The performance management guide

Assessing performance: for many companies it remains a task that often brings few noticeable results. So it appears, 66% of appraisal systems are unsuccessful. How should it be done? In this guide you'll learn all there is to know about performance management.

Contents

  1. The traditional appraisal system
  2. Innovative performance management
  3. Getting started with performance management
  4. Transparency within performance management
  5. Shift up a gear with technology

1. The traditional appraisal system

What purpose does the assessment or performance review serve?

Evaluation reviews are a reality in many organizations. Unfortunately, they are often not carried out correctly, because they have not recorded in advance what one wants to achieve with the conversation. So first ask yourself the question, what purpose does the conversation serve? From there, choose the most compatible review type.
  1. The purpose of an assessment review is to assess an employee's performance. The result of such a conversation is the basis for making decisions about, for example, wage increases.
  2. The purpose of a performance review is to discuss the development and growth of the employee. There are no consequences to this kind of conversation.

Too often an assessment review, too little a performance review

The focus on lifelong learning is increasing all the time. Training yourself as an employee and growing within your position is becoming more and more important. But employees can't do this alone. The organisation must support them in this.

In a performance review, the manager acts as a coach, there is open two-way communication and one has a clear goal for the future. Unlike the assessment review, the manager not only judges, but also listens. The open two-way communication allows them to draw up a personal development plan (PDP) together. The purpose of a performance review is therefore to inspire and support.

Keep both conversations separate

Both conversations have their place in an organization, but the danger lies in the simultaneous use. Honesty and openness is the basis of a performance review. However, when discussing whether someone deserves a pay rise during that same conversation, prevents that openess. Employees want to prove themselves and (partly unconsciously) implement impression management. They do everything in their power to leave a positive impression on their manager.

In that case, the employee will probably not be able to cite and discuss work points, for fear of not getting the pay rise. This ensures that the beneficial characteristics of the performance review, namely the development of the employee, are impeded.

Non-violent communication is key to feedback

How does non-violent communication work?

Non-violent communication was defined by Marshall B. Rosenberg and helps both the recipient and the giver of feedback. Non-violent communication states that feedback is the reflection of someone else's perception of your behaviour. When you use non-violent communication, you are aware that your perception of someone's behavior can be completely different than that person himself envisions.

When giving feedback, non-violent communication rests on the following four pillars:
  1. Observation: giving the facts, describe the behavior that a person has exhibited
  2. Feelings: tell the person what their actions have brought to you, how they have made you feel
  3. Needs: explain what you would need, what can explain your feelings
  4. Request: Be as clear and concrete as possible about what kind of behavior you would like them to adopt in the future, and formulate it as a request instead of as a requirement

Concrete application: employee who often arrives late

Being late can be an expression of many different reasons. A bad way to give feedback would be: "You're really rude because you're always late to meetings, come on time next time". This kind of incomplete feedback can ensure that the person receiving it does not feel addressed or even misunderstood at all. That's why it's important to make it clear how this behavior affects you.

A non-violent way of giving feedback is thus:"In the past month you have arrived late to 3 of our 4 meetings(observation). This made me feel that you were not interested in the scheduled meetings and it also gave me extra stress(feelings)as I had a very full agenda those days, which caused me to lose a lot of time waiting for you. It would mean a lot to me if you came on time(need). Could you arrive on time in the future or give a signal if you are late? (request)"

2. Innovative performance management

Why is performance management a better fit for a modern policy?

An appraisal review is a "formal, periodic, systematic, conscious and as objective as possible evaluation of an employee's performance". It is a method of evaluation that has been used for decades and has caused dissatisfaction for just as long.

Does a performance review do the job then? In itself it is of course a good thing that certain topics are discussed openly. However, this is too occasional. If your company wants to keep up with the rapid changes in the (digital) job market, it is not enough to hold a evaluation only on an annual or six-monthly basis. Moreover, the performance review often deals the past and thus lacks its purpose. Too little attention is still paid to ways in which individual employees can grow for the benefit of the company.

To be successful, the focus should be more on creating a good work culture and supporting lifelong learning. A good performance review system is a way to increase the attractiveness of your organisation, but a constructive evaluation process is much more than that.
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What does performance management mean?

Performance management is a powerful management tool that an organisation can implement to achieve business objectives. The mission , strategy and objectives of the organisation are systematically recorded and translated to all levels of the organisation. Critical success factors andkey performance indicators(KPIs) are then used as a measurement tool to determine where further control is needed in order to achieve the set objectives.

Assessment and performance interviews are regularly scheduled and the purpose of the interview is always carefully thought through beforehand. But the most important aspect of performance management is that these interviews are supplemented with informal and continuous feedback which gives the employees more frequent feedback and motivation.

The benefits of performance management

The goals set for an individual are directly related to the goals of the organization. This is a positive, because employees appear to be more motivated by this. Knowing that they are doing relevant work increases their commitment. Furthermore, there are many other advantages linked to working with performance management:
  1. Better financial results
  2. Higher satisfaction & engagement
  3. Better performance
  4. Reduced staff turnover

3. Get started with performance management

How do you get started with performance management? How can you implement this process in your company? Here are some tips and applications of performance management.

#1 Determine KPIs, and make those a business mentality

Your company probably has a mission,. You know where you want to go. First and foremost, try to translate that mission into key performance indicators (KPIs). Then try to make these KPIs your business mentality. As a result, your employees, as well as your customers, will associate your business with the mindset you exude.

