Performance Management – Definition
Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization. The communication process includes clarifying expectations, setting objectives, identifying goals, providing feedback, and reviewing results.
Managing Employee Performance – The Cycle
Overseeing performance and providing feedback is not an isolated event, focused in an annual performance review. It is an ongoing process that takes place throughout the year. The Performance Management process is a cycle, with discussions varying year-to-year based on changing objectives.
The cycle includes Planning, Checking-In, and Review.
To begin the planning process, the employee and the manager review overall expectations, which includes collaborating on the development of performance objectives. Individual development goals are also updated. manager employer then develops a performance plan that directs the employee’s efforts toward achieving specific results to support organizational excellence and employee success.
Goals and objectives are discussed throughout the year, during check-in meetings. This provides a framework to ensure employees achieve results through coaching and mutual feedback.
At the end of the performance period, the manager reviews the employee’s performance against expected objectives, as well as the means used and behaviors demonstrated in achieving those objectives. Together, they establish new objectives for the next performance period.
Components of Performance Management System
Any effective performance management system includes the following components:
Performance Planning: Performance planning is the first crucial component of any performance management process which forms the basis of performance appraisals. Performance planning is jointly done by the appraisee and also the reviewee in the beginning of a performance session. During this period, the employees decide upon the targets and the key performance areas which can be performed over a year within the performance budget., which is finalized after a mutual agreement between the reporting officer and the employee.
Performance Appraisal and Reviewing: The appraisals are normally performed twice in a year in an organization in the form of mid reviews and annual reviews which is held in the end of the financial year. In this process, the appraisee first offers the self filled up ratings in the self appraisal form and also describes his/her achievements over a period of time in quantifiable terms. After the self appraisal, the final ratings are provided by the appraiser for the quantifiable and measurable achievements of the employee being appraised. The entire process of review seeks an active participation of both the employee and the appraiser for analyzing the causes of loopholes in the performance and how it can be overcome. This has been discussed in the performance feedback section.
Feedback on the Performance followed by personal counseling and performance facilitation: Feedback and counseling is given a lot of importance in the performance management process. This is the stage in which the employee acquires awareness from the appraiser about the areas of improvements and also information on whether the employee is contributing the expected levels of performance or not. The employee receives an open and a very transparent feedback and along with this the training and development needs of the employee is also identified. The appraiser adopts all the possible steps to ensure that the employee meets the expected outcomes for an organization through effective personal counseling and guidance, mentoring and representing the employee in training programmes which develop the competencies and improve the overall productivity.
Rewarding good performance: This is a very vital component as it will determine the work motivation of an employee. During this stage, an employee is publicly recognized for good performance and is rewarded. This stage is very sensitive for an employee as this may have a direct influence on the self esteem and achievement orientation. Any contributions duly recognized by an organization helps an employee in coping up with the failures successfully and satisfies the need for affection.
Performance Improvement Plans: In this stage, fresh set of goals are established for an employee and new deadline is provided for accomplishing those objectives. The employee is clearly communicated about the areas in which the employee is expected to improve and a stipulated deadline is also assigned within which the employee must show this improvement. This plan is jointly developed by the appraisee and the appraiser and is mutually approved.
Potential Appraisal: Potential appraisal forms a basis for both lateral and vertical movement of employees. By implementing competency mapping and various assessment techniques, potential appraisal is performed. Potential appraisal provides crucial inputs for succession planning and job rotation.
Employee Development
Individuals in an organization form its vital resource and must be valued, nurtured and retained. Employees are the most valuable assets and truly the backbone of an organization. Every employee in his/her own way contributes towards the success or failure of an organization. Without employees in an organization, even the most powerful machinery with the latest technology would not function.
Employees should not treat their organization as a mere source of earning money. Remember, your job is not just to come in the morning, leave in the evening and receive your paycheck. On the other hand employers should not treat their employees as slaves. Employers must invest their time and resources in training and developing their workforce for them to become indispensable resources later on. Employees should be developed and prepared to face even the worst situations.
What is Employee Development ?
Employee development is a joint initiative of the employee as well as the employer to upgrade the existing skills and knowledge of an individual. It is of utmost importance for employees to keep themselves abreast with the latest developments in the industry to survive the fierce competition. Believe me, if you are not aware of what is happening around you, even before you realize you would be out of the game. As they say there is really no age limit for education. Upgrading knowledge is essential to live with the changes of time. Employee development goes a long way in training, sharpening the skills of an employee and upgrading his/her existing knowledge and abilities. In a layman’s language, employee development helps in developing and nurturing employees for them to become reliable resources and eventually benefit the organization. Employees also develop a sense of attachment towards the organization as a result of employee development activities.
