What is Performance Management System?
A performance management system is a technologically driven process for tracking the performance of employees consistently and measurably. With a Performance Management System in place, it ensures that employees and departments across the company are working effectively and in collaboration towards achieving the organisation’s strategically defined goals. As a result, employees are better aligned with corporate goals.
What are the basic components of Performance Management Systems?
Performance Management Systems number in plenty. Most have different components built into them. Here are a few basic ones:
1. Past performance details
Reviewing past performance details allows managers and employees to take a look at achievements and view current performance in context. It shows how they have performed in their role and helps in setting objectives for the year.
2. Feedback mechanisms
An ideal Performance Management System includes a 360-degree feedback mechanism for capturing data on employee performance.
3. Ratings and scores
Assign ratings to your team’s performance. A good Performance Management tool will enable businesses to customize these options to fit in with their existing performance scoring process.
4. Development plans
Development plans enable employees and managers to map out the expectations towards their work and what they should achieve in the future. The Performance Management System also gathers information about potential future training needs, promotional opportunities, or other development related topics.
Benefits of a Performance Management System?
Switching an organisation’s existing processes to a Performance Management System can make the process more efficient, along with these other benefits:
1. Better consistency across the performance management process
By maintaining a single system to track employee performance, employers can make sure that they are tracking the same metrics across the organization.
2. Identify high performers and training needs
Transparency in the system clearly shows which employees are performing the best, and identifies where training gaps exist.
3. Review training effectiveness
Employers can also identify how well a training course impacted an employee’s performance over a certain period.
4. Increased employee motivation and morale
Employees begin to feel more engaged when they know their organization cares about their performance and they get consistent feedback.
5. Better employee retention
Linking performance to corporate or individual goals gives employees a reason to prove their grit and another reason to stay.