When I talk to employers about their performance management system, many of them will tell me that they have yearly appraisals for their employees. Often, when I dig into what this involves, I hear about the annual review. That’s it.
A performance management system is about so much more than just the yearly appraisal. It is a system of actively managing each employee’s performance throughout their career with your company. It involves really getting to know each individual’s strengths and figuring out how to maximize their potential. It is about creating a system of career development that will continually challenge the employee, motivate them towards success, and create a dynamic work environment.
A performance management system needs to support, and is in turn supported by, the overall business plan for the company. Perhaps you have created departmental plans. If so, that is great! Have you cascaded the plans down to each person in the company? Plugging each person into a specific spot in your plan will give them a chance to contribute to that goal intentionally. Your plan should also identify processes that could be simplified or done with more efficiency. It should have measurable goals for each person, and done correctly, a good business plan will create a significant increase in communication between departments.
Next, take a look at your current performance appraisal process. How is it managed? Keep the 3 D’s in mind:
The first is Good Direction. Do your employees know where you need them to go? Have you communicated their specific part of the business plan to them, and created those measureable objectives? Do they know what their strengths are, and how they can be maximized? Are you providing support in terms of the right training, work experiences or equipment? Do they have a mentor?
The second D is Good Data. Tracking results is critical to assessing performance. You need to have measurable objectives for each individual, AND ensure there is a tracking mechanism in place to capture data that is relevant. This allows for course corrections on the fly, in real time.
The third D is Good Discussions. Please, I implore you… Do not wait for the annual review to have a conversation with your employees. Discussions should be happening on a regular basis. Again, think it terms of course corrections. It is much easier to change on the fly than to wait for the next annual performance meeting. Don’t “save up” all of the information for the annual review when you can share that in real time.
At the end of the performance cycle, the annual appraisal should be very matter of fact. It should contain no surprises, as you have been having on-going conversations throughout the year. Three things should happen in the annual review: Celebrate successes, share weaknesses (with suggestions for improvement) and finally, work TOGETHER on charting a course for the next business cycle! Try this system in your company and see what happens!
