The Importance Of Performance Management
By Arijana Koskarova for Forbes
The core of a company’s purpose is to make revenues and bring in profits. Revenues are made by the human capital that works in the company. Employees bring customers, and clients stay loyal because of your employees.
Since so much hinges on your employees, you need to ask yourself how you can make your employees feel fulfilled, valued and happy in their workplace. Partly, you can do this by giving them clear directions on how they can grow and how their future will look in the company. But, let’s dive even deeper. For someone to grow, they need to show good performance, and they need to have access to the necessary training.
So, after breaking down the structure of why companies exist, what is the most important process in the company? I think the answer is performance management.
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Without having performance management implemented in the organization, you won’t be able to give clear feedback. Your employees won’t know what is expected from them, how their performance will be measured or what they need to achieve in order to move to the next level.
I find it is often the most difficult process to implement because staff can resent your approach. Imagine a company where until now, nobody was under review and suddenly everybody’s promotion, bonuses and work is on the line.
But as managers, we have to understand that our job is to focus on the strategy and innovation of the company, not daily micromanaging of the team. An established performance management process in place will show everyone what is expected from them on a daily level—their KPI’s and how are they broken down on milestones. Employees ultimately appreciate knowing exactly what they need to do on a weekly level so that they stay on track and in, say, six months get their bonus incentive or a good grade on a performance appraisal that will open up opportunities for them to apply to the next level.
Furthermore, performance management is directly connected with the incentive/discipline process. For the good employees, you can introduce a merit reward system; for the ones that are slowing down on their performance, you can develop a disciplined process including concrete action plans that will help them improve.
In this way, you won’t be stuck with low performers, and you won’t have demotivated high performers because you will have a system in place.
Evaluating the performance of your employees is the first and most important system that you have to develop in your organization. It starts with acceptance and training of the management and then it escalates down to the entire organization. Every lead, supervisor or assistant manager should be well trained on how you are evaluating the team so that your company doesn’t end up with a pile of complaints from the HR Department.
More important is that everyone understands that this process is crucial and beneficial for them since it can give them a clear picture of their performance based on their KPI’s and the effort that they have put in.
This is why I recommend you emphasize performance management, for it is the most important system any CEO can have in the organization—no matter how big or small.
