Performance Management – Setting Goals and Measuring Success

Performance management should be an ongoing process that provides a mechanism for setting specific goals for employees; monitoring their achievements; and giving feedback on how they are performing, measuring their results, and helping to maintain direction. A performance management system should be designed to support employees in fulfilling the employer’s expectations; motivate employees to achieve the goals; and provide an avenue for career development.

When employee goals are aligned with the goals of your business, this is a key to engaging employees in the work as well. Done right, your employees and your business will be even more successful because of it.

Goal Setting

Setting goals is an important facet of performance management, as it helps the employee understand management’s perception of where he or she needs to be and allows both parties to identify problems before they escalate.

Goals should be consistent with employees’ work responsibilities and company goals, while allowing for employee performance that is reasonably possible, considering their skill set, resