Performance Management is the barometer that gauges the performance of employees of an organization. Through this, companies are able to analyze and interpret the productivity of their employees which further gives them a clear picture as to what steps are need to be taken for overcoming the shortcomings and building the existing gaps, if any. It is a cutting-edge application that is used by companies to develop the performance of their resources and leverage their caliber to the best use, which thus elevates the company’s productivity levels. It refers to the activities, processes or programs that firms create in order to evaluate the work-rate of employees, teams as well as separate departments.
Performance Management encompasses commitment analysis, work analysis, goal setting, appraisal template, self-appraisal and mid-year review, processing increments in bulk, normalization and bell curve analyses along with balance score card methodology. It also provides an opportunity for the companies to let their employees integrate their personal goals with the company’s goals so that they go an extra mile to increase their outputs, which will further benefit the company. This is also called self-propelled performance process. The following are tools that are used by companies to assess the performance of the employees:
Commitment analysis: This gives a brief on the performance standards and objectives of a particular job position. Post this, the work analysis is carried out on the basis of the job description of a specific profile. The goal setting functionality that comes under Performance Management helps in defining the Key Result Areas (KRA)/Key Performing Indicators (KPI) targeted for a year. While these are determined, it becomes easier for employees to set their targets accordingly.
Appraisal template: This allows multiple appraisal template creations based on information like designation, department etc. A user-defined review/appraisal process eliminates the chances of inaccurate information flowing in. Self-appraisal is tricky as employees have to assess and evaluate their own performances in an honest way. Mid-year review is a crucial part of the Performance Management process as it helps companies understand the employees’ level of productivity and recognize them accordingly. Also, processing increments in bulk makes it easier for organizations to analyze employee contribution. This also helps them in generating bulk increment or appraisal letters, saving immense amount of time and energy.
Normalization and Bell Curve analysis: This is another innovative way to check the performance of employees. As employees are the determinants of a company’s success, hence it is important to filter out those who are performing well from those who are still struggling to reach that level. This method involves giving ranks to the employees by comparing their contributions with their colleagues, thus screening the best, average and worst performers. It gives a fillip to employees to hone their skills and bring significant improvements in their work. The best ones are rewarded with perks, the average ones are provided with proper training and the worst-performing employees are given warnings and sometimes also the opportunity to enhance their performance.
Balanced score card: This was created as a performance management tool and is now associated with converting the business strategy of an organization into realizable goals that can be achieved by employees. It showcases the firm’s goals in a ‘balanced’ way to the employees. This methodology has undergone tremendous transformation in recent years and helps the company to achieve its goals like profit maximization, resource optimization and much more.
Performance Management provides tremendous advantages to both the employees as well as companies. Improved performance of employees is directly proportional to the company’s productivity. Hence, Performance Management helps companies to elevate their finances, escalate employee engagement, infuse transparency in the system, encourage the employees to perform better and incorporate seamless external as well as internal communication.