7 steps to effective performance management that boosts productivity

It’s a well-known phenomenon that the traditional performance review neither help employees to develop nor businesses to grow. Recent research from Deloitte showed that 58% of companies thinks that their current performance management process is a waste of time.

Following on from the research conducted Deloitte itself made a big move to move away from the tedious annual performance review.

Due to the nature of reviews, it might be valuable to share some steps you can take to make your performance management processes useful and effective to increase productivity and engagement.

1. Simplify the process

Adoption is the key to successful feedback processes. You miss out a lot of feedback between people if your tools don’t allow simple usage. This leaves you without sufficient data to help your people in their development. Make your process as simple as possible to get people doing it. Ignore the advanced features in performance management software, rather focus on an easy way to enable feedback interaction between co-workers. Making use of mobile technology is a great way to achieve this.

2. Use performance management to build skills

Focus on implementing flexible performance conversations aimed at providing employees at all levels with practical steps they can take in order to improve themselves. Ask yourself what skills are necessary for each person to succeed in their job. It’s no secret that developing these skills will directly increase the performance of your organization. Communicate these skills clearly and make the performance and long-term development visible to identify and discuss opportunities for improvement.

3. Plan regular 1-on-1 meetings

Periodical “informal” performance conversations are a very effective way to increase engagement and performance of employees. Schedule regular 1-on-1 meetings between managers and individual team members. Use the feedback the employee received and the documented progress as input for the conversation. To get most out of the meetings it’s recommended to dedicate a meeting to specific skills, formulate action steps to realize improvement and reflect the results during the following meeting. Finally, these meetings are a powerful way to bring feedback and your performance management processes to life in your organization.

4. Set clear development goals

Formulating specific goals helps employees to focus. There are several tools that allow you to set both development goals as well as business goals. Help employees to formulate specific goals with a clear way to measure the outcome. This creates purpose and transparency. Most often development goals are set on a quarterly base.

5. Teach managers to give better feedback

Managers often fail to give useful feedback to employees. This leads to employees being left behind clueless rather than that it drives their performance. We often hear two reasons for that. Managers lack insights in the skills and performance of their team and secondly that they are never been taught how and when to give feedback. Enable your management to drive the performance of their teams by teaching them how to deal with feedback and provide them with tools like Impraise to gain insights in the skills, performance and coaching needs of their teams.

6. Decouple compensation and development

In order to stimulate honest and useful feedback between peers, development should be separate from compensation. Consider finding other metrics for compensation, for instance how difficult it would be to replace this person in the company. Another example is to reward coaching based on how much a person contributes to learning and development of other people and the organization. Besides, find ways how to reward your people without regarding money by offering growth opportunities.

7. Coach everyone and stimulate peer coaching

Show everyone how they contribute to organizational success and make sure all your people know what it takes to reach the next level. Hold everyone accountable, but help them to develop and provide coaching and training to support.

There are tools like Impraise that allow peers to coach each other by providing feedback. At an organizational level you can stimulate a culture of knowledge sharing by clearly communicating the benefits. Reward those who are actively coaching others and provide simple tools to identify coaching needs.

Not sure where to start, read our 2019 Guide to Modern Performance Management to find the right process for you.

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