So, what are the key elements of performance management? The definition given by Wikipedia provides an apt overview: “Performance is a complex interrelated system of processes that involve feedback from employees, supervisors, customers, It also aims to create a work environment in which productivity is at its highest levels possible. The key elements of performance management include five key strategies:
1. Defining performance standards
Defining performance standards and achieving them is the first of the key elements of performance management. These standards should be identified as necessary for each individual employee according to their role and performance in the workplace. Once these standards have been defined, managers work to achieve them through the means determined by the standards by raising productivity, providing incentives for high performance, or simply by taking advantage of any opportunities that present themselves. Supervisors and leaders are expecting to work with employees to help them achieve these standards.
2. Monitoring performance
Monitoring performance is another of the five key elements of performance management. Monitoring can take various forms-through performance reviews (as part of the standard performance management process), team meetings, individual performance reviews (such as for specific projects or individuals) or comprehensive processes such as building and releasing performance indicators. Monitoring helps identify and correct problems before they become problematic. It also enables managers to set and achieve milestones for different processes and individuals, as well as identifying the progress and setbacks of particular projects.
3. Controlling and maintaining the performance management
Controlling and maintaining the performance management environment is another of the five key elements of performance management. Creating a work model that suits the needs of the organization and identifying the needs of the staff is one way to achieve this. Other methods may include training, financial incentives, rewards, penalties, and peer pressure. Managers may also need to rely on consultants to help them create and maintain good work models. These elements are particularly important if the organization is a small firm with limited staff and resources; it may be difficult to provide staff with the skills, education and development they require to create and maintain effective working environments.
3. Control performance
Control, however, is another of the five elements of performance management. There are many ways to control performance, ranging from formal controls (such as performance appraisal and reviews) to informal techniques such as encouraging employees to think strategically and explore new ideas. These elements are especially relevant for large and medium-sized firms, whose managers often have very few staff to collaborate and influence. Managing performance effectively requires the skill to establish appropriate goals and monitoring procedures and the commitment to evaluate the results obtained. Even when performance management is implemented at the rank level, there are still elements that need to be addressed.
4. Reward and Compensation
Do you require a carrot and a stick method to stress your dedication to the review process? As indicated, people tend to expect incentives – especially if they are performing above expectations. The following are some suggestions:
• A salary increase
• A yearly one-off bonus
• Shares in the company
• Seats on the board
• Extra holiday time
• Increased recognition amongst peers
Learning about the five key elements and steps of performance management will enable managers to manage performance more effectively. It is important for managers to consider each element in depth, as all of them have significant impacts on the overall performance of the organization. Learning about these key elements and how to incorporate them into the performance management process can help managers become far more effective in their positions.