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Performance management is on the brink of a huge change. The old systems of the past, where performance goals were set once a year and re-examined at the year-end review, are beginning to die. Companies are recognizing that these systems generate a lot of work and aren’t tied to employee engagement and performance. In fact, they often require employees and managers to set year-long goals that become stale in the months that pass between their actual review and their setting – they can also de-motivate employees, when they feel that the process is threatening or not relevant to them.
This is why we’re on the brink of a great change in performance management – making it modern, engaging, transparent – tying into many other changes in how 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 continuing process of communication between managers and employees, with the mutual goal of accomplishing the strategic goals of the company. It is the foundation for employee performance and engagement in any organization that wants its employees to reach their maximum potential and boost their productivity and success.
The process- often combining both oral and written components, is happening throughout the year and usually results in an annual performance evaluation. This entire communication process involves defining clear specific expectations, setting objectives, establishing goals, providing ongoing feedback and examining results.
Next generation performance management isn’t about setting annual goals, but rather personalized goals for employees, changing as dynamically as the business does. This not only fits with the dynamic changes in the business environment but also gives employees real-time feedback on how they are performing, letting them self-correct as well as giving them a sense of accomplishment (just like using a fitness tracker would).

Steps to HR performance management

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

1) Performance Planning

Preparing in advance is crucial. The first step is establishing goals and objectives, which will be the target employees want to reach and will mark the desired state they wish to arrive to. Each individual’s goal should support and be aligned with organizational goals, and the more detailed the performance planning is, the better chances are for the goals to be achieved. This helps employees understand how and what to spend their time on, and how to allocate their efforts between special assignments and on-job duties. After this step is performed successfully, both staff members and managers should be fully aware of the timeframes, what is the expected outcome and how success will be measured.

2) Performance Coaching

The core purpose of this step is to provide regular feedback on performance during the whole year, and at the same time providing direction and support, and coaching employees to modify performance and increase exercise where necessary. Every single employee is different from another – he may be working on different tasks, proficient in other skills and needs support in other areas. Therefore, managers need to be aware of the different necessities of employees and coach them in a way that meets their personal needs. This step is extremely important for empowering employees, maintaining an encouraging dialogue with employees and leveraging their success.

3) Performance Review

Here employees receive feedback. Feedback should include both recognition of the employee’s strengths and discussion about the challenges that require improvement and more coaching. After that being done, new plans for further development can be built. Those plans should as well be clear and measurable, and they in fact represent the beginning of the whole process again.
Note that next-gen system focus on real time feedback on performance. Rather than tie the performance discussion to the compensation discussion and do it annually (missing on the opportunity to let employees reflect on performance in real time, course-correct and check on a daily basis what is required of them) – next gen systems give real-time feedback.

How can managers successfully carry out this process?

As you can tell, the process of performance management is rather long and has many elements that needs to be addressed. Furthermore, it needs to be done with every single employee in the organization simultaneously, while each employee has different individual goals and characteristics. Hence this process, in large organizations especially, might require using a platform that supports the process and helps managers handle and operate it from beginning to end. HR Performance Management systems enable managers to track and monitor performance of individual employees as well as departments, and the overall organization.

What should you look for in HR Performance management platform?

The segments of the performance management platform provide the framework in which employers and employees function. Each component has its unique purpose, and together they assemble the structure that ensures employees are provided with the keys necessary for them to understand and complete their goals.
When choosing your performance management software or platform, you want to make sure it addresses these key components:

• Clear measurements

According to the specific role, ongoing missions and current position in the employee journey, each employee should get his own key performance indicators (known as KPIs). Providing clear measurements that are personalized for the individual employee is essential for her to understand the manager’s expectations, and essential for the manager to keep track of the employee’s scores and achievements. Personalization is very important, since the goals need to be relevant to the specific employee in order to ensure employee engagement.

• Engagement tools

A successful performance management system should integrate performance improvement with employee engagement, to ensure employees are committed to develop and advance. There are many ways to create engagement, check out for example how Microsoft used gamification to boost performance and engagement of their call-center agents.

• Knowledge

Employees should obtain the skills and knowledge required of them to do their jobs and meet their goals as expected, and this can be confirmed through learning and development activities. Ideally, learning (daily micro-learning) should be integrated with the system.

• Feedback & recognition

Recognition is important to performance management since it is an integral part of the employee’s emotional sense of their work, serving as an important driver. You want your employees to be induced with intrinsic motivation that lasts and not to be focused on the vanity of winning a prize.

• Analytics

For performance management to be effective, managers must be provided with the precise data according to the exact metrics that had been set. They should be able to view the data anytime so they can set the right goals for success. The performance management software should analyze and assist managers in their reasoning and evaluation of the employee.

Overall, we need to remember that HR performance management is a communication process between employers and employees, and is essential for every organization’s thriving and growth. In order for it to be conducted properly, performance management systems can support managers and make the process easier and much more successful. When choosing a platform as such, managers should take into consideration its ingredients and make sure it holds the key components that make this cycle the most communicative, efficient and successful.

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