For example, hotel chain citizenM prides itself on maximizing experience for 'the mobile traveller'. The organization focuses entirely on the needs of their target audience by combining a human approach and technology. But more importantly, new employees are immersed in the mindset of customer focus through intensive training. In that way, they are more capable of conveying what citizenM wants to stand for.

#2 Engage regularly with your employees and be involved

It is a good idea to regularly get out on the working floor, to place yourself among your employees. Find out what's going on and ask (individual) feedback. Show that performance management works in two directions. This way you are and remain fully involved with your teams. That only plays in the benefit of their growth and that of your company.

Shoe chain Torfs has been leading the top of Best Employers for years. CEO Wouter Torfs gives his teams a say and believes in honest and transparent communication. Happy employees take care of happy customers, he believes. That's why he still visits the physical stores every week. There canvasses to what extent the employees express the vision of Torfs and above all: whether they are still satisfied with their job.

#3 Give confidence and let go

Don't get us wrong: involvement doesn't mean constantly monitoring your team. As a manager, you want to give your team members confidence. So delegate tasks and let go of some situations. After all, micromanagement would only be at the expense of the performance of your employees. Are you dealing with an annoying issue yourself? Then get it out to the team. Show that open communication is the holy grail of high-performing teams. Your employees will take over this attitude automatically.

HR tech start-up Kazi believes it's essential that everyone can do his or her thing without being controlled all the time. "Every team member has already been through certain things with us that enable them to do their job independently. If you can give that confidence to your employees, you get an incredible amount in return," says founder Nikolaas Bellens.

4. Transparency within performance management

Transparency means that management and HR communicate openly about certain aspects of business operations. This can relate to objectives, remuneration, strategic decisions or operational issues. What does your company gain if you make your performance management more transparent?

Transparency increases the attractiveness of the company

It takes a lot of effort to find the right candidate. In a recent survey of 160 SMEs, we asked them about their priorities for HR in 2020. 62% indicated that recruitment and selection were at the top of that list. By setting up a transparent performance management you show potential candidates that they can grow in your company the way they want to.
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Increasing productivity is important for every HR-professional and team manager. Of course this is easier said than done, because many factors (also outside the company) can have an effect on productivity. With the following 3 tips, you can build a more transparent performance management that ensures higher productivity.

Tip 1: Align individual performance with overall company objectives
When employees understand how their performance fits in with the company's objectives, they feel more involved and place greater trust in their employer. They will also work harder when they see that they are contributing to the bottom line, and may come up with their own ideas to do better.

Tip 2: Communicate openly about the business strategy
Sometimes it is difficult for management to talk openly about the business strategy or how well the company is performing. However, research has shown that when employees are kept out of the loop, they experience this as a subtle way of rejection. As a result, they trust their bosses and colleagues less, feel less loyalty towards the company and feel less motivated to perform. What you can do is provide regular updates on current business performance and important strategic decisions.

Tip 3: Explain sensitive decisions as a team manager
Managers who are open about the decisions they make and take the time to explain the reasoning behind them will be understood more by their team members. In fact, they are perceived as more effective in their job and automatically gain more confidence in future decisions. As in the previous point, it is not necessary to explain every decision to the whole team. Communicate especially about the decisions that team members don't agree with, the ones they don't understand enough, or the ones that have drastic consequences for an individual or the functioning of the team.

Transparency increases creativity

Research indicates that transparent leadership can even enable employees to perform more creatively. People are more creative when they feel they can take risks without fear of repercussion. When leaders are open about their mistakes, challenges and emotions, it encourages their team members to do the same. This can help implement a culture of experimentation and encourages natural innovation from employees.

5. Shift up a gear with technology

The role of technology in performance management

Is performance management already implemented in your company? Then we recommend you to shift a gear higher. Because as the well-known creed says, measuring is knowing. And no better resource that can help you than technology. No more paper reports that end up in a slide: the whole performance process is digitized via performance management tooling! Result? Your employees will have easier access to their evaluation reports and will consult them more regularly. Isn't that the purpose of an impactful performance review?
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Performance Reviews in Officient

From that perspective, we from Officient have added a 'Performance Reviews' feature to our HR platform. In concrete terms, we make it easier for HR and team managers to schedule a performance review and communicate more easily about it. You can now exchange notes about the expectations of the conversation in advance and add reports to the digital employee profile afterwards.

In short: the performance review feature makes performance management more transparent. In doing zo, it allows you to work with your employees toward their growth, without paperwork.
Make the performance review more visible to executive parties.
Usually, after a performance review, a report is drawn up that serves as a working document for all parties. However, often this piece of paper is quickly put in a cupboard somewhere, so that no one can learn anything from it. Out of sight, out of mind.

Digitizing documents around the performance review.
Done with storing paper notes in a physical cabinet? In addition to the obvious ecological reasons, digitisation also ensures that you get an up-to-date overall picture. Think of comparing different reports over time or preparing a particular evaluation with important employee data such as wage history.
Make the entire process transparent to the employee.
Both the company and the employees benefit from digitally monitoring performance reviews. When employees have to search cabinets or drives to find their reports, they will be less inclined to review this document from time to time. This wil lead to them not having an overview of their actions points.