Performance Management – Navigator of a successful business
The present situation on the market, followed by periodical oscillations continually influences business dynamics. Consequently, achieving and keeping the status of a successful and competitive company requires a periodical revision of methods and perspectives. Innovative solutions and practices are being introduced to modern businesses in order to adjust to market trends.
One of the perspectives, which suffered significant changes, that provides continuous monitoring of the company’s position on the market is performance appraisal. The focus can be on the individual (employee) or organizational level. Traditional performance appraisal in form of an annual meeting with the Manager is becoming inefficient and, in some cases, even demotivating type of employee evaluation.
Employers are facing a challenge to create innovative solutions to track company success through monitoring employees’ performance. Performance Management represents one of the tools in a process of tracking the success and development of an individual and even a company. Performance Management is a process that implies a holistic approach to management. It covers every aspect of the business – from the appraisal of individual results to organizational culture. The aspect which differentiates this form of monitoring from the conservative one is continuity. The implementation of the mentioned process includes several segments.
Strategy – from the base to the top
In the initial stages of business development, companies create strategic goals that often do not comply with business practices and possibilities. Also, most of the employees are not familiar with them. On the other hand, a complex and well-known strategy can be full of unclear and undefined goals. Therefore, it is necessary to create a simple strategy with well-defined goals and make it available to all the employees. Transparent communication of mutual interests and goals is the key to achieving them. The strategy allows us to focus on success.
KPI – good job indicators
The concept of Key Performance Indicators has been known for a long period. It is widely used as a guide to the desired goal in every business segment. The goal of key indicators connected to the business strategy is to provide us with a clear picture of how to achieve set goals. A possibility of tracking and measuring is the main characteristic of strategically based KPIs. Assistance in creating relevant KPIs can be provided through KPQ – key performance questions. By asking the questions „Which data should be collected? “ and „How to collect them? “, the process of creation will be much easier. Objective monitoring of organization state, departments, projects, and employees will allow us to make the best possible decisions regarding further business plans. Besides that, experiences we have perceived, evaluated, and recorded will facilitate our development. Adequate KPIs will be used as GPS – it will show us where our business is at this moment and where it should be.
Feedback – shortcut to the top
During the process of evaluation and appraisal, it is important to communicate with your employees, managers, and stakeholders transparently and provide them with accurate and precise feedback. Everyone involved in the business contributes to success. It is crucial to inform each of them about the impact of their work on the company’s progress – even if the impact is negative. Along with the assessment of the quality of work, suggestions for the development of each employee should be made. The goal of the feedback is to provide information about achievement, but its great value is found in the possibility of using that information for further development of specific competencies and skills of employees. Besides that, it can be used to improve the current methodology and process of work. This is exactly the main difference between Performance Management and traditional appraisal.
Timely and accurate feedback affects employees’ motivation and achievement, and consequently brings prosperity in all aspects of the organization.
Revision – success needs changes
The importance of changes in the labor market has been mentioned several times, as well as the timeliness of business activities that determine the quality of work and the possibility of progress. Performance Management allows us to monitor all changes that happen to us. Timely reaction in the form of revision of KPIs, and sometimes the strategic goals themselves is the key to success in modern business. The advice is to revise all processes, methods, and goals of work if the organization encounters a challenge – whether it is a change at the level of the local or global market. and goals of work if the organization encounters a challenge – whether it is a change at the level of the local or global market.
Performance Management has been continually improving in everyday business. International companies constantly work on its improvement and increasing the flexibility of use in different industries and businesses. Highly cost-efficient and adaptable, it represents an available asset to any organization. The key factors to a successful performance management system are a commitment of human resources and persistence in following the required steps.