Performance management – refining the art of employee recognition and reward
Although there are many complex facets and approaches to performance management (PM) and its implementation, PM can be defined as a strategic and integrated approach used to increase the effectiveness of companies by improving the performance of the people who work in them – as well as by developing the capabilities of teams, systems and individual contributors within organisations.
Traditionally, as each year draws to an end, most businesses recognise and reward their employees for their commitment and dedication by handing out year-end bonuses. While this practice does much for overall employee morale, sending out a positive message of appreciation, are these bonuses an accurate reflection of each employee’s individual performance or accomplishments – and, more importantly, have the goals and objectives set out by your organisation at the start of the year been achieved?
With this in mind, it may be worthwhile to review how or why you pay out double cheques in December each year. Are your bonuses an accurate reflection of individual performance – or are you just showing your appreciation for your employees’ service? If it’s the former, did you clearly outline the annual goals and objectives of your organisation – along with each team member’s performance guideline to help achieve yearly targets and subsequent year-end rewards? And, if it’s the latter, were your internal communications clear about the fact that this is a once-off gesture based solely on appreciation?
Like everything else you do across your company, it’s important that performance management and year-end bonus systems are carefully, and strategically, incorporated into your business plan and annual objectives. If they are not, aside from setting a precedent of entitlement and mismanaged expectations around year-end bonuses, you could actually damage employee morale during the most important and potentially lucrative retail trading period of the year.
While most of the practices I’ve worked with have had a system of performance management in place to recognise and reward staff, I have, however, noted confusion and inconsistencies when it comes to the practical implementation of performance management systems – which, incidentally, should be very specific to your organisation.
Therefore, to ensure you have an effective performance management plan in place, it’s important to clearly define your unique performance strategy from the outset each year, choose your system of recognition and reward, set clear goals and objectives – and effectively communicate all of this to each member of your team to avoid tough challenges, confusion and unprofitability down the line.
In terms of equating or measuring performance, feedback is the corner stone to any performance management system; not only between employers and employees, but from outside input obtained from peers, clients and colleagues, ultimately helping you to form an accurate and comprehensive perspective of performance across your entire organisation.
It’s also vital to bear in mind that reward and recognition must consider the entire year’s performance, based on a series of conversations conducted throughout the year and not just the month before bonuses are paid (a common mistake made at the busiest time of the year!) to ensure that objectives and performance remain on track. Typically, when it comes to calculating performance throughout the year, value should be assigned to skill assessment, experience and competency – done well it will accurately reward those who work hard within your company and inspire and incentivise those who are still developing.
Against the backdrop of today’s tough economic times, we’ve all had to adjust our spending and review our expenses – both as individuals and businesses. The year-end is, however, a time when people relax their purse strings, anticipating slightly earlier remuneration and a little something extra from their employers – so it’s essential to act responsibly and manage these expectations in a clear and upfront manner from the beginning of the working year.
Remember, the key to successful performance management is effective communication -consistently connecting with your staff in a clear, relevant and credible manner – which ultimately fosters higher staff morale, increased efficiency and business success!
Do you want to find out more about successful performance management?
If you’d like some more advice on how to effectively establish and implement a performance management system that not only recognises your best people but also develops your team and grows your business, get in touch with Vizibiliti Management Services today.
Vizibiliti Management Services – Success is in sight!
BY ALISON MAYTHAM
“There are many different factors that determine the success of your practice – but, as a busy healthcare professional focusing on the needs of your patients, you may not always have the time to focus on the many demanding, and often complex, facets of managing your business. Vizibiliti provides you with easy access to insightful, comprehensive practice and business management solutions and advice across all stages of your business journey – from establishing, growing or closing your practice.”