by Patti Cabantug, MBA Student

Performance Management is a method used to measure employees’ work performance across all levels, from top management down to rank-and-file employees. The rationale of conducting a performance review is to monitor and correct the efficiency and effectiveness level of the employees for the company to achieve optimum productivity. There are two parties involved in performance appraisal, the rater and the ratee.

Performance management as a system will enable the company to create a training needs direction or design a training program for the employees using the annual performance review. As such, this will help develop the employees to attain the company’s goals and help managers create a workable environment for employees. By having good performance management, the company shall create criteria and metrics to measure employees’ work execution.

Dynamic performance management will help develop the employees’ potentials, set goals to be achieved, and will present feedback to employees who will complete the whole process of the appraisal. Most companies conduct the appraisal at least once a year for permanent employees but more than once for the project-based and probationary employees, which will be the basis for renewal of the contract or conversion to permanent status. The number of Performance Management reviews will depend, of course, on the nature of work and the organization. This will also assist HR in deciding whether to develop, retain, promote, or convert employees’ employment status.

Performance Management is very important for all organizations, whether Marketing, Production, or Service entities. This is the only way to know what, how, and why employees are doing in the company. This program will give the supervisor the idea as to what strengths and weaknesses possessed by their staff. Moreover, this will provide feedback on what areas need to be developed as part of the interventions to improve employee’s performance. This will also give a hint for providing incentives or promotion to employees and, in some cases, transferring employees to an area where they are suitable to work.

Talent Management is a vital part of every organization. Still, it is confronted with problems such as keeping employees engaged in work, retaining talented or knowledgeable employees, and developing their potentials to become future managers. In keeping employees engaged, goals are articulated at the beginning of the year, and after a year, they are evaluated whether achieved or not. The time element involved is quite tricky when there is no feedbacking, which is quite challenging. Some study shows, 94% of the employees prefer to have timely feedbacking, while 81% prefer quarterly feedbacking.

Traditional Performance Management focuses on process rather than employees, formal and done periodically, separate from work, and has only 3-5% impact on work performance. On the other hand, Everyday Performance Management focuses more on employees rather than the process, relatively informal and on-going as the need arises, conducted as part of the work, and has a higher impact on work performance by 39%.

Employees’ performance is good if feedbacking is done monthly or quarterly to check when work issues are solved and to adjust goals when deemed necessary for any condition. This will be a good way to remind the employees of the set goals, which will deliver at least above-average financial performance by at least 50%.

According to a certain study, employees have undesirable feelings about the annual performance appraisal. 62% of the respondents said that the performance appraisal is somehow incomplete. 48% are uncomfortable about raising the issues with their boss during the process of evaluating performance. 61% felt that the process of conducting performance reviews is obsolete. 74% said they are more effective when there is frequent feedbacking. 68% of the superiors are not aware of employees’ pressing problems unless there is a performance review. All these downsides contribute to problem-solving failures, decreased level of performance, and engagement.

Targets of Employees Engagement are as follows:

1. Because of increased employee engagement, problems are resolved such as absenteeism, employee turnover, shrinkage of the manpower complement, employees and patients safety incidents, reduction of service or product quality by at least 25%. And in return, good customer experience in terms of services, productivity, and profitability of the company are improved.
2. Employees remain with the company when there are constant performance appraisal review and feedback and are granted the needed training. When employees are being developed professionally, assisted by management to meet their goals, and are rewarded due to their excellent performance, they work harder and stay with the company because of their excellent performance.
3. Raising and developing employees as potential leaders due to collaboration between managers and employees. The high cost of recruiting and training/developing new employees is high compared to retaining employees. Employees who are performers are assets of the organization and are honed to be potential leaders. Investments in training these employees are not lost but provide more benefits to the company. A good leadership path provides incentives and a good compensation package.

Good performance management’s purpose and goals provide a vibrant and steady system to improve both the employee and company productivity level. The system provides the avenue to success that allows a measure of performance with constant feedbacking provide for training and development prospects.
Performance management with adequate feedbacking provides a hint to managers to understand how their employees are functioning and monitoring their performance while meeting the objectives of the company.

Performance Management Objectives

The main objectives of performance management are as follows:

1. Develop a clearer vision about the role of each employee;
2. Intensifying engagement of employees;
3. Develop leadership and coaching skills of employees;
4. Augmented productivity due to the good performance of employees; and
5. Development of rewards system that provides incentives for overperforming employees.

