Performance management

• Performance management

  The process used to evaluate and improve both individual and business performance.

  Employees that perform well, help the business achieve its objectives. Employees may have areas they need to improve.
• Performance management strategies help:

  ~ Assess the performance on the employee

  ~ Provide feedback to the employee

  ~ Address areas of strength

  ~ Address areas for growth

  ~ Align employee objectives with business objectives
• Management by objectives (MBO)

  Where the managers and employees agree on a set of goals for the employee.

  The objectives are then used to EVALUATE the employee's performance at regular intervals and provide FEEDBACK.

  MBO encourages employees to take ownership of their work.

  Helps employees understand how their work contributes to the success of the business.
• MBO cycle

  ~ Set business objectives

  ~ Set & align employee objectives

  ~ Monitor performance

  ~ Provide feedback

  ~ Employee reward or recognition
• Management by objectives advantages

  ~ Able to gain commitment from employees

  ~ Employees and managers are clear on performance expectations

  ~ May identify where employee needs training or support

  ~ Objectives are aligned, so the work of employee contributes to the business objectives
• Management by objectives disadvantages

  ~ Can be time consuming to set the goals and provide regular feedback

  ~ May be challenging to set measurable goals for some roles

  ~ Failing to meet an objective can harm esteem
• Performance appraisals

  A formal evaluation of how well an employee is performing in their role.

  Performance appraisals often occur on a regular basis. E.g. every 6 months or every 12 months

  Evaluation will normally be conducted by the employee's manager/supervisor.
• Performance appraisal involves:

  ~ Reviewing employee goals and accomplishments

  ~ Providing feedback on areas for improvement

  ~ Developing a plan to achieve improvement (e.g. identifying

  training needs)

  ~ Setting new goals
• Performance appraisal advantages

  ~ Provides feedback to employee

  ~ Identifies areas for growth, leading to improved future performance

  ~ May identify employees in line for a promotion
• Performance appraisal disadvantages

  ~ Can be time consuming, particularly if the whole business goes through the process at the same time

  ~ The evaluation can be subjective

  ~ Can be a time of stress for managers and employees
• Self-evaluation

  Where employees assess their own performance against pre-determined goals.

  Process encourages emplovees to take ownership of their work and reflect on their own strengths and weaknesses.

  Employees may sit down with their supervisor to discuss their evaluation
• Self-evaluation advantages

  ~ Encourages employees to take ownership of their performance

  ~ Helps employee identify areas for growth as well as how to develop

  these areas

  ~ Provides a basis for more meaningful feedback from managers
• Self-evaluation disadvantages

  ~ Evaluation may not be entirely objective

  ~ Some employees may not have the ability to undertake an objective assessment

  ~ Often requires ongoing documentation so the employee can recall their achievements and challenges
• Employee observation

  Where managers, supervisors or other stakeholders view the employee while they are performing their work.

  Observations can be formal or can be more informal.

  E.g. Formally observing an employee serve customers (such as a secret shopper); or

  Informally asking managers and other employees to provide feedback on their general observations of the employee

  Feedback is then provided to the employee on these observations
• Employee observation (360 degree feedback)

  One form of employee observation is 360 degree feedback.

  This aims to get the views of different stakeholders that have had interactions with the employee.

  For example:

  ~ Manager

  ~ Other employees

  ~ Customers

  This helps provide more objective feedback and develops a clear picture of strengths and areas for growth.
• Employee observation advantages

  ~ View the employee in action, more objective information If using 360 degree feedback, the managers get a broad range of feedback

  ~ Identifies strengths and weaknesses as well as a path to improvement
• Employee observation disadvantages

  ~ May be deemed intrusive and creates anxiety for employees

  ~ May not be an accurate representation of employee performance if observation is a one-off

  ~ Requires time and resources to gather feedback from a range of stakeholders if using 360 degree feedback