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Performance Management Process in 2023

October 9, 2021
6 Min Read
Photo by
Liliya Flis for Andersen Design

Table of Contents:

What is the performance management process?

The performance management process comprises several steps, beginning with performance planning and goal setting to performance review. The performance management process identifies the organization’s performance objectives and measures how well employees are meeting these performance objectives using formal performance plans or informal feedback. 

The performance management process (components) may be summarized as follows: 

  • Performance Planning - Employees set individual performance targets through dialogue with their manager. Performance Targets specify what the employee must do to be successful in their role.
  • Goal Setting - Employees share their performance targets with each other for peer support. Managers and employees establish specific goals and deadlines for achieving targets, and employees regularly monitor progress towards goals.
  • Performance Review - Individuals receive feedback on how they meet performance targets. Performance Review may be formal or informal.

The performance management process is vital for the performance management of an individual to improve performance, motivation and satisfaction within the organization. The performance management process should outline performance goals and provide employee activities that can lead to success in their area(s) of responsibility.

Why is the performance management process important?

Effective performance management process is an essential part of successful leadership. Without it, the chances are that the company's efforts to develop its employee will fail. The performance management process gives organizations a formal method for monitoring performance and aligning individual goals with organizational goals. When appropriately used, the performance management process also helps employees feel engaged in their work, accountable for their roles, and committed to achieving future measurable results.

Employees need feedback on how they are doing so they can grow as individuals within your organization. If you do not have a productivity review process in place already, start implementing one right away so that every employee knows what types of behaviors you expect from them and how well (or poorly) they are meeting those expectations.

The most important benefit of effective performance management processes is that they help employees understand what it takes to meet organizational goals. When everyone in an organization knows how their work contributes to the company’s overall success, there is a much greater chance that they will feel accountable for adhering to established rules and regulations. In this way, performance management processes can also have a positive impact on your company's culture.

In addition to tracking employee's performance, managers receive regular feedback from every employee, allowing them a complete picture of each person in their charge. This helps managers handle performance issues promptly so that they do not become larger problems in the future. It also gives them opportunities for coaching and training where individual employees need additional support to improve their performance. Without a continuous performance management process, managers may spend so much time trying to solve problems independently that they have little time left to guide in other areas.

Performance management process steps

The steps involved in an effective performance management process should be carefully considered when creating the system. The process will vary by individual company needs. However, some general elements may be beneficial for all organizations to follow:

  1. Improve job fit through open communication between managers and employees about roles, goals, expectations, and career paths.
  2. Regularly discuss current employee performance throughout the year rather than just once or twice per year at evaluation time. This improves satisfaction because it allows employees to get feedback more frequently than just at review time. Schedule conversations around key events such as significant successes or specific work projects so progress can be measured.
  3. Evaluate employee performance as a "formal" process at the end of the performance year, not at various points throughout the year. This allows for more accurate results and reduces bias from a single conversation about a project or a more extended period of time.
  4. Give feedback on employee development, unique needs and styles so they can apply it in an effective manner rather than just parrot back what is said. Managers should focus on behavior rather than personality traits to ensure feedback is specific enough to improve employee performance.
  5. Plan out the team's strategic goal and objective that aligns with the company objectives, so everyone understands how their role contributes to the organization's goals as a whole.

The performance management system provides an efficient way to improve performance and address obstacles that may inhibit an organization's effectiveness. The key to obtaining these benefits is to perform the process throughout the year consistently, so it is not just an annual event at the end of the year. Using a systemized approach, managers can provide regular feedback and discuss goals on an as-needed basis throughout the year rather than waiting until evaluation time.

Performance management process tips for teams

Performance management technique is especially effective when performed as a team. An organization with a skilled and professional workforce will have employees who may be required to work together at some time or another throughout the year.

  • Ensure all necessary information is available by completing self-evaluation and providing supporting evidence such as past performance evaluations, emails, and written documentation of work projects. This will make evaluating employee performance much more efficient since managers won't spend too much time gathering necessary data from different sources during limited review periods.
  • Designate team roles and responsibilities early on in order to streamline the process and ensure everyone understands what they're responsible for at any given time. Assigning tasks based on strengths allows for better focus by the individual and better team performance in general.
  • Discuss expectations for evaluations in a timely manner, preferably in person, to make feedback more personal. Suppose a team member feels comfortable approaching their teammates individually about performance issues before going directly to their manager. In that case, it can be incredibly beneficial to have an open discussion about good performance later on.
  • Allow employees to provide input on the performance review process - whether through surveys or otherwise - so they feel like their system is being implemented with them rather than something from "on high" that they have no control over whatsoever. This will help foster trust between coworkers and hopefully reduce feelings of alienation within the group over time.

The performance management process for remote teams

Many of the same principles still apply when a performance management process is being conducted for a remote team. Managers can choose to use any of the myriads of performance management tools available. However, there are some extra hurdles to overcome since teams aren't in the same location and may not have consistent interactions or work projects to monitor.

One of the biggest challenges with remote employees is that it can be difficult for managers to provide regular performance feedback without seeing their employees face-to-face, so managers may have to develop creative ways to work around this problem. Below are some performance management processes every manager should try out.

  • Use a video conferencing system such as Skype to conduct performance reviews. This will allow for easy feedback and conversation while still maintaining a high level of professionalism.
  • Have employees conduct performance reviews on their own through email or written documentation. This way, managers don't have to do all of the legwork themselves, but it can be time-consuming for remote employees to put together performance documents without any verbal guidance from their manager (or even without knowing what performance objectives were established at the beginning of the year).
  • Establish performance review checkpoints throughout the year instead of performing one major evaluation right before performance management periods end. These checkpoints will allow for more flexible feedback between team members and promote accountability throughout the organization.
  • Make sure that individual employees feel like they have a voice for ongoing projects and leave room for their input rather than making arbitrary decisions about exactly how things need to be run without any input from them whatsoever. This will help foster trust between team members and hopefully make up for the lack of face-to-face interaction through daily video calls or occasional get-togethers at conventions or other workforce gatherings around the company.
  • Conduct performance evaluations regularly rather than just once or twice per year to monitor performance over time. Since employees are only seen physically at the beginning of their employment, ongoing performance evaluation is critical to letting them know what they need to improve and providing them with continuous feedback. This is essential as it allows them to brush up on any aspects of their performance that may be lacking so they can excel even further after some time has elapsed.
  • Use performance management metrics to help monitor performance over time and give employees a sense of what is expected from them in order for them to hit the goals necessary for the organization to flourish. 

This can provide them with a written record of performance expectations as well as set a path for reaching those milestones even if they are located at a different location. This can be helpful during performance evaluations and when setting long-term goals that may include moving into new roles or different branches throughout the company as their performance warrants it.

  • Reward performance when it reaches the company standards and goal rather than waiting until performance review time comes around for employees to know what is expected. This will help provide an incentive for performance improvement throughout the year rather than stagnating or worsening due to a lack of appropriate feedback.
  • Ensure that all performance evaluations are done fairly rather than basing ratings off of personal feelings towards an employee, even if their performance is lackluster by company standards. This is important to make sure that performance ratings reflect performance rather than bias playing too large of a role in performance evaluation, leading to problems down the road with employees who feel like they are being treated unfairly due to favoritism.

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