Performance management systems: a beginner’s guide.
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How to implement the most effective performance management systems.
As I shared in last month’s issue, performance management systems are used for more than just evaluating your employee upon previously defined goals. They’re a great tool for making sure you’re building a universe within your organization that allows employees to live up to their true potential. As discussed in last month’s issue:
- Performance management is like scouting for a soccer team. You need to find the right players and place them in the right positions so they have higher chances of winning.
- A good performance management system starts with clear job descriptions and ends with exit interviews.
- Some benefits of implementing one of these systems: morale boosts, clear career paths, and better employee retention.
- Performance management systems are a two-way street. You empower your people to achieve better results while compensating them according to their contributions.
- Systems eat your “gut feelings” for breakfast. Performance evaluations are inevitably biased. Instead, basing evaluations on results assures a fair process.
- If you don’t have the time to implement a performance management system, these four things might help you objectively assess your employees’ performance without implementing formal processes: hire the right people for your business, set clear expectations, take mental note of their strengths and weaknesses, and give regular and timely feedback.
You’re all caught up now. Let’s begin!
While systems have different names and techniques, they’re all intended to build an environment that allows employees to perform toward an objective. If you want to start implementing them in your business, try one of these popular systems:
Management by objectives (MBO)
This concept was first introduced by Peter Drucker in his 1954 book “The Practice of Management.” As the name implies, this is a system that allows employees to create goals together with management to improve their performance and engagement.
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According to the website Perform Yard, “Having employees offer input on goals and action plans is a way to encourage higher performance and commitment.”
The process starts when the organization gets together to define specific goals for the year. Then, departments and individuals define their own unique goals that help achieve macro predefined goals.
This way, all employees will be doing something meaningful that will actually be reflected in the company’s results. The magic of this type of system is that it works when everyone is aware and included in the goal-setting process.
However, not everything about this system is perfect. Some people believe it has a big flaw in practice since management might choose unrealistic goals as a way to quantify employees’ input and outcomes. Psychologist Harry Levinson explains that “unit managers are forced to commit to goals they don’t believe are realistic. An obsession with objectivity and quantitative measures means that quality is neglected.”
He’s not the only one who thinks there’s an obsession with impossible goals in the corporate world. This tweet by Aaron Patterson demonstrates the frustration it can cause:
“It took me three years to get a GC compactor to even work”
“Yes, but what’s important is what you did last quarter”
“Literally nobody has ever accomplished this”
“Sure, but you need to do it in a quarter”
— Aaron Patterson (@tenderlove) October 12, 2019.
However, as productivity and learning expert, Scott H. Young once told us in a previous issue, “If the goal becomes something you perceive to be impossible — if you think ‘I can’t do this’ — you reject the goal, and you don’t actually work on it. It just fails to function as an orienting device.”
Read the complete issue at ProductiveGrowth.
DISCOVER
There are hundreds of apps that help you store information, but little to none help you process your thoughts. Napkin is an interface that, according to co-founder Fabian Wittel, “complements the brain in its fuzzy and highly networked structure.” It allows you to create notes and connect them together to help you be more creative. Download the beta version here.
