Most organizations have a type of Performance Management System, but are they up-to-date? Are they benefiting the company in both the short term and the long term goals set? Surprisingly for many organizations, the answer is no. A Performance Management System (PM System) is defined as a continuous process of, identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization.
A PM System involves setting goals and objectives, observing employee performance, and also giving and receiving ongoing coaching and feedback. This means that to have a PM system that is going to benefit the organization, providing annual reviews to employees is not sufficient. Management needs to provide feedback on a regular basis. Providing feedback once a quarter is a wonderful start. Technology has given organizations the opportunity to have an easy to use and user-friendly system that allows managers to keep track of the items discussed and add any comments from the employee. To be in alignment with the organization’s strategic goals, the manager must ensure that the employee’s activities are in harmony with the goals also help the organization gain a moderate advantage.
There are many advantages to having a PM System. Employee motivation and self-esteem are increased. Managers can gain insight to their subordinates. This will allow managers to build a better relationship with the employee. Employees will become more competent and will be more successful by having developmental plans in place. Any administrative actions become more fair and appropriate. The information can be used to determine pay raises, promotions, bonuses, transfers, as well as terminations. The data collected will also provide proof of compliance with regulations with state and federal laws.
When an organization has an ill implemented PM system, there are consequences such as increased turnover, wasted time and money, employee job burnout and dissatisfaction, and increased risk for lawsuits. Increases in turnover mean more money spent on recruiting new hires. Managers’ waste time filling out paperwork and since performance management systems cost valuable time and money; no one benefits from a poorly designed system.
Without an ideal PM System, an organization is open to so many consequences that can become factors in why they are unable to attain the goals set. HR Managers should take time to evaluate and update their PM System to ensure that it is benefiting the organization and make changes when necessary.
Braathe Enterprises Inc.