In measuring performance results and behaviors are all employees responsible for the results

What Is Performance Management?

Performance management is a corporate management tool that helps managers monitor and evaluate employees' work. Performance management's goal is to create an environment where people can perform to the best of their abilities and produce the highest-quality work most efficiently and effectively.

Key Takeaways

  • Performance management tools help people to perform to the best of their abilities and produce the highest-quality work most efficiently and effectively.
  • The precept of performance management is to view individuals in the context of the broader workplace system. 
  • Performance management focuses on accountability and transparency and fosters a clear understanding of expectations.

Understanding Performance Management

A formal performance-management program helps managers and employees see eye-to-eye about expectations, goals, and career progress, including how an individual's work aligns with the company's overall vision. Generally speaking, performance management views individuals in the context of the broader workplace system. In theory, you seek the absolute performance standard, though that is considered unattainable.

Performance-management programs use traditional tools such as creating and measuring goals, objectives, and milestones. They also aim to define what effective performance looks like and develop processes to measure performance. However, instead of using the traditional paradigm of year-end reviews, performance management turns every interaction with an employee into an occasion to learn.

Managers can use performance management tools to adjust workflow, recommend new courses of action, and make other decisions that will help employees achieve their objectives. In turn, this helps the company reach its goals and perform optimally. For example, the manager of a sales department gives staff target revenue volumes that they must reach within a set period. In a performance management system, along with the numbers, the manager would offer guidance gauged to help the salespeople succeed.

Focusing on continuous accountability creates a healthier, more transparent work environment, and emphasis on regular meetings can improve overall communications. Because performance management establishes concrete rules, everyone has a clearer understanding of the expectations. When expectations are clear, the workplace is less stressful. Employees are not trying to impress a manager by doing some random task, and managers aren't worried about how to tell employees that they are not performing well. If the system is working, they probably know it already.

Performance-Management Programs

Although performance-management software packages exist, templates are generally customized for a specific company. Effective performance-management programs, however, contain certain universal elements, such as:

  • Aligning employees' activities with the company's mission and goals. Employees should understand how their goals contribute to the company's overall achievements.
  • Developing specific job-performance outcomes. What goods or services does my job produce? What effect should my work have on the company? How should I interact with clients, colleagues, and supervisors? What procedures does my job entail?
  • Creating measurable performance-based expectations. Employees should give input into how success is measured. Expectations include results—the goods and services an employee produces; actions—the processes an employee uses to make a product or perform a service; and behaviors—the demeanor and values an employee demonstrates at work.
  • Defining job-development plans. Supervisors and employees together should define a job's duties. Employees should have a say in what types of new things they learn and how they can use their knowledge to the company's benefit.
  • Meeting regularly. Instead of waiting for an annual appraisal, managers and employees should engage actively year-round to evaluate progress.

When you measure something – such as for a recipe or a construction project – it’s often a numbers game. However, when measuring human performance, you must use a combination of hard numbers and soft intuitive insights.

Here are a few ways to measure and evaluate employee performance data:

  • Graphic rating scales. A typical graphic scale uses sequential numbers, such as 1 to 5, or 1 to 10, to rate an employee’s relative performance in specific areas. Scales are often used to rate behavioral elements, such as "understands job tasks" or "participates in decision-making." Or they could note the frequency an employee performs a certain task or behavior, such as “always,” “frequently,” “occasionally,” or “never” coming to work on time. You can adapt scales to your business needs.
  • 360-degree feedback. This well-named system takes into account the feedback, opinions and assessments of an employee’s performance from the circle of people in the company with whom they work. It can include co-workers, supervisors and others. As you evaluate the input from many sources, you can note positive and negative similarities and trends. You can also identify areas that may need additional measurements and support.
  • Self-Evaluation. Asking an employee to evaluate her own performance can be very effective. Often, employees may be more critical of their performance than you might be. You can use a form that requires multiple-choice answers, essay-type answers, or a combination of the two. Comparing a self-evaluation to your own objective appraisal can be helpful in finding similarities and discrepancies along with a richer understanding of employee’s performance. It can generate conversations that can be beneficial to employee development.
  • Management by Objectives (MBO). Also known as “management by results,” this is a process whereby employees and managers form objectives together. They jointly determine individual objectives, how they align with company goals, and how performance will be measured and evaluated. MBO gives employees a clear understanding of what’s expected and allows them to participate in the process, which may foster better communication and increase motivation.
  • Checklists. Using a simple “yes-no” checklist is a quick and easy way to identify employees that have deficiencies in various performance areas.  It will also identify those that need additional training and knowledge to become more efficient.

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Who is responsible for performance measurement?

“Principle #8 – Senior Management is accountable for the measures. Senior management is ultimately responsible and accountable for the organization's PMF and the related processes and practices.

How do you measure the results and behaviors of employees in an organization?

Here are a few ways to measure and evaluate employee performance data:.
Graphic rating scales. A typical graphic scale uses sequential numbers, such as 1 to 5, or 1 to 10, to rate an employee's relative performance in specific areas. ... .
360-degree feedback. ... .
Self-Evaluation. ... .
Management by Objectives (MBO). ... .
Checklists..

What is measuring performance of employees?

“Employee performance measurement” is the evaluation of an individual's work based primarily on objective, quantitative metrics. I believe it is critical to understanding how your employees are developing professionally and how they are contributing to your business.

Who should provide performance information?

It could be their direct manager (most common method), subordinates, customers or clients, self, and/or peers. Table 11.2 “Advantages and Disadvantages of Each Source for Performance Evaluations” shows some of the advantages and disadvantages for each source of information for performance evaluations.