Everything You Need to Know About HR Performance Management

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Performance management is on the verge of a huge change. The old systems of the past, in which performance targets were set once a year and reviewed during the year-end review, are beginning to die. Companies are realizing that these systems generate a lot of work and are not tied to employee commitment and performance. In fact, they often require employees and managers to set year-round goals that atrophy in the months between the actual review and the setting of goals - they can also demotivate employees if they feel the process is threatening or irrelevant to them.
That's why we're on the verge of a major change in performance management - making it modern, appealing and transparent - that is related to many other changes in the way employees are managed and exposed to learning in a digitally transformed world. To fully understand it, consider the following:

What is performance management?

Performance management is the continuous process of communication between managers and employees with the common goal of achieving the strategic goals of the organization. It is the foundation for employee performance and engagement in any organization that wants its employees to reach their maximum potential and increase productivity and success.
The process, which often combines both oral and written components, takes place throughout the year and usually results in an annual performance review. This entire communication process involves defining clear specific expectations, setting objectives, setting targets, providing ongoing feedback and reviewing results.
Next-generation performance management is not about setting annual goals, but rather personalized goals for employees that change as dynamically as the business. Not only does this fit with the dynamic changes in the business environment, it also gives employees real-time feedback on their performance so they can correct themselves and have a sense of achievement (just like using a fitness tracker).

Steps to HR Performance Management

In general, the concept of performance management is a cycle consisting of three main elements:

Activity planning
Preparation in advance is crucial. The first step is to set goals and objectives that employees want to achieve and that mark the desired state they want to be in. Each individual's goal should support and be aligned with the organization's goals, and the more detailed the performance planning, the better the chances of achieving the goals. This helps employees understand how and what they should spend their time on and how they can divide their efforts between special tasks and workplace tasks. Once this step has been successfully completed, both employees and managers should be clear about the timeframe, the expected outcome and how success will be measured.

Performance coaching
The main purpose of this step is to provide regular feedback on performance throughout the year while providing guidance and support and coaching employees to modify their performance and move more if necessary. Each individual employee is different - they may be working on different tasks, mastering different skills and need support in other areas. Therefore, managers must be aware of the different needs of employees and coach them in a way that suits their personal needs. This step is extremely important to empower employees to have an encouraging dialogue with employees and to take advantage of their success.

Performance review
Here the employees receive feedback. The feedback should include both recognition of the employee's strengths and a discussion of the challenges that require improvement and more coaching. Once this is done, new plans for further development can be made. These plans should also be clear and measurable, and in fact they are the beginning of the whole process again.
Note that the next generation system focuses on real-time feedback on performance. Rather than linking the performance discussion to the compensation discussion and doing this annually (missing the opportunity to give employees the ability to reflect performance in real time, correct the course, and review daily what is required of them) - next generation systems provide real-time feedback.

How can managers successfully manage this process?
As you can see, the process of performance management is quite long and has many elements that need to be addressed. In addition, it must be performed simultaneously with every single employee in the organization, each with different individual goals and characteristics. Therefore, especially in large organizations, this process may require the use of a platform that supports the process and helps managers to manage and operate it from start to finish. HR performance management systems enable managers to track and monitor the performance of individual employees, departments and the entire organization.

What should you look for in the HR performance management platform?
The segments of the Performance Management Platform form the framework within which employers and employees work. Each component has its own purpose, and together they form the structure that ensures that employees receive the keys they need to understand and achieve their goals.
When choosing your performance management software or platform, you want to make sure that these key components are taken into account:

Clear measurements
Depending on the specific role, the ongoing missions and the current position in the employee's journey, each employee should receive his or her own performance indicators (so-called KPIs). Providing clear, customized metrics is essential to understand the manager's expectations and essential for the manager to keep track of the employee's results and performance. Personalization is very important because the goals must be relevant to the specific employee to ensure employee engagement.

Tools for engagement
A successful performance management system should combine performance improvement and employee engagement to ensure that employees are committed to development and progress. There are many ways to create engagement. For example, look at how Microsoft has used gamification to improve the performance and engagement of its call center agents.

Knowledge
Employees should acquire the skills and knowledge required to do their jobs and achieve their goals as expected, and this can be confirmed through learning and development activities. Ideally, learning (daily micro-learning) should be integrated into the system.

Feedback & Recognition
Recognition is important for performance management, as it is an integral part of the employee's emotional perception of his or her work and serves as an important driving force. You want your employees to be focused with an intrinsic motivation that lasts, not on the vanity of winning a prize.

Analytics
For performance management to be effective, managers must be provided with accurate data according to well-defined metrics. They should be able to view the data at any time so that they can set the right goals for success. Performance management software should analyze and support managers in their reasoning and evaluation of the employee.

Overall, we must remember that HR performance management is a communication process between employers and employees and is essential to the prosperity and growth of any organization. In order to do it properly, performance management systems can support managers and make the process easier and much more successful. When choosing a platform as such, managers should consider its components and ensure that it contains the key components that make this cycle the most communicative, efficient and successful.

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