Employees know they must perform their job responsibilities to receive their salary. In fact, many workers have additional motivators for doing their work well and on time, such as passion for the industry or ambition for professional acclaim. So, if it is given that your workforce will perform their tasks, why do you need to bother with performance management?
Performance management is a set of processes and tools that allow managers more insight into how effectively their teams are accomplishing individual and common goals. Today, every workplace needs a performance management system, like Workhuman, to ensure they are remaining competitive in their market. Here’s why.
It is common to see the words “performance” and “productivity” used interchangeably, but in truth they describe critically different aspects of what a workforce is supposed to do. While performance is the quality and quantity of any activity completed by the workforce, productivity is the effectiveness of that workforce at generating a desired output. Unfortunately, it is possible for a workforce to have high performance and low productivity, and businesses suffer because of it.
Performance management ensures that workers are using their time and energy to generate something of value for the business. This is good for the organization and the workforce, which benefit when high performance leads to high productivity and high profits. Through good performance management, business leaders can better communicate their goals and refine business processes to ensure that performance and productivity align.
To say that an organization is working toward “more profit” is more or less useless. The business as a whole needs objectives that are specific, measurable, achievable, relevant and time-bound — in other words, organizations need SMART goals. SMART organizational goals unify the productivity of the workforce; though different employees can and do have different roles and responsibilities, a common goal ensures that everyone is aiming their effort at the same target.
Goal setting is a primary task within the performance management process. Managers work with their teams to develop and understand individual and company-wide goals, which form the foundation of every worker’s role within the organization. It is possible to develop effective goals without performance management, but performance management helps ensure those goals are directly linked to workers’ daily tasks which makes them all but guaranteed to be achieved.
Goals are important, but over time, goals can shift. What should remain the same as a company grows and its workforce changes is the organization’s mission. A mission is the overall purpose of the business; often, it comprises the values of the organization and its employees, and it serves as an unwavering source of guidance for clients and the workforce in understanding what the company is trying to accomplish.
As with goal setting, it is possible for business leaders to generate a company mission statement without engaging in performance management. However, by integrating the common mission into a greater performance management system, business leaders can utilize the mission to guide the workforce to greater success.
To Identify and Retain Top Performers
Employee turnover is bad for any business, as onboarding new employees is time-intensive and exceedingly costly. Losing any trained worker is a cause for concern from business leaders, but in particular, organizations want to be sure that they are keeping their most talented employees on the payroll. Yet, without a performance management system, leaders cannot be certain which workers are the most valuable to the business, so they might devote undue resources to trying to retain the wrong staff.
Performance management systems help managers and executives easily identify the organization’s top performers. With this information, business leaders can more effectively utilize perks, promotions and other prizes to keep top talent satisfied and the company as productive as possible. Used in conjunction with a recognition program, performance management can reduce turnover and keep the workforce feeling fulfilled into the future.
A functional performance management system takes time for business leaders to develop, but once performance management processes are in place, the organization should thrive as a result. The enhanced productivity from clear and common goals and missions as well as the retention of the best workers within a company will undoubtedly lead to mutual success.