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Effective Performance Management Strategies

authorIcon By greytHR 5 minute read topicIcon ESS

Effective Performance Management Strategies

No prices for guessing on the most stressful activity for a Manager, especially if a large team has to be managed? In all likelihood, your first guess would be performance assessment.
Traditionally, most companies have an annual assessment period (some have half-yearly too). It is a sensitive topic as the career growth of individuals depends on it. HR has a very unenviable task of creating performance benchmarks for each function, depending on the work nature. For example, a sales group’s performance parameters cannot be equated with software engineers since their roles & responsibilities differ entirely. To top it, there is no one standard global formula to assess the performance of employees.

However, we will evaluate various strategies that an organization can adopt to implement an effective performance management process. We will further split it into different internal stages as to how the process can be organized.

Hierarchy, Span of control

A typical office hierarchy, when plotted on a chart, will display a triangular diagram with the CEO / MD on the top, followed by direct reports in the next rung and continuing down to their respective direct messages, which form the center and base of the triangle. While companies try to optimize resources by creating a larger team(s) under one Manager, many researchers suggest that the span of control – meaning number of direct reports – should not exceed 7~8 per Manager to forge an effective engagement. The diagram below may help you to understand the concept better:
DR= Direct reports

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Set achievable & agreeable goals classified under Company, Functional & Individual Goals

The primary task of HR & Manager is to ensure each team member understands and aligns with goals to be achieved within a given period. For clarity, plans could be split into three major factors – Company goals (Directional), Functional goals (Deliverables), and Individual goals (Career).

Company Goals are foundational aspirations like missions, primary objectives, purpose, etc. required to create an excellent organization for both clients and employees. Example: To provide our clients with the best software solutions and partner with them continuously to build ever-lasting relationships. These goals need to be abided by every employee if the ship has to sail in one single direction. HR has a significant role to play in teaching these in Managers and employees alike.

Functional Goals are the department’s objectives on deliverables to internal or external clients. Example: To provide employees with an excellent working environment & ample opportunity to fulfill their dreams and career aspirations.

Individual Goals are career-specific targets set jointly with the Manager or independently by the team member. Example: Completing mandatory and other training, skill enhancement, project completions, soft skills, etc.

Goal Setting

Goals should be realistic & achievable, and most importantly, agreed upon by both parties. They cannot be set up for failure, and every effort should be put in by the Manager or HR to help employees achieve their set goals in terms of infrastructure, training, guidance & support.
Goals need to be discussed at length and signed off as it forms an essential aspect in an employee’s career formation. These can be set for half / full-year (short term) or for a specific number of years, such as 3-5 years (a long time). Goals cannot be open-ended or without an object of achievement. Regular meetings with managers or HR soliciting frank feedback will help employees in tracking their performances.

Performance evaluation

It predominantly begins with employees being asked to do a self-assessment based on agreed goals vs. achievements. Employees must honestly evaluate themselves by reporting both under or over achievements.

Manager evaluation, 360º feedback from peers / stakeholders / clients

The performance evaluation must be discussed with lots of data and facts. It would be wise for a Manager to solicit feedback from the employee’s peers or stakeholders or, in some cases, even from clients to form a comprehensive opinion on the employee’s performance.
Evaluation should be reasonable with some leniency/flexibility for acceptable errors or oversights. Other influential factors such as consistency in performance, the potential for future leadership roles, independent thought process, proactiveness, attitude, change management, flexibility, smart work/time/effort/cost-effectiveness, client interaction, peer management, participation & involvement, etc. play an essential role too.

Rating/ranking based on data and observations

Based on the above parameters, each achievement needs to be evaluated with a rating. Soft skills and personal behavioural attributes, too, should be rated. Merely achieving one’s functional goals is not enough while failing in other features. The company’s future will depend on how employees are evaluated from such angles and moulded to be good leaders.

Performance discussions should spell out what worked, what needs improvement, and the feedback provided. Managers should avoid trying to force-fit employees in a bell curve – an almost defunct method - that requires Managers to identify low, average, and super performers in something like 05:90:05 ratio of their total direct reports. Employees needing improvement should be recognized for specific training and regularly coached while those who have met or exceeded the expectation need to be rewarded promptly.

Employees do appreciate a very transparent and tangible assessment process. A happy employee creates a pleased organisation, so they say.

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