Performance management and appraisals

Performance and appraisal procedures

Performance management is the general term used to describe how staff performance is managed within a business.

Effective performance management generally combines a set of processes which when combined will enhance the overall performance of an organisation by improving the contribution made by its employees.

Performance management and appraisals

Areas of performance management

Performance management is a broad and complicated area of HR as it encompasses many activities such as the setting of targets, staff appraisals, frequent communication, training and development and pay and reward.

Performance management systems

An effective performance management system is seen as key to the success of an organisation and plays a crucial role in managing its performance by:

  • Ensuring that employees understand the importance of their contribution in reaching the overall targets of an organisation
  • Ensuring that each employee understands what is expected from them and identifying what training and support will be needed for the employee to meet these expectations
  • Aligning the objectives of an employee to those of an organisation
  • Promoting a better relationship between an employee and their line manager through regular communication

The positive effects of good performance management

Performance management also has a positive effect on job satisfaction, employee loyalty and employee engagement by providing open and transparent job feedback to employees.

Performance management systems also establish a clear link between performance and reward and the provision of training and development opportunities to assist employees with career progression.

Performance management

What are the main objectives of having a performance management system?

Performance management frameworks are designed with the objective of improving both individual and organisational performance by identifying performance requirements, providing regular feedback and assisting the employees in their career development.

Some of the key objectives of performance management are:

  • Build highly skilled and motivated individuals and teams which will drive forward success for an organisation
  • Enable employees to achieve high levels of performance
  • Motivate and boost employees with an effective reward policy
  • Identify any barriers to performance and resolve these through training and coaching
  • Promote career growth by helping employees to gain skills and knowledge

An effective performance management system will help you achieve these objectives and drive forward success for your organisation.

Performance Management

What should be in a performance management system?

The best performance management systems will incorporate a number of processes which will monitor, measure and reward performance.

Some of the key stages are:

  • Performance planning

This is the first component of a performance management process and forms the basis of future performance appraisals. The employee and the manager will use this session to identify key performance areas and agree targets for the year.

  • Performance appraisal and review

Most organisations will hold staff appraisals on an annual basis depending on the type of business and the pace at which they operate. Other organisations that operate in a fast paced environment where things can change quickly will prefer to hold bi-annual reviews to ensure that performance remains on track.

During this process, an employee should know how to self-appraise their own performance and describe their achievements against the targets set. These can then be used as the basis of a discussion between the employee and line manager who will provide their own feedback and give the final ratings on performance for that period.

This process engages both the employee and line manager to understand and analyse any causes of poor performance and how they can be overcome. A good appraisal will be valuable to the individual, the Manager and the company overall.

  • Feedback and counselling

It is important to make an employee aware of any under-performance or weaknesses they may have in order that these can be addressed through any training and development needs. This will allow the employee to develop competencies and improve their productivity which will help an organisation meets its objectives.

These 1-2-1 type sessions should be arranged as and when required and should complement any Performance Appraisal process.

  • Rewarding good performance

One of the most important aspects of performance management is the rewarding of good performance. It motivates an employee to exceed their targets and receive recognition for their efforts.

Rewards can be financial in the form of a pay rise or bonus or can be through job promotions and access to enhanced benefits such as support with training costs or extra paid leave. Often, employees value receiving personal recognition for their efforts as much as the more tangible rewards.

  • Performance improvement plan

Where an employee is not performing to the required standards it will be necessary to review their performance and set new targets to meet. A line manager should clearly communicate the areas where improvement is expected and a deadline should be set within which the improvement must be shown.

The plan is jointly developed by the employee and their line manager and should be arranged as and when required to complement any performance appraisal process. For more information on performance management systems you can also read our additional blog article. 

Performance Management

How our HR consultants can help

PeoplepointHR will assist you in putting together a performance management framework which is geared towards helping your organisation meet and exceed its objectives.

Our HR consultants will:

  • Perform a full review of the business and departmental objectives
  • Review your current appraisal and performance related processes and highlight any weaknesses
  • Create a new performance management system which is best suited to meeting the goals of your organisation
  • Provide training to your managers on how to conduct appraisal and review meetings with staff
  • Review your current pay and reward structure and make recommendations
  • Develop an effective communications strategy so that all employees are kept engaged and motivated

Our approach will ensure that we help you develop an effective system which is meaningful to both management and employees alike and give your organisation the best chances of success. Contact PeoplePointHR today on 0330 555 2555.