How to Optimize Employee Performance Management

How to Optimize Employee Performance Management

Employee Performance Management is a critical process in an organization. One of the core reasons to have this process in place is to evaluate the business profits and measure its survivability. This will help the organization understand the weight of each employee’s work and how effective its workforce is. 

Here’s how we can define an Employee Performance Management Process. 

“It is a  communication-based and collaborative process where both management and employees work together to plan, monitor, and review the employee’s objective, trajectory, and long-term goals and their contribution to the company.”

This process should be continuous and regular, where both the employees and management can give and receive feedback. Performance management aims to improve employee performance through development and build a competitive work environment that would drive business better. 

What Constitutes a Poor Performance Management Process?

Both the employees and the management define the success of this process. Both are integral parts of the process and hold equal responsibility for managing and developing the employee’s performance. But some studies point out several instances where few of the groups are left out of this process. The reason could be either of the two –

  • The employee is not interested in attending the process 
  • The organization doesn’t want the participation of an employee or group. 

Both these cases have the same negative effect on the organization’s growth. According to a Gallup study, only 22% of employees are engaged in the process. If the remaining 78% were also engaged, it would give the organization a considerable gain. The same study also reveals the main reason why employees lack the motivation to participate in this process. They were – 

  • Less-deserving employees receiving promotions 
  • lack of sufficient feedback from management, 
  • Not including employees while setting an organizational goal.

All these would lead to employees demeaning the value of the workplace. 

Benefits of effective Performance Management Process      

Businesses that practice the Performance Management System with full effectiveness has always benefitted from the program. They can easily retain the top talent as the employee now understands what the organization goal is and their part to achieve the goal. This gives them a clear career path and excellent job satisfaction. Now that employees understand their importance to the organization, they feel motivated to contribute to the organization’s business goal, which improves overall organizational performance. 

The company will enjoy excellent employee loyalty and high retention rates, which will translate to cost-reduction. This organization has to ensure that they communicate the business objective effectively to the employees and check requisite employee skills to fulfill the goals and the relationship between an individual employee and his manager.

How to improve the Employee Performance Management Process?

Irrespective of what stage your organization is in the Performance Management Process, using the right Performance Management System methods would turn things around. Here are some of the steps you could follow – 

Employee Performance Management as an opportunity for performance coaching

The traditional role of HR in Performance Management is to correct the poor performance and review the salaries. However, in the modern approach, HR should help the employees by providing coaching opportunities instead of just reviewing poor performance. HR should keep the performance management meeting as a two-way conversation at frequent intervals. This should be made engaging for the employees, and they should look forward to the next one. For example, HR can have one session each month and give employees tips to improve their performance. They can understand the areas where improvement is required and provide the employee with the right coaching.

Positive Reinforcement

Encouragement is the most vital tool to amplify motivation in a team. This strengthens the employees’ spirit and improves their trust in the organization. Teams that are positively reinforced are prone to deliver better results. This also improves employee’s confidence at work. Positive reinforcement in the workplace makes the employee feel respected and recognized, giving them the confidence to provide various ideas for their growth.

Align Employee Performance management review with what you’re reviewing

The organization must carefully choose an employee’s evaluation program based on the organization’s size and type. The review process will make sense if every job category is individually targeted with its respective set of questions for review. In other words, the review process for staff from the sales team should not be the same as the Review process for staff from the line in the factory. This targeting-based review will help in the performance appraisal and the overall employee process management process.

Provide opportunities for learning and development

Upskilling of employees is not only effective for the organization’s growth but also for employee satisfaction. To build a capable and effective workflow, the employee must be provided ample opportunities to improve their skills and knowledge. Importantly, make sure a considerable portion of the organization’s entire population is part of leadership training.

Effective Feedback

It is essential to inform employees when they are doing something right and when doing something wrong. The feedback should be objective but at the same time personal. However, make sure not to hurt the employee while providing feedback. Provide feedback on only the recent items and keep it as a handful. This will help the employees to process the information process and improve. It is also essential to provide feedback promptly as it would help them improve before the situation decays.


The employee performance management system is an effective method to improve individuals and the entire organization’s value. Sadly, only about 14% of organizations are happy with their current performance management process. However, if the program is implemented effectively with complete dedication, then the company and employee’s benefits can be easily assessed, and improvements for both would be transparent. Healthy and regular communication between the organization and employees about the goals and objectives would also lead to a good performance management process.

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