Performance management – they are two of the most dreaded words in the workplace. They conjure up images of impersonal annual performance reviews where leaders do nothing but focus on what someone did wrong. The good news is that performance management is changing and, today, it’s very different from what it once was. Of course, for leaders, managers, and decision-makers, it is important to understand what has changed. Below, we’ll explore some of the most important factors in modern performance management.

Key Factors in Modern Performance Management

Know Your Philosophy

Company culture has become incredibly important. However, it’s easy to get it wrong. Before you focus on performance management for employees, it’s important to take a look at your corporate culture. Is your company’s philosophy firmly embedded here? Is your culture rooted in your organization’s ethics? If not, it’s time to do some work on the organization before you think about coaching employees on improvement. Often, a change in culture can have a massive ripple effect that improves the performance of all employees.

Ditch the Review

The annual or twice per year performance review has been a hallmark of performance management almost from the beginning. However, it’s time to let it die. It has officially outlived its usefulness (if it ever really had any). Today, you should focus on regular check-ins with your team members rather than pointing out once per year what they’ve been doing wrong. Why is that?

It’s common sense. What do you think is going to do more good – course correction provided in a compassionate, ongoing manner, or a critical assessment of your mistakes when it’s too late to make changes? You cannot go back and change things you’ve done, so annual assessments come across as punitive, rather than constructive. As a manager or leader, it’s your job to build people up and encourage them to do better. Regular check-ins do that much better than annual reviews.

Focus on Accuracy, Fairness, and Support

With many performance management systems, the focus is on improvement through punitive methods. An employee is “coached” for making mistakes. Team members see lower or no raises if they don’t measure up to whatever yardstick is being used. Often, those yardsticks are subjective, which leaves little room for real growth and development.

Instead, instigate a system that is based on accuracy, fairness, and providing support for employees, rather than punishment. Lose the stick and use the carrot only. Understand that most employees do want to do a good job, but they may need help, support, and guidance in getting to the point where they can do that.

Lose the Rating System

Some companies rate their employees’ performance. That’s demoralizing at best. At worst, it commoditizes your team. They are not Amazon purchases to be rated and reviewed. As a manager or leader, you must build them up, guide them in the areas where they need improvement, and recognize when they are doing well. Rating systems don’t do that. If you insist on maintaining that antiquated system, consider integrating it via check-ins and verbalizing their rating, rather than giving them some abstract numerical rating.

Create a System That Elevates Performance

With traditional performance management, the focus was always on measuring performance-based on lower limits. It was about meeting minimal requirements. If you do X, you get Y. Understand that this sort of system is designed to reward minimal effort, not to elevate performance. Instead, you need to connect an individual employee’s performance with strategic goals and initiatives within the company. Eliminate meaningless minimal milestones. Create a culture that focuses on employees taking responsibility for their performance.

Think Long and Hard about the Compensation Connection

In the past, performance management was linked directly to compensation. If you passed the assessment, you received a raise. If you didn’t, you receive a smaller amount or even no raise at all. However, these are the outliers in most instances. No company has employees that fall neatly across such a curve. Instead, make your compensation changes commensurate with increases to the cost of living and focus on performance improvements in other ways.

Get Them Engaged

Is your team underperforming? It might have nothing to do with them and everything to do with their level of engagement. What does that mean, though? Are they enthusiastic about their work? Are they passionate about reaching company goals? Do they care deeply about what they do daily? If not, there’s a good chance they’re going to underperform and no amount of “coaching” is going to break them out of the rut.

So, how do you get your employees engaged and stoke their passions? Focus on things like building trust and ensuring transparency within the organization. Get your employees more connected with the organization. Build a stronger, more positive company culture. Make them a part of things by integrating their efforts with organizational goals.

Give Recognition Where Recognition Is Due

Want to improve your employees’ performance? Focus on what they’re doing right. Recognize them for their efforts. Reward them for doing things well. It doesn’t have to be a monetary reward, either. Something as simple as a little public praise can go a very long way toward motivating an employee to strive for even better performance.

Use Meaningful Metrics

Performance management is nothing if you’re not able to measure employee performance levels and changes in those levels over time. Make sure that you’re using meaningful metrics here. These will vary from organization to organization, and there is no one-size-fits-all approach that will work. You also need to ensure that your employees know what metrics are being used and that they understand how their performance is being measured.

In Conclusion

As you can see, modern performance management differs dramatically from what has come before. It is focused on support, encouragement, and improvement, rather than on punitive outcomes that punish employees. It’s using the carrot and avoiding the stick to ensure a stronger, more stable organization and to help your team members grow and develop professionally.

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