When it comes to running a business, business leaders, HR teams, and managers alike aim to keep employees engaged and satisfied on the jobs they are in. Knowing this is the easy part, but knowing how to make it a reality can be the difficult part. A performance management plan is one way that organisations can promote employee engagement and achieve organisational and individual goals.
In this article, we will answer “why is performance management important?” as well as look at how to create a performance management plan for employees.
Performance management is a continuous process whereby an organisation sets individual and team goals that align with the overall business goals. Once these goals have been set, employees also gain access to a performance plan to reach the goals, means to assess progress, and the resources to develop their knowledge, skills, and abilities.
When you hear the term ‘performance management’, you may immediately think of an annual review process. It’s key to understand that performance management isn’t a one-and-done type of activity. It's an ongoing and consistent effort to support employees year-round on their quest to achieve personal and business goals - afterall during the annual review, there should be no surprises!
A performance improvement plan is a useful process for everyone involved. It aims to align both short-term and long-term goals of both individuals within an organisation and the organisation on the whole.
Performance management can be used to breed a company culture that values constant learning and development opportunities. When employees know what is expected of them, they are better able to manage and meet expectations.
Beyond meeting goals, a solid performance management plan will also support employee engagement and boost motivation levels. This is because it’s based on how things can be done, rather than simply focusing on outcomes. In this sense, a performance management plan can be viewed as a tool that supports employees with their professional needs.
Speaking of employee support, it should be considered a priority year-round, not just once a year. Many companies rely on an annual review to assess an employee’s performance, which is fraught with issues.
For one, employees probably won’t remember exactly how they felt or performed for the entire past year (nor does a manager) Additionally, if an annual review takes place when an employee is going through a lot (either within the workplace or in their personal life), then their judgement and responses will be skewed.
Any constructive criticism then could be the cause of overwhelm, anxiety, frustration, or prompt the urge to give up rather than adjust accordingly.
Instead, a focus on continuous improvement and consistent engagement can create a more agile, engaged, and productive workforce. Employees are met with recommendations for improvement on a steady basis instead of a push to shift gears all at once.
Employees also benefit from an open door for communication whenever they need something, rather than bringing all issues or needs up at once.
A good way to understand employees’ real-time mood and surrounding factors that affect it is to use an employee wellbeing platform. This way, employees can check-in with themselves through expert-designed assessments. Management and HR teams can gain insights and proactively provide resources to teams and departments that may need extra support.
Within a work environment, it’s very easy to fall into a habit and routine without taking a step back and seeing the big picture. This way of working is what contributes to the feeling of being ‘stuck on the hamster wheel’ – where your team will feel like they are running and repeatedly doing the same things, but getting nowhere.
Performance management is the means by which an organisation’s management team can take stock to make sure that employees’ tasks align with company goals.
This will not only help the company achieve its goals, but it will also give employees the insight they need to understand why they are being asked to do what they do and remind them of the value of their contribution to the organisation’s success. A little like the man on the moon story: when President John F. Kennedy visited NASA, he asked a janitor walking through the hallway what he did for NASA. He responded with, “I’m helping put a man on the moon.” Everyone in an organisation has a purpose and their ability to recognise this purpose and be recognised for their work is pivotal in how they perform and view themselves.
This connection between employee tasks and company goals promotes employee engagement as they have a sense of value, purpose, and understanding of the why behind their work.
Knowing all of this, you may now be wondering how to develop a performance improvement plan.
To do so effectively, follow these steps:
Pro Tip:
While employees are striving to do their best, you’ll want to make sure that they have what they need to overcome challenges, proactively prepare and accept change, and sustain their own mental wellbeing.
An employee wellbeing tool offers a solution to develop team member’s mental fitness and help both companies and the people within them to thrive.
An employee wellbeing platform can contribute to the effectiveness of a performance management plan because employees gain access to resources that promote the development of a growth mindset. It also allows them to take part in guided exercises, and can ultimately program the subconscious mind to become one’s best and most effective self.