Organizations must encourage their employees to participate in employee development activities. Employees also must take skill enhancement or employee development activities seriously. Do not attend trainings or other employee development activities just because your Boss has asked you to do so. Don’t just attend trainings to mark your attendance. You just cannot use same ideas or concepts everywhere.
It is excellent if you know Microsoft Excel or for that matter Microsoft Word. Remember simply knowing few basic functions of MS excel would not help you in the long run. It might help you in the short run. Excel is not just to store your required data. There are many other formulae and advanced applications which one should be aware of.
Enhance your skills with time. Employee development can also be defined as a process where the employee with the support of his/her employer undergoes various training programs to enhance his/her skills and acquire new knowledge and learnings. Every organization follows certain processes which not only help in the professional but also personal growth of an employee. Employee development activities help an employee to work hard and produce quality work.
Examples of Employee Development Activities
Professional Growth
Employee development activities must be defined keeping in mind an employee’s current stage and desired stage. Knowing an employee’s current and desired stage helps you find the gaps and in which all genres he/she needs to be trained on. Human resource professionals must encourage employees to participate in internal or external trainings, get enrolled in online courses to increase their professional knowledge and contribute effectively.
Personal Growth
Employees start taking their work as a burden only when an organization does not provide any added benefits or advantages which would help in their personal growth.
Soft skills classes, fitness sessions, loans with lower interest rates are certain initiatives which not only motivate an employee to do quality work but also help in employee development.
Employee development not only helps in enhancing knowledge of employees but also increases the productivity of organizations. Employees, as a result of employee development activities are better trained and equipped and work harder to yield higher profits.
Employee Separation
“Separation of employment” refers broadly to the process of managing the termination of employment, whether involuntary (such as discharge, layoff, plant closure, disability or death) or voluntary (such as resignation, job abandonment or retirement).
Types of Separation
Resignation
Resignation is a voluntary act initiated by the employee to end employment with [Company Name]. It is requested that the employee provide a minimum of two weeks’ notice prior to the employee’s last day at [Company Name]. If an employee does not provide advance notice or fails to actually work the remaining two weeks, the employee will be ineligible for rehire and will not receive accrued benefits. The resignation date must not fall on the day after a holiday.
Retirement
An employee who wishes to retire must notify his or her department director and the HR department in writing at least one month before planned retirement date.
Job abandonment
An employee who fails to report to work or contact his or her supervisor for three consecutive workdays will be considered to have abandoned the job without notice, effective at the end of the employee’s normal shift on the third day. The supervisor should notify the HR department at the expiration of the second workday and initiate the paperwork to terminate the employee. Employees who are separated due to job abandonment are ineligible to receive accrued benefits and are ineligible for rehire.
Termination
Employees of [Company Name] are employed on an at-will basis, and the company retains the right to terminate an employee at any time.
Reduction in workforce
An employee may be laid off because of changes in duties, organizational changes, lack of funds or lack of work. Employees who are laid off may not appeal the layoff decision through the appeal process.
Release
Release is the end of temporary or seasonal employment.
Out-Processing
Return of property
The separating employee must return all company property at the time of separation, including uniforms, cellphones, keys, laptops and identification cards. Failure to return some items may result in deductions from the employee’s final paycheck. An employee will be required to sign the Wage Deduction Authorization Agreement to deduct the costs of such items from the final paycheck.
Exit interview
The separating employee must contact the HR department as soon as notice is given to schedule an exit interview. The interview will be on the employee’s last day of work or other day, as mutually agreed on.
Termination of Benefits
An employee separating from [Company Name] is eligible to receive all of the benefits described below as required by law or as long as the employee follows the procedures described in this policy.
Vacation leave
Accrued vacation leave will be paid in the last paycheck.
Sick leave
Accrued sick leave will be paid in the last paycheck.
Health insurance
Health insurance terminates on the last day of the month of employment, unless the employee requests immediate termination of benefits. Information about COBRA continued health coverage will be provided. Employees will be required to pay their share of the dependent health and dental premiums through the end of the month.
Rehire
Former employees who leave [Company Name] in good standing and who were classified as eligible for rehire may be considered for reemployment. In such cases, the former employee must submit an application to the HR department. A former employee must meet all minimum qualifications and requirements of the position, including any required qualifying exam.