There are a lot of benefits in good performance management for both managerial and rank-and-file employees which will benefit the company as well. A work environment that adequately provides for both the employees and customers engagement generates 240% worthy results, as follows:

1. Precise roles and performance models make the hiring process easier for new employees because they are aware of what is being expected of them in terms of work performance. As such, HR will be able to know if the applicant is suitable for the position being applied for;
2. Defined roles and standard makes training undemanding because it provides ample information on the training needs of the employee and identifies less essential information for the position;
3. Consistent development and review of goals assist in meeting the needs of the volatile labor market without reference to the size of the organization;
4. Explicit expectations and roles will provide a good stepping stone to achieving success;
5. Companies who invest in the success of the employees will indeed retain them;
6. Constant feedbacking and coaching by their managers will improve employees engagements up to becoming a skilled manager in the future;
7. When employees skills are developed, they are moving up in their career path;
8. Productivity improves employees’ skills and engagements and also provide a more straightforward path to meeting their goals; and
9. Employees are rewarded/recognized for their hard work as part of providing the right incentives.

Performance Management best practices which are highly considered as essential:

1. Let employees become aware of what they want to accomplish because it will help them achieve the goals;
2. Let the employees/ratee know what is expected of them, how to do it, and what results are needed;
3. Set goals vis-à-vis with clear performance plans so employees will not become overwhelmed by the expected results and be able to foresee the path in a clear perspective;
4. Review performance using the right metrics and analytics to make it easy to apply interventions when needed;
5. Constant coaching is needed to identify problem areas and provide solutions to the problems through periodic meetings;
6. Guidelines must be established as employees go through the performance management cycle. These guidelines must be specific to help them work better;
7. Shared strong values must be created and aligned with the culture of the company to develop a workable and collegial environment;
8. Organize workshops involving employees from different departments and units to know how they understand work and identify their strengths and weaknesses. This will help them discover something and establish a new connection that they need when the time comes;
9. Feedback must be given to employees in a very constructive manner to encourage positive actions;
10. Feedbacks must focus on the behavior rather than characteristic, more on the professional level rather than personal;
11. Training programs must be designed for both managers and employees;
12. Take advantage of the different sources of feedback;
13. Planning coaching and rewarding employees are equally important with performance review;
14. Always remember that problems emanate from external sources and not always from employees;
15. Recognize and reward employees more often in public to motivate them and also others who are underperformers.

Real-world examples for good performance management; these companies are:

1. Google -rely on data analysis and rewards managers
2. Facebook -put more emphasis on peer evaluation and feedbacking
3. Cargill – focus on positive relationship and feedback between managers and subordinates
4. Adobe – frequent appraisal and feedbacks are made while providing actionable guidance to provide leeway for managers
5. Accenture – provide continuous feedbacking for employees and focus on employees development

Performance Management versus Performance Appraisal

Performance appraisal is an integral part of the performance management program. The review focuses more on employees’ past work performance given a certain period by way of rating each criterion on how they perform their roles and how they meet their goals set by their boss.

Performance appraisal is a reactive formal evaluation based on parameters quantitatively set by the management. In contrast, performance management is proactive informal and a strategy that focuses more on improving the employee’s performance. Performance appraisal is operational and conducted yearly, while performance management is strategic, performed continuously.

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    This will help employees learn and grow. Employees will know what skills or other things they need to develop in order to be an effective employee to the company.

  2. Justin Myko Agpangan

    The article is really comprehensive and detailed in expressing the overview of performance management. I have learned so much in this article especially the part on feedback. Timely feedbacking is really important so that employees would know what areas they need to improve on before it’s too late. Most employees prefer that their team leaders brought up immediately things they did not do and things they did which are not satisfactory so that they could immediate correct and improve their actions. Furthermore, healthy relationship between supervisors and subordinates is a must so that they could communicate in an effective manner.
    In addition, I have experienced having a manager who is clear cut of what she expects of me, this made me know the direction and work that I need to do and I could plan ahead of time how I could use each day for work. It is really difficult when there is no goal and deadline that are set in the workplace. Failure to do so will just leave employees to be lazy thinking that they don’t have work to do. Also, I realized that corrective follow ups are essential when standards or deadlines are not met by the subordinates. Mentoring is really crucial in this aspect because some employees are really open and interested to learn and some are waiting instructions and suggestions from their superior.
    Clear vision about the role of each employee is really for me the main starting point of good performance management because without the vision, employees under you would be lost in their respective workloads. Lastly and importantly, rewarding employees for a job well done is the manifestation and supreme evidence that they really achieve the goals set upon them. This will motivate us more to do well and be reminded that our efforts won’t be put to waste.

