Performance management success is closely associated with business success – you are only as good as the people you employ, certain wisdom reminds us. But having the best talent on your team is more than just good hiring practices – it involves nurturing, training, assessment, and feedback to help support growth, encourage good performance, and increase productivity.
Many HR groups in various businesses focus some of their efforts into finding the right performance management solution for their business, but even the best-laid plans and policies can run into some challenges. How you handle performance management problems can be foundational to the overall success of your performance management process, employee relationships, and even in meeting business goals.
The most common performance management problems and their solutions
Here are some of the most prevalent performance management problems that pop up in modern performance management and how your business should best address them.
1. Lack of strategy or focus
Performance management is meant to help support employees and guide their success in a way that helps the business meet their overarching goals. Sales employees, for instance, need to have performance managed in such a way that enables them to sell more in order to help grow the revenue for the business. But does the business also have goals that include building long-term relationships for repeat business? It’s important to make sure that performance management includes the kinds of ongoing support – such as training – that support the most important goals of your business. The keyword here is “important” – you can’t deliver any real value to your business by trying to do too many things at once. Digitalist Mag notes, “Having too many company goals…will likely leave your employees feeling confused, unaligned, and inefficient. Simplify and prioritize your company goals, and focus your performance management on a few critical goals that are key to your business growth. Then help your employees understand how their everyday work and individual goals will help achieve these objectives.” It’s important to start with a solid, well-defined strategy in order to effectively manage performance in a way that supports business goals.
2. Stakeholder feedback, design, and buy-in
While establishing a strategy is one of the crucial starting points of any effective performance management, it’s also important to get the feedback for the overall process from those who will be using it – managers, HR, and others. Digital Mag points out, “ Without proper consultation with your key stakeholders, your performance management process may not address all the needs of the business, and you risk losing time, resources, and buy-in implementing a system that no one wants or knows how to use.” In addition to that, if leadership teams aren’t on board with the importance of performance management, you’ll have a hard time implementing a successful process, because it’s unlikely you’ll have access to or authority to get the tools that are needed for the most successful performance management. Make sure to expose your leadership team – or anyone who is unconvinced in the importance of consistent, holistic performance management – to statistics and research that discusses its impact and business cases that show how it impacts success.
A huge part of effective performance management is timely, meaningful feedback. Most employers and managers mistake the feedback element of performance management to mean annual reviews, but it’s important to create open lines of communication and convey feedback much more often than one formal review per year. The most engaged, productive, and high-performing employees are the ones who receive performance feedback as both positive behaviors and performance issues come up. Regular encouragement, suggestions, and direction are necessary for employee morale, engagement, and performance at the employee and business level.
4. Unbalanced reviews
While performance appraisals are only one part of the process, one performance management problem that businesses run into is a lack of balanced feedback that doesn’t truly address all parts of the performance. Many businesses have come around to a 360-degree performance appraisal model, which involves soliciting feedback from not just managers and supervisors, but also peers, customers, and direct reports. This gives employees a better overall sense of what they’re doing well and what challenges they need to focus on.
5. Post-feedback support
The feedback of managers and others is crucial, but without the proper follow-up, training, and development opportunities, the feedback won’t shape real change. Employees who have performance issues need to be trained on how to address these issues in order to keep up employee morale and also positively affect the business. Employees who are praised for their good behavior need to see acts of encouragement and recognition – and even career development and guidance – in order to believe that their contributions matter and encourage continued hard work and dedication. Both are key to retaining employees and growing business success.
The importance of performance management – and addressing performance management problems – is critical. Performance management problems cost your business money, reduces employee engagement, and can hinder business growth. When your performance management is successful and effective, you can increase revenue and keep valuable employees from leaving your organization.