Today's organizations are changing up their performance management processes and systems. Many are changing due to the increasing difficulty of executing performance management effectively. More notably, effective talent management is becoming exceedingly important, and effective performance management can play a vital role in its success or failure.
Here are our top three important performance management features of an effective performance management system that are often forgotten..
The first important feature is support; support throughout all levels of organization by high level executives. "Role modeling" needs to begin at the top of the organization and appraisals need to trickle down to all members of the organization. This can’t be what the middle management does to people at the bottom of the organization, it also needs to be an important part of the strategic management processes of the entire organization.
The second forgotten feature is that there is no emphasis on forecasting clear performance goals. Again, one of the most important determinants of performance management effectiveness is the setting of performance goals. When individuals set performance goals, particularly reward based goals, they immediately become more motivated to perform well.
Lastly, and not forgotten is compensation; pay discussions should never take place jointly with reviews providing feedback about performance, training, or development. When discussions on performance are mixed with conversations of compensation, individuals focus too hard on the pay and walk away only considering the pay discussion. Individuals do not process issues about performance and development, and do not recall nor feel committed to the performance feedback that was just discussed when money is on the mind.
Final point: the goal of performance management shouldn't be to make everyone happy; it should be to motivate and inform employees in the organization.