Performance management is a purposeful strategy for evaluating and improving employee performance. Human resources teams are usually responsible for creating and facilitating performance management strategies. That means HR is responsible for putting together a process that is repeatable, fair, effective, and easy enough for everyone to use. Performance management also needs to ensure that employees’ goals align with organizational goals — and that they are empowered to achieve them.
But unfortunately, performance management statistics show that businesses could be doing a much better job with it. Over 50% of employees say their managers aren’t getting reviews right, and Gallup research shows that nearly half of employees say expectations at work aren’t clear.
With performance management planning, you can set the stage for an effective performance management strategy and help everyone meet their goals. Find out more about the benefits of performance planning and how to put a system in place at your company.Did you know half of employees say work expectations aren’t clear? Clear up the confusion with #PerformanceManagement planning:
What is Performance Management Planning?
Performance management planning is when companies create a strategy to ensure organizational and individual goals are met. It’s the process of setting goals and other performance expectations for employees and then creating a plan to meet those goals. A performance management plan maps out goal deadlines, sets a feedback schedule, and anticipates what kinds of support employees might need.
Performance management planning includes:
- Evaluating current performance
- Setting new goals and expectations
- Allocating resources like budget, additional training, or software tools
- Monitoring goal progress
- Giving feedback and making goal adjustments if necessary
- Assessing performance after goals are complete
What is the Performance Management Planning Process?
Performance management that works is no accident — strategies that work can thank solid processes. These five steps are part of a solid process for making performance management plans.
1. Set SMART Goals
“Employers need to set clear expectations for performance reviews. Well in advance of the evaluation process, make sure that employees understand how their performance will be evaluated. This includes categories of evaluation and metrics for goals. Mini check-ins throughout the year should help employees feel less stressed, better prepared, and able to grow more from the process.” - Niki Jorgensen, Insperity via Forbes
First, define what employees are working toward with a goal-setting conversation. SMART goals in performance management are an effective way to approach setting goals. The acronym stands for:
Specific and measurable goals ensure that expectations are clear and goal progress can be tracked. SMART goals are attainable or achievable rather than unrealistic or out of reach. They serve a current need and are in line with the most up-to-date business objectives, and their deadlines will be prompt.
2. Develop a Performance Plan
After SMART goals are set, managers and employees work together to create a performance plan that outlines the actions, resources, and timelines needed for employees to achieve those goals.
3. Monitor and Evaluate Progress
Goal tracking and performance check-ins help employees stay on track with their goals and keep managers in the loop about how they’re doing. They also tell managers if goals need to be adjusted or if their direct reports need additional support.
4. Provide Feedback and Coaching
Continuous feedback and coaching prevent a situation where employees work toward their goals without guidance or assistance. Coaching doesn’t just help employees achieve their goals — it also helps them improve their performance and grow their skills as they go and gives managers the chance to share their expertise and recognize employees’ strengths.
5. Review Performance and Adjust the Plan
Performance reviews are an integral part of performance plans. Regular reviews allow organizations to see if goals are regularly being met or if employees tend to fall short. On an individual level, reviews establish employees’ performance history, including their goal achievement records. Regular reviews can show whether or not performance management plans helped the employee achieve their goals.
Flexibility is key when it comes to performance management planning, whether goals aren’t being met or employees are knocking them out of the park. You may need to revise goals, change one-on-one cadence, increase resources, or make other adjustments to your original performance plan. The important part is that your choices are informed by what the data shows.
What are the Benefits of Performance Planning?
Performance planning is an excellent way to enhance your company’s employee performance management strategy and overall talent management strategy. These are six of the biggest benefits of performance management planning:
- Improved performance and productivity
- Alignment with organizational goals
- Employee engagement and motivation
- Clear communication and expectations
- Identification of strengths and areas for improvement
- Employee development and career advancement
The performance planning process is collaborative, giving employees the opportunity to take an active part in their work and career development with goal-setting. It’s also an opportunity for managers to nurture employees’ strengths and motivate their growth to encourage better performance and productivity.
Aligning individual and company goals helps employees see the impact of their work. For lots of people, this is highly motivating — they don’t have to wonder if their work matters or if their contributions are directly tied to business success. Manager support, clear expectations, and regular feedback and performance appraisals all boost employee engagement to create thriving employees.
Who Uses Performance Planning?
“Organizations need best-practice performance management at the business level with processes to flexibly reassess and direct targets, effective performance management at the individual level to dynamically communicate and track those targets, and seamless connectivity between the two”. - via McKinsey
Performance planning is used by organizations of all sizes, from small startups to large corporations, and across industries. HR team, managers, and supervisors are largely responsible for implementing and managing the planning process. Ultimately, performance planning is a collaborative effort that involves everyone in the organization, from top-level executives to entry-level employees.
How do You Implement a Performance Management Planning System?
It’s important to lay a strong foundation for your performance management planning system before fully implementing the new process. Here are five steps to take for successful implementation:
1. Define Your Organization's Goals
Before you can create a performance management plan, you need to know your organization's goals so employee goals can line up. Determine the top priorities and key performance indicators (KPIs) that are important to your organization.
2. Define Roles and Performance Expectations
Once you have identified your organization's goals, you can then define the job responsibilities and expectations for each role in your organization, including the specific tasks, skills, and behaviors that are required for success. This ensures employees in this role set goals that are within the scope of the role.
3. Establish an Evaluation Process
Decide how employees will be formally evaluated in their roles and how many formal reviews they’ll receive per year, in addition to informal feedback. Ensure employees in equivalent roles are evaluated on the same criteria.
4. Train Managers and Employees
Ensure everyone knows a new system will be implemented before making these major process changes. Train managers and employees on how the new performance management planning system will work prior to using it.
5. Review and Adjust the System as Needed
Don’t just set it and forget it — follow up with everyday users to ensure your planning system is effective and efficient. Be sure to act on employee feedback or risk losing buy-in on the new system.
Support Performance Management Planning with Software
Performance management planning is only effective if you stick to the process you created. The easiest way to do that is by using performance management software to handle the entire process. Choose a performance management system that can help your organization manage the ins and outs of performance management planning, including:
- Tools for setting, aligning, and monitoring goals
- Performance review tools, including template libraries and automatic review cycles
- 1:1 workspaces for employee-manager communication
Performance management plans take time to put in place, but the payoff is more than worth it. Plus, after your organization puts an employee performance management solution in place, begins its cadence of regular reviews, and sees the results of giving regular evaluations, asking for feedback, and setting clear goals, you’ll wonder why you didn’t start using software years ago.
Performance management processes don’t have to be complicated with the best performance management software. Get a fully-equipped platform with everything you need for performance planning and management — sign up for a demo of ClearCompany today.