Supervisors must obtain approval from the HR director or designee prior to rehiring a former employee. A rehired former employee’s previous tenure will not be considered in calculating longevity, leave accruals or any other benefits.
Ineligibility for Rehire
An employee who is terminated by [Company Name] for violating policy or who resigned from [Company Name] in lieu of termination from employment due to a policy violation will be ineligible for rehire.
What is Employee Retention ?
Employee retention refers to the various policies and practices which let the employees stick to an organization for a longer period of time. Every organization invests time and money to groom a new joinee, make him a corporate ready material and bring him at par with the existing employees. The organization is completely at loss when the employees leave their job once they are fully trained. Employee retention takes into account the various measures taken so that an individual stays in an organization for the maximum period of time.
Why do Employees Leave ?
Research says that most of the employees leave an organization out of frustration and constant friction with their superiors or other team members. In some cases low salary, lack of growth prospects and motivation compel an employee to look for a change. The management must try its level best to retain those employees who are really important for the system and are known to be effective contributors.
It is the responsibility of the line managers as well as the management to ensure that the employees are satisfied with their roles and responsibilities and the job is offering them a new challenge and learning every day.
· Employee retention strategies:
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Onboarding and orientation — Every new hire should be set up for success from the very start, from the first day of work to the first week and beyond. The job orientation is just one component of onboarding, which can last for weeks or months, depending on your organization. Aim to develop an onboarding process where new staff members not only learn about the job but also the company culture and how they can contribute and thrive, with ongoing discussions, goals and opportunities to address questions and issues as they arrive.
· Mentorship programs — Pairing a new employee with a mentor is a great idea for onboarding. New team members can learn the ropes from a veteran with a wealth of resources, and the new hire offers a fresh viewpoint to experienced staff. Mentors shouldn’t be work supervisors, but they can offer guidance and be a sounding board for newcomers, welcoming them into the company culture.
· Employee compensation — It’s absolutely essential in this competitive labor market for companies to offer attractive compensation packages. That includes salaries, of course, but also bonuses, paid time off, health benefits, retirement plans and all the other perks that can distinguish one workplace from another. Every employee should have a full understanding of all the benefits they receive from the organization.
· Recognition and rewards systems — Every person wants to feel appreciated for what they do. A habit should be made to thank the direct reports when they go the extra mile, whether it’s with a sincere email, a gift card or an extra day off. The hard work of the employees should be appreciated. Some companies set up rewards systems that incentivize great ideas and innovation, but a company can institute recognition programs even on a small team with a small budget.
· Work-life balance — What message is your company culture sending? If staff are expected to regularly work long hours and be at the company’s beck and call, the company is likely run into issues with employee retention. Burnout is very real. A healthy work-life balance is essential, and people need to know that management understands its importance. The staff should be encouraged to take vacation time, and if late nights are necessary to wrap up a project, late arrivals if possible should be offered or an extra day off to compensate and increase job satisfaction. Many companies offer telecommuting or flexible schedules to improve work-life balance for their employees.
· Training and development — In any position and industry, professionals want the possibility for advancement. Smart managers invest in their workers’ professional development and seek opportunities for them to grow. Employees should be asked about their short- and long-term goals to determine how the company can help achieve them. Some companies pay for employees to attend conferences or industry events each year, or provide tuition reimbursement or continuing education training.
Communication and feedback — Keeping open lines of communication is essential for employee retention. Your direct reports should feel that they can come to you with ideas, questions and concerns, and likewise, they expect you to be honest and open with them about improvements they need to make in their own performance. Each staff member should be connected with on a regular basis — don’t let issues build up for the annual review.
· Dealing with change — Every workplace has to deal with unpleasant changes occasionally, and the staff looks to leadership for reassurance. If an organization is going through a merger, layoffs or other big changes, the staff should be kept informed to avoid feeding the rumour mill. Fostering teamwork — When people work together, they can achieve more than they would have individually. A culture of collaboration should be fostered that accommodates individuals’ working styles and lets their talents shine. This can be done by clarifying team objectives, business goals and roles, and encouraging everyone to contribute ideas and solutions.
· Team celebration — Celebrate major milestones for individuals and for the team. Whether the team just finished that huge quarterly project under budget or an employee brought home a new baby, seize the chance to celebrate together with a shared meal or group excursion.
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