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The Importance of Performance Management in Business
A substantial part of the success that a business sees involves implementing a plan for employee growth and development. This may include quarterly or annual reviews, real-time updates and check-ins, and team meetings.
However, have you ever really wondered: What is performance management, and why is it so important for the progression of a company and their employees?
What is Performance Management?
According to Berkley at The University of California, performance management is considered: “Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization. The communication process includes clarifying expectations, setting objectives, identifying goals, providing feedback, and reviewing results.”
What is key to note is that performance management takes place on an ongoing basis that is not solely limited to an annual review. It requires thoughtful and innovative procedures and processes that help management effectively oversee, analyze, reward, and provide constructive feedback for employees to continue to navigate to higher roles within the organization – and even enhance skills within their personal lives.
Why is Performance Management a Necessary Component for Professional Success?
While we could go on and on listing the advantages of performance management, we outlined some of the most significant reasons below:
- Catch Errors, Issues, or Other Problems When They Arise (Rather Than Being Too Late): As a manager or superior within your company, it’s important to keep track of the progress your team is making in their respective roles and as a group together. Many companies use a combination of technology and advanced software, as well as one-on-one and team meetings, to monitor the performance of their team. One of the common practices that companies use are consistent reviews for employees and project management systems, where employees track their tasks, deadlines, notes, and results.
- Help Your Human Resources Team Out: The Human Resources Department of a company is an essential part for growing the company to new levels of success. Performance management helps HR identify and implement processes and programs that can assist employees in their professional development. In addition, it allows management to identify any missing skillsets that are necessary for a team to achieve results and relay that to HR, so that HR can work on hiring for that specific skill set.
- Give Credit Where Credit is Due and Feedback Where Feedback is Needed: There is no doubt that employees tend to work harder and are more motivated when there is room for acknowledgment, growth, raises, and other types of rewards for reaching and exceeding the goals that were set for them. Sometimes, a simple “Fantastic Job!” from a manager is just what an employee needs to keep the passion they have for their role and for the company as a whole. On the other hand, constructive criticism is also a necessary component of performance management. If an employee is not performing up to standards, it is crucial for managers to speak with the employee and find promising ways to overcome these obstacles and allow them to do their jobs up to par.
- Let Your Employees Know You Are Listening and Value Their Opinions: Employees want to feel valued. They want to know that their managers are listening to their opinions, ideas, feedback, and so forth. Performance management accomplishes this by providing employees the chance to give management feedback, just as it allows management to give employees feedback.
- Boost Performance for Both Individuals as Professionals and as a Full Team Together: Performance management helps employees feel invested and appreciated because management and employees work together to determine goals and objectives for the individual professional to aim for, in addition to bigger goals and objectives that the team can collaborate together to reach.
- Morale, Morale, Morale: We cannot stress this enough. Morale is a critical part if a company wants to retain employees and continue to hire exceptional talent. Management MUST clearly state the objectives and goals for the company – whether it is based on a specific project, a three-year growth plan, or any timeframe of their choice. This allows employees to fully understand what needs to be done to accomplish these set expectations from superiors in the company.
Why Should You Put Performance Management as a Priority for Your Employees and Company?
If you want to continue to grow your team, promote employees to higher-level positions, retain talented professionals, gain new clients, boost revenue, and climb that ladder toward success, performance management is your answer.
By setting goals and consistently reviewing the progress of the team is a vital part of being in management for a company. When targets are hit as expected, a team feels accomplished and rewarded. When targets are missed, a team learns what went wrong and how to fix it for the next project or goal.