  3. Rebecca S. Cabigo

    Performance Management is vital in a company not only for the rank and file employees but also for higher position employees. It is very beneficial to all employees to gauge the gap and to live with the standard based on the rules applies in a company. It is also beneficial to the company if everyone is cooperating because the company can achieve its goal and as a result, both parties, employees, and the company can benefit from the result.
    With the performance management, we can count the increase of employee engagement to work together with the goal of the company, knowing their strength and weaknesses and aiming to be better every year. It is also one way to motivate rank and file employees to strive hard to achieve their dreams to become leaders also in the right time. Considering as an asset of the company and appreciating one’s work is the number one motivating factor to every employee.
    Personally, I am challenged in “performance management”, doing my best to stay in a company, to contribute my talent, and to share your expertise at the same time hesitant on the feedback of others is what on my mind. But giving your best because you love to work and because expecting a good compensation is what motivates me to work with the standard on where I am now.

  4. Jerald J. Maglantay

    As a government employee for over two years in the Department of Education, I have seen how important it is to measure the performance of the teaching and non-teaching personnel primarily because we are public servants. We are seen as a cradle of excellence in terms of the work that we do.

    The government has its own Performance Management System that aligns to our philosophy, DepEd implements Result-Based Performance Management System. It is a shared endeavor between the superior and the employee that makes it an open discussion of job expectations. It provides a setting for agreement on standards of performance and behaviors which eventually usher to professional and personal growth in the institution.

    This kind of system which is result based drives more innovation, it creates an idea that your efforts and struggles to make the institution better will eventually lead you to your success, and that the department is making sure that your commitment and passion will not be overlooked.

    Just by reading and watching different videos on performance management has taught me a lot. That performance management is an integral part of ANY institution, whether if you are a government employee or a private employee. It enables the institution to make recommendations and plans in regards with the direction the company has to take.

  5. Hazel Love Y. Baya

    Performance management is important in company process by helping the management maximize its greatest asset, the Human Resource. Its cycle starts from the moment a job was needed and ends when the employee leaves the company. And it focuses on the development of the employees and the work assigned to them.

    Performance management lets your employees feel that they are part of the process in achieving the company’s goal. The open communication between the managers and the staff will make your employees feel appreciated.

    For me personally, I find it very useful when my manager constantly gives me feedback about my work performance and output. Because it lets me identify, by the help of my manager, areas where I do best and where are the areas that needs improvement. It helps me grow personally and I became aware of the consequences that my actions have. Along with the feedbacks, my manager guides me in the steps on how to improve the job that was assigned to me.

  6. Roland Feb Penas

    Let employees become aware of what they want to accomplish because it will help them achieve the goals. This is one of the objectives performance management would want to achieve. All employees whether from the top management (administration) up to the rank and file should have the knowledge on how they are performing in their respective field of expertise. It is also said that for a company to better their services, each employees must be aware and to identify their strengths and weaknesses. Thru this we will know if the set goals and objectives is attainable or not. Make your weaknesses your strength and your strength your weakness. Invest on the people in the company for it to achieve positive results.
    With the use of the dynamic performance management it will help develop the employees’ potentials, set goals to be achieved, and will present feedback to employees who will complete the whole process of the appraisal. It is also use to check if work issues are solved as well to adjust goals when deemed necessary Performance management is an important process in keeping the company afloat. It is a tool where the employees will become competent and effective. Feed backing is one of the most important factors in the organization. Leader should listen to their teammates so that the employee will be motivated and encouraged. Involvement of the employees in goal setting or any activities will also make them feel that they belong. It is also a tool in keeping our dedicated, talented and knowledgeable worker.

  7. Ryeo Venn Abellanida

    Many of the employees in every company or institution do not have a good job-fit, most of them do not fit well in their assigned tasks or most of them do not have a choice but to earn and they are not happy with their present job. Some may have taken the job as a means to survive or just simply have a job.

    A well-established Performance Management System will help the organization create a good-working environment and will allow each employee find a job suitable for them based on their skills and expertise. This system can identify the needs and concerns of each employee and will allow them to have a good career-path in the organization and way for management to identify potential leaders for promotion.

