient HRMS in place, it can provide you with a big advantage and make you a forerunner in that trend.
Reduced number of errors – There is a high or medium degree of error that can take place when human intervention is involved entirely or in the whole process. The margin of error is reduced when the processes are automated. Several processes which can possibly have errors that can cause a big impact on business such as incorrect pay calculations, proper tracking of leaves taken and so on, are taken care of and that can result in cost savings as well. So HRMS has a huge impact on the business’s bottom line as well.
Decreased dependency on a large HR function – The HR function is absolutely essential for an organization. But there are several aspects of the function, which can be managed by fewer resources or people, if an HRMS is in place. Those that you have as HR employees can then be better utilized for more specific business-centric people activities. Those kinds of roles will also be in line with the career aspirations of these employees. Not only HR, the IT team can also be reduced significantly and the staff that is present can do better quality work. Many of the processes like payroll, which a large number of small businesses tend to outsource, can be managed internally. That will result in yet more savings in terms of the cost incurred, by hiring a vendor and managing the relationship.
Remotely accessible – You do not need to be in office to access the system. HRMS contains all the data, provides the connections between various people processes and gives you the scope to use analytics very effectively for decision making. The big advantage is that you can access it from anywhere, instead of having to plan a meeting with your entire HR team to get the data. So as a leader, the people related data is on your fingertips and if you apply basic or even advanced analytics principles, you can quicken your decision making process. Your decisions can also be more data-backed. At the click of a button you can work on spreadsheets that can help you identify which resource to mobilize, which department is incurring the highest training cost or which business unit might have a requirement for new skills and hence needs a hiring budget.
The above are some major reasons for businesses to have an HR Management system. It truly adds value to the business by making a difference in the way the organization functions.