What is performance?
Performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. Performance management is a whole work system that begins when a job is defined as needed. It ends when an employee leaves your organization.
Many writers and consultants are using the term “performance management” as a substitution for the traditional appraisal system. I encourage you to think of the term in this broader work system context. A performance management system includes the following action.
Definition of Performance Management
An effective performance management system aligns individual performance with the organisation's mission, vision and objectives. - American Compensation Association (1996)
Characteristics of an ideal performance management system
The strategic goals of the organisation should be linked to the goals of individuals and teams.
If your evaluation criteria and methods are not standardized, you cannot say that you use them to hold your employees to a "standard." The aspects of performance that you measure must be uniform, and you must strive to maintain a constant level of strictness. Varying your level of strictness or your methods will only lead to your employees lacking faith in their managers and in the system itself.
Validity and Conciseness
Performance management systems should only measure what is valid to the tasks at hand. Less is often more when it comes to selecting evaluation criteria. If you are evaluating customer-service representatives in a call center, do not evaluate them on their ability to operate heavy machinery.
Make sure that you are not evaluating your employees in an illegal manner. Consult an attorney before employing a questionable method of evaluation.
As with criminal investigations, if employees receive sub-par evaluations, give them the chance to defend themselves. Make sure that management adequately informed them of expectations, that the company provided them with all necessary resources and that there is no mistake in the evaluation. Even in cases where employees are performing at an unacceptable level, allow for redemption and reform.
Proper Training for Evaluators
No performance management system can succeed when those carrying out evaluations are inadequately trained. Make sure that your evaluators fully understand the responsibilities of those whom they are evaluating. Have them work in that capacity for a short time if necessary. When possible, have those who have proven their ability to work well in that capacity perform the evaluations.
No Bias of Reward
Do not reward evaluators for finding negative or positive results, as this will skew their evaluations in either direction and lead to distrust between your employees.