    A good system can allow employees to give honest feedback without fear from management. Some employees are afraid to give feedback especially to their direct supervisors or managers. It is important that the organization can receive positive or negative feedback from employees to know and identify the needs of each worker on how they are treated in the organization. Providing a good working environment and the needs of each employee cam result to increase job performance. Some performance evaluation may be subjected but having a good performance management system or program can provide an objective performance evaluation.

  8. Rowena Saylon

    Employees play a vital role in the operations of whatever types of entities. They are valued assets. Employees’ work satisfaction involves good compensation, self-development, and belongingness. Having an efficient performance management in a company means having an ideal work environment. Benefits and privileges such as trainings for career development and performance recognition of the employees are one of the best motivators on their work performances. Having the privilege of working in different institutions with different cultures and performance management approach, I can say that employees’ engagement can be influenced by how the managers handles the performance management.
    Constant communication of employer or manager and the employees is encouraged to maintain harmonious relationship in the workplace. Issues within an organization or department can be properly and promptly addressed. Common goals can be achieved smoothly through teamwork.
    Frequent performance appraisal assesses employees’ performance. It will also be an opportunity for both parties to collaborate ideas in creating strategies for achieving the organization’s goal.

  9. Henry L. Umadhay

    In my own opinion and definition of Performance Management is simply a process to improve the performance of any organization. Maybe in the process, in the people, in the output or achievement. During the appraisal time the manager can really extract a lot information from the staff or personnel being appraise. You can know really the difficulty or challenges he or she is facing in performing his or her job. You will know also if the staff or personnel is happy or satisfied with his or her present work. Or he meet the gap or not able to meet the job requirement. So that will be your basis of the training needs, or skills or upgrading. This will empower people to do work that will leads to the achievement of the organizational goals. In performance evaluation you will know of your personnel whom are in alignment to the corporate mission and vision and who are out of alignment. By this you will know how and what to addressed. I suggest that the organization should have the customized criteria and metrics. For technical performance it should rate by on the skills and achievement being realized. Because if you use the tools for nurses and for technicians it is not applicable and appropriate so separate or customized criteria and metrics will be used.
    Feedback mechanism should be in place. It is a way if the instructions or policies from top management to the rank and file is very clear and adoptable. Without which you will not know if the employee really understand what is required of her or him to follow or accomplished.
    Evaluation should be regular the ideal maybe every quarter but the minimum should at least twice a year.
    The after evaluation actions is necessary. Whatever findings the manager or evaluator have it should acted immediately if on the level of the department manager it can resolved the earlier. If it needs the HR intervention especially training gap it should be forwarded to the HR Director or to training and development office to be included in the future training. It should acted fresh from the oven, Meaning after you gathered all the feedback, complaints, concerns of your employee it should addressed right away so that people under you will not demoralized and that they will appreciate that their presence in the company is very much valued.
    There no such as permanent in this world. Everything changes so with people, leaders and managers. The succession planning should be in place. In each department or section should or eyeing staff as future leaders such as section heads and department manager. A good leadership should look into succession and not to monopolize the position in the fear of replacement. Many do not consider these because of the fear that any time there are capable of replacing them in their current position.
    Performance Management should focus both to process and people. There are times that the problems is with people. In evaluation if you derived that the majority of the concerns are about people then you addressed this one by one. If the majority of the concerns process then you review the current process and know where is the loopholes?
    For Feed backing communications lines for both parties should be open. That is why Performance evaluation should be regular so that current and pressing issues will be addressed right away. So that employee’s apprehension will be ease.

  10. Performance Management: An Overview (reaction)

    As what the definition of Performance Management says that it ensures that the goals are consistently met in an effective and efficient manner. With this regard, I believe these would really help my organization were I’m in right now.

    Our company started almost a decade ago and was formulated due to the fact that they want to promote healthy foods to the community. It started with few employees but that time without a council handling on it. But right now, we are under the Administrative Council composed of President, HR and a lot more. Unfortunately, they are on a voluntary basis, meaning, they have a major role on our mother institution that our company is just part of their role. The bad thing is, sometimes the policies and guidelines, even plans are usually taken for granted.

    As a manager and part of the council, I strongly recommend to re-model the organization as a whole, evaluate important part of the industry, improve those that are making the company progress. Unity is also a key in the management. The organization exists to accomplish a mission and communicating them to your employee will boost their morale. If words of affirmation are to be most effective, they must be given in the context of a positive, healthy relationship.

    Joey Yane

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