An effective performance management system is like a magical wand, which you need to execute your tasks successfully, to achieve your destination. 

By the way, what makes a performance management system effective and innovative? 

The process should not be following old school methods in this changing workforce and business times. It should be agile and quick in measuring and evaluating the performance of the employees. 

And this is why most companies are moving away from the traditional once-in-a-year performance appraisal and management process.  

Our tech-savvy workforce of this generation is not willing to work just for pay. They need more. They need a performance management process that takes an interest in their personal as well as professional growth. 

It does not stop just there. The employee engagement plans should also be made stronger by adopting suitable performance management tools.  

Tools? Yes.  

Do you think this workforce, who expect much more than pay, and a quickly growing environment, would put up with a regular pen and paper approach and manual performance management process, which would consume a lot of time and effort? 

Of course, not. And the result is, your employee turnover rate would catapult.  

So, what is the solution? 

Digitizing your workplace and automating your performance management system. 

But, before choosing the right way of conducting the performance review process, you must understand that focusing solely on performance appraisal is not going to help but having a holistic performance management system would make a great difference to your business. 

The performance appraisal process is just a part of the whole strategy, perhaps, a kind of end result of all the efforts put into improving the performance of the employees.  

Applying the knowledge of an effective performance management system combined with trailblazing performance management software can create a great impact on the productivity and engagement rate of your employees. 

Here are five important features of an effective performance management process to make you an expert in managing the performance of your workforce. 

Objectives and Key Results (OKR) and SMART goals 

There are many advocates, which include global successful personalities for this powerful goal-setting framework, Andy Grove, Larry Page, John Doerr, Sundar Pichai, just to name a few. Objectives and Key Results help your employees to move toward the common goal of the business. They know what to focus on and what not to with transparent management, department, and team goals and also the regular team meetings to guide them even if they are off the path somewhere along the way.  

SMART goals are developed by experts to help businesses create Specific, Measurable, Attainable, Reliable, and Time-Bound goals. This goal-setting mechanism decides whether a particular goal is worth pursuing and will it take the business a step ahead.  

Following the guidelines of this framework make the employees set relevant goals even during the consideration stage instead of choosing the trial and error method. Also, this methodology prevents businesses from setting general and unrealistic objectives, which could lead them to failure. 

Real-Time Feedback / Continuous Check-ins 

In this feature, the managers can track the performance of the employees in real-time and provide feedback to help them improve themselves through continuous check-ins and one-on-one meeting sessions. This is an inevitable part of an effective performance management system as it strengthens the manager-employee relations. Research also suggests that more than half of the workforce prefer real-time frequent feedback to mundane uncomfortable annual feedback.  

Imagine if you were an employee in a company where you hardly have any real conversation with your manager, how would you feel? Really Awkward around the manager, I suppose. To steer clear of that kind of situation, continuous check-ins are mandatory. They help the individuals involved learn a little bit more about each other which can help during work processes.  

360 Degree Feedback 

Sometimes, with just the manager’s feedback, there are higher chances of biases such as manager bias, halo effect, recency effect influence the performance review process. No employee would love that, and they would want to prove their productivity and behavior at work. In these kinds of cases, 360 degree feedback will come to the rescue.  

It is the feedback process where the peers, direct reports, managers, and other stakeholders who are involved in your work can comment on your performance, behavior, and skills. This feedback framework ensures a fair and unbiased performance appraisal process. (Yes, the feedback is anonymous and confidential. So, you can give your honest thoughts even about your manager).  

Reviews and Recognition 

Recognizing someone’s efforts should not happen just once in a year or after a quarter. When someone exceeds your expectations and performs extraordinarily, you should appreciate instantly and reward them if you have a customized award or points for your business, which the employee can redeem later. 

Recognizing someone’s hard work need not necessarily be some grand event, even a small thank you note or emails or offering lunch would do. This is part of an effective performance management system because if a proper Reward and recognition plan is not in place, it would affect an employee’s productivity and engagement rates greatly. The employees should feel cherished for your business to prosper.  

Rewarding an employee motivates him/her to continue the performance level and push the other employees to do better. Besides, it is a message to the workforce that their management appreciates their every single action and it is in the reaching distance. 

Training Recommendations and Development Plans 

Through the various processes of an effective performance management system, a manager would have learnt the areas where the employees should improve and excel to further grow in their respective fields. Those recommendations should be made by the managers, and also the HR department should focus on conducting training programs and creating a roadmap for the employees’ development to help the workforce enhance their skill set. 

Adopting performance management software that incorporates all these processes would create a great positive impact on the organization’s overall productivity