As you can see, the way to develop a performance management plan consists of many broad steps. To narrow your vision and achieve optimal results, consider the following:
When you set objectives, communicate how employees will be evaluated against them. Two common ways to do so include measuring results (based on standards, benchmarks, and set objectives) and measuring actions/behaviours (measured through performance dimensions, or how an employee demonstrates values in the process of their work).
Remember that if you choose an outcome-based measurement, it could end up being counterproductive because it doesn’t address how or what an employee needs to reach their potential.
Professional development plans can be created to define what skills are needed to become a master in any respective position as well as understand what an employee wishes to accomplish in their own professional career. This way, organisations can support employees’ visions.
Don’t rely on an annual review, but rather check-in on progress regularly (as explained above).
One of the main steps of a performance management plan is to monitor how your team is doing. What exactly is the most effective way to do so?
There are many methods to choose from. Managers can set weekly check-ins. HR teams can send out employee surveys. You can even use software to track and report performance. However, these methods tend to all focus on outcomes rather than productivity and real-time updates.
When you get bogged down in outcomes, you miss the most important thing - how people are doing rather than what they are doing.
Hence, many companies are shifting into the realm of employee wellbeing tools. These platforms are focused on mental wellbeing and provide insights to both employees and organisational leaders as to how employees are faring on a regular basis.
Rather than solely focusing on completing tasks, companies can provide customized support where and when it’s needed. These platforms are geared around human potential, rather than outcomes. So, you can consistently support people in becoming their best selves, which results in improved productivity, deeper engagement levels, and increased job satisfaction.
Within a performance improvement plan, there are two types of reviewing that needs to be done. The first type is reviewing an employee’s progress and accomplishments. The second type is to review the overall management system with a forward-looking outlook rather than solely reviewing what has already been done in the past.
Leadership and management that focuses on what is yet to come can invigorate employees with a sense of excitement, even when they are being asked to make adjustments to how they’ve been working in the past. This type of forward-looking approach opens the door to opportunities for employees to improve upon their own performance and develop themselves.
Since performance management is a continuous process, how do you know when to close a performance improvement plan (PIP) for a specific employee?
The plan should be created with an expiration or end date. At this time, management will review the plan and assess whether or not an employee met his or her goals. If they did, then it’s a great opportunity to reward said employee for a job well done and consider the next steps (or future PIP).
If the goals have yet to be met, it’s worth a discussion to extend the plan and find out if resources are needed to do so.
This brings up a very important point, however. When an organisation is solely outcome-driven, there’s risk for great loss. It could be the case that an employee was lacking what they needed to succeed in the first place and while their potential to do the job well exists, they fell short because of uncontrollable factors.
Or, perhaps, they were dealing with a lot mentally and weren’t equipped with the psychological skills they needed to get the job done. Again, we bring this up because it’s of great value and importance to focus on organisational goals while also focusing on the mental fitness and emotional wellbeing of your team members.
A wellbeing platform can be used to help employees develop mental fitness as it provides resources and educational journeys geared towards strengthening resilience.
To engage your workforce and work towards achieving individual and company goals, keep in mind the following key elements for performance management:
Setting goals is a crucial and primary step. Be sure to share with employees why their goals are set as such and how they are important to the overall bigger picture. This can help lead employees to care about their tasks more because they know how their job matters.
Communication is another key within the workplace. Management teams should prioritise keeping employees in the loop of what’s happening within the company and their role so that they don’t feel left out. This also includes providing timely and honest feedback.
While a performance improvement plan can come to a close, an employee’s learning and development opportunities should be endless. Share ways for your team members to advance and continue to reach higher goals.
Share your appreciation of employees consistently with employee rewards and recognition. When people feel valued, tehya re more inclined to try their best.
Employee performance is a result of many variables. A performance management plan can be used to align your team member’s goals with organisational goals, and just like ‘the man on the moon’ story, it helps keep a line of sight between what the employee contributes to overall.
While implementing and effectively executing a performance management plan, it is worthwhile to also prioritise employee mental fitness and wellbeing. This way, your team can be mentally equipped to take on challenges, receive constructive feedback, monitor their own growth (professionally and mentally), and be motivated to improve on a regular basis.
To find out how LUME can help your organisation to better understand and support the mental health of your employees, just fill in the form and we’ll be in touch.
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