Key Ingredients of Performance Management

In today’s competitive business world, managing performance of a business, employee or products has become one of the key success factors for those top performing organizations. However, many people mistakenly regards the performance management as a simple rating system that just give ratings for the employees or department at the year end. In fact, performance management is a systematic system that comprise of five key ingredients: planning, developing, monitoring, rating and rewarding.

Planning and Developing

Planning needs to consider the business overall goals and objectives. After the overall business targets are set, the next step is to set performance expectations and goals for groups, departments and individuals depending on the business structure and the divisions. During the process, it is essential to get the employees involved so that they may understand clearly what the business goals are and the rationales for the goals and how they can achieve or exceed the targets. Studies show that the failure of the performance may attribute to the lack of interaction between the business and employees. Another important areas of consideration is the flexibility. During the planning stage, performance management system needs to be flexible so that they can be adjusted for the changing environment.

After the performance management has been established, the business needs to give necessary resources and support for employees to help them accomplish the tasks and requirements. Business can improve the employee skills through various methods such as training, improved process and new skills development. Studies show that those business that provide training and development opportunities will result in good performance from employees. It is also essential for the managers and supervisors to get to know the development needs of employees before developing the training and support program.

Rating, Monitoring and Rewarding

Rating, monitoring and rewarding can help the performance management system effective. Without a good monitoring and rewarding system, the performance management will be just a working documents and forms that just needed to fill in once a year at the year end. A good monitoring system will provide ongoing feedback to employees and department so that they know what they process are and how to make necessary changes. Through on-going motoring, managers can identify those who lacks in behind and provide necessary support rather than wait until the year end.

Rewarding is one important part of performance management. With proper rewarding, business can encourage those who have made great contributions continuously work harder. It is the recognition from the business to the individual or departments. It is important for managers to know that Recognition and rewarding needs to be on-going during operations.