This document will outline the new Performance Management System. This briefing note will explain what a performance management system is, the main components of a good performance management system, the link between motivation and performance as well as other information regarding performance management.
What is Performance Management?
Performance Management is a tool to ensure that line managers effectively manage and develop their employees in-line with organisational objectives and goals.
Performance management is a method for line managers to communicate with their employees informing them:
• what is expected of the employee
• how the employee will be rewarded
• how the employee should deliver results
• what results the organisation is looking for on a business wide scale
• hot the employee will be developed
Performance management is a key component of an organisations approach to managing employees.
How does Performance Management align with business objectives?
Whilst there is no universal agreement as to what constitutes performance management, there are characteristics that are generally present, they include:
• It aims to improve organisational, divisional, departmental and individual performance
• It aims to link business objectives and goals to divisional,departmental and individual objectives and goals
• It evaluates organisational, divisional, departmental and individual performance, identifying needs for performance improvement and developing new performance objectives
• It incorporates job design, recruitment al selection, training and development, career planning and compensation and benefits, along with the Performance review.
The purpose of Performance Management is to enable and encourage employees by meeting their own objectives which are aligned with the business objectives. It helps promote a highly competent workforce by encouraging employee to meet their full potential.
As you know meeting business objectives is essential to the survival of the business and these need to be communicated down to employees. Objectives should be stretching to put us in the best competitive position and need to be measured, reviewed and monitored.
Employee objectives should be SMARTS (Specific, Measurable, Achievable, Realistic, Timely and Stretching). The employee should agree to the objectives when they are set out in their performance review, as well as line managers setting objectives the employee should also be given the chance to think of their own objectives, this way you empower the employee and they will feel motivated to complete the objectives and therefore help the company meet its own objectives.
What makes up Performance Management?
An effective Performance Management System has many components, for our business the important ones are;
• Performance Planning: This is done by both the line manage and the employee at the beginning of the year (in our case the November performance review), this will outline objectives and expected behaviours for the next 12 months. It will also include any areas of performance that need improvement. These areas will then be agreed between the line manager and the employee.
• Performance Appraisal and Reviewing:It is proposed that reviews are performed twice a year, one in November reviewing the previous year and planning for the next year. There will also be a review in May reviewing the employees performance so far and ensuring objectives are still relevant and meet the business needs. There should be an 80/20 rule with the employee 80% of the time and the line manager talking 20% of the time, this should be asking questions of the employee so that the employee can review their own performance. During the performance the line manager should spend 40% of the time looking back on the...