A Performance Management System is the glue that bonds employee performance to a company’s mission. When fully leveraged, it aligns employees at every level with the organization’s key business goals.
Just how should a Performance Management System used? Let’s break down a company’s annual cycle into three major sections that together provide the framework to gain employee commitment, align them with the company mission, and measure both individual and bottom-line results.
STEP 1: Setting Expectations
- CEO and/or board finalizes the strategic direction and goals for the coming year
- CEO communicates the organizational goals to all direct reports
- CEO meets one-on-one with all direct reports to reach agreement on their department or division goals and priorities for the coming year
- Division or department manager meets one-on-one with all direct reports
- Front line manager meets with all direct reports to discuss and finalize their individual goals for the coming year
STEP 2: Coaching and Feedback
- Conduct a mid-year review after six months with employees
- Review performance to make sure goals are being met
- Offer coaching and feedback in a timely manner
- Make sure feedback and coaching are effective
STEP 3: Year-End Review
- Providing regular coaching and throughout the year will avoid surprising feedback
- It’s critical that team’s performance mirrors individuals
- Keep Performance Management simple so its effective
- Long-term viability and profitably will be your results
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