Employee performance management is a strategic approach to evaluating and enhancing individual performance to unlock their full potential. Since employees are the backbone of any organisation, their success directly impacts the company’s ability to achieve its goals. Employee performance management offers a structured framework to monitor, assess, and nurture employee performance, ensuring both personal growth and organisational success.
At OneAdvanced, we support organisations with employee performance management through our comprehensive People Management suite. Our tools are designed to enable performance, measure outcomes, and foster engagement by facilitating open, productive conversations between employees and managers, tracking progress, and identifying areas for improvement. We enable them to cultivate a high-performing culture that drives success.
Employee performance management process
Employee performance management process includes five fundamental steps: planning, monitoring, reviewing, developing, and rewarding. When all these five components work together and support each other, it results in a successful performance management process. Let’s understand each step in detail!
1. Planning
Planning is the foundational step of employee performance management process. It involves setting clear goals and expectations for both teams and individual employees, ensuring their efforts align with the organisation’s overarching objectives. Adopting SMART framework is a prudent approach for establishing goals in the planning stage. It ensures that goals are Specific, Measurable, Achievable, Relevant, and Time-bound.
2. Monitoring
The next step in the employee performance management process is monitoring. It involves the continual assessment of assignments, projects, and overall employee progress. Consistent monitoring enables both employees and managers to understand where performance stands in relation to established standards. It allows them to recognise achievements, identify areas of concern, and collaboratively strategise improvements where needed.
3. Reviewing
Reviewing employee performance involves a formal assessment of an individual’s performance compared to their predefined goals and standards. The aim is to evaluate how well employees meet expectations and to provide them with constructive feedback and recognition. Our AI-assistant feedback tool, Performance and talent, combines technology with human insights to ensure feedback messages are clear and empathetic to employees.
4. Developing
Developing stage includes giving employees opportunities to learn and grow. Some common methods for developing employees include:
- Training and workshops: These are formal structured learning activities that focus on specific skills or knowledge areas.
- Mentorship programs: Pairing employees with more experienced colleagues who can provide guidance and support.
- Job rotations: Moving employees to different roles or departments to gain exposure to new skills and responsibilities.
- Feedback and coaching: Regularly providing constructive feedback and coaching sessions to help employees improve their performance.
5. Rewarding
A successful employee performance management can’t be achieved without an effective rewarding process. By acknowledging employees’ efforts and achievements, you not only boost their morale but also encourage them to maintain a high level of performance. It fosters a culture of recognition and motivation within the organisations, driving excellence and teamwork.
Rewards can be categorised into two types: formal and informal. Informal rewards, such as verbal recognition or small tokens of appreciation, should be integrated into your organisation’s daily practices. On the other hand, formal rewards, governed by structured policies, provide additional opportunities to celebrate performance. These may include monetary incentives such as bonuses, salary increases, or other tangible benefits.
Also Read: 8 Factors to consider when managing performance
Examples of effective employee performance management
Morton Fraser’s journey to development-driven approach
Morton Fraser, one of Scotland’s leading law firms, embarked on a remarkable transformation in employee performance management with the help of our Performance & Talent software. Recognising that their traditional, review-focused methods were outdated and unproductive, we enabled the company to shift towards a more continuous, development-driven approach through our software. By implementing short-term goals, flexible objectives, and transitioning away from bonus-centric discussions, we helped the firm to place greater emphasis on employee growth and meaningful conversations.
Read the full case study here.
Transforming performance management at Bath & North East Somerset Council
Another outstanding example of effective employee performance management comes from Bath & North East Somerset Council. Responsible for delivering over 800 diverse services, ranging from planning to waste management, the council recognised the need to streamline its approach to managing the performance of its 4,000 employees.
The introduction of Performance & Talent from OneAdvanced proved to be a game-changer. With its intuitive design and seamless integration with familiar tools like Outlook and Teams, the system offered a centralised solution for scheduling, communication, and performance reviews. This approach not only simplified processes but also ensured accessibility, even for team members with limited technical expertise.
Read the full story here!
AG Barr fostered continuous performance development
AG Barr, the renowned maker of iconic Scottish soft drinks like IRN-BRU, revamped its employee performance management approach during the Covid-19 pandemic by adopting OneAdvanced’s Performance & Talent platform. With a workforce of nearly 900 employees spread across diverse functions, the company recognised the need for a system that supported continuous performance development, especially during the transition to remote working.
Replacing the outdated annual appraisals, our software enabled managers to set short-term, agile objectives that could be regularly reviewed and updated, fostering motivation and adaptability. This centralised system standardised the employee performance management processes across the business, allowing them to engage more effectively and boosting overall job satisfaction.
Also Read: Top 9 performance management tools to maximise productivity
Importance of effective EPM for business success
Having an effective employee performance management process in place is crucial for the success of your employees and business as a whole. Here are some key reasons why investing in EPM is a must for you:
1. Identifies areas for improvement
Regular performance reviews – one of the key steps in the EPM process – help managers identify areas where employees can improve. They can track employees progress and understand where they need support. They can then provide targeted resources, such as training programs or mentoring opportunities, to get the best out of employees.
2. Supports stressed employees
Our 2023 Performance Management Report reveals that 42% of employees feel more stressed than last year, while only 21% report feeling less stressed. Additionally, 91% of HR directors cite burnout as a significant concern. A well-structured employee performance management system can mitigate these issues by setting clear expectations, providing regular feedback, and offering support. This helps employees stay focused, less overwhelmed, and more confident in meeting their goals.
3. Boosts employee engagement
The same report highlights that enhancing employee engagement is a top priority for 27% of HR directors. A strong EPM process fosters engagement by promoting open communication and transparency. Regular discussions about progress, challenges, and opportunities make employees feel more valued and aligned with the organisation’s goals and culture.
4. Reduces conflicts and enhances productivity
An effective performance reviews can resolve conflicts between employees and management by addressing performance gaps, challenges, and strengths in one-on-one discussions. These conversations enable them to build mutual trust, reduce misunderstandings, and inspire a positive attitude, leading to improved productivity and collaboration in the workplace.
5. Facilitates growth and promotion opportunities
With regular EPM meetings, you can encourage employees to showcase their contributions, discuss career aspirations, and express their interest in growth opportunities. For management, these sessions provide clarity on employee strengths, making it easier to identify potential leaders and offer opportunities that align with their skills and ambitions.
6. Minimises attrition rate
Data shows that the average employee turnover rate for UK workers is currently 35%. While factors behind this trend vary, effective employee performance management can play a significant role in improving retention. By maintaining open, two-way communication, managers can better understand employees’ concerns and expectations. It enables them to align key responsibilities (KRAs) and performance indicators (KPIs) with employee strengths and aspirations, which fosters job satisfaction, reduces conflicts, and enhances the overall employee experience. This can significantly lower down the attrition rates.
7. Strengthens succession planning
When done effectively, employee performance management becomes a cornerstone of succession planning. Tracking employee performance, skills, and potential allows organisations to identify high-performing individuals suited for future leadership roles. This proactive approach creates a talent pipeline, reducing the need for last-minute hiring and saving on recruitment costs.
Overcoming challenges in employee performance management
While the benefits of effective employee performance management are clear, there are challenges that organisations may face in implementing and maintaining a successful EPM process. Some common obstacles include:
1. Lack of clear goals and expectations
One of the common obstacles organisations face in implementing a successful employee management strategy is the absence of well-defined goals and performance expectations. Without clear benchmarks, employees may struggle to understand what is expected of them, which may lead to inconsistent results.
Tips: To address this issue, we recommend adopting the SMART approach. As explained above, this framework, integrated into our Performance and Talent tool, is designed to meet the evolving needs of today’s workplace, It ensures that the set goals should be Specific, Measurable, Achievable, Relevant, and Time-bound.
2. Ineffective communication
Poor communication between managers and employees can hinder the performance management process. Misunderstandings around expectations or feedback can lead to demotivation and reduced productivity.
Tips: You should promote continuous, two-way communication by scheduling regular one-on-one meetings. You can use these sessions to set expectations, address concerns, and provide actionable feedback in a clear and constructive manner.
3. Bias in performance evaluation
Personal biases or subjective judgements during performance reviews can overshadow actual achievements and contributions. This creates dissatisfaction and impacts employee morale, which ultimately leads to attrition.
Tips: Implement structured and standardised evaluation processes. Use 360-degree feedback mechanisms that gather insights from peers, supervisors, and subordinates, reducing dependence on a single person’s perspective.
4. Lack of employee development opportunities
EPM often focuses on shortcomings rather than potential growth areas, leaving employees feeling stagnant. Without development opportunities, high-performing employees may seek growth elsewhere.
Tips: Incorporate individual development plans into the performance management process. Provide training, mentorship, and skill enhancement programs tailored to each employee’s career aspirations.
5. Misalignment with organisational goals
When individual roles and objectives are not aligned with the broader goals of the organisation, it creates inefficiencies and confusion. Employees may struggle to see how their contributions matter.
Tips: Clearly connect individual KPIs to organisational objectives. During performance reviews, reinforce how each employee’s work contributes to the overall success of the company. This fosters a sense of purpose and shared responsibility.
In conclusion, to drive business success, having a structured and effective employee performance management process is essential. It not only fosters alignment, engagement, and growth among employees but also ensures your organisation remains agile and competitive. At OneAdvanced, we are dedicated to helping your organisations achieve their performance management goals through our innovative tools and tailored solutions. To learn more about how we can support your employee performance management strategy, visit our website.
Frequently Asked Questions (FAQs)
What is the role of employees in performance management?
Employees play a key role in performance management by setting personal objectives aligned with company goals, providing regular updates on progress, and actively participating in performance reviews. Their engagement, feedback, and willingness to adapt and develop are crucial for achieving individual and organisational success. Open communication and accountability are essential throughout the process.
What causes underperformance in employees?
Underperformance among employees can result from unclear expectations, lack of training, insufficient feedback, low motivation, or personal challenges. A misalignment of skills with role requirements or ineffective management can also contribute. Addressing these issues through clear communication, support, and development opportunities is key to improving performance and fostering organisational success.
How does EPM impact workplace motivation?
EPM impacts workplace motivation by fostering clarity, accountability, and growth. It aligns employee goals with organisational objectives and ensures consistent feedback and recognition. This structured approach improves engagement, highlights development opportunities, and reinforces a sense of purpose, ultimately motivating employees to perform at their best and contribute to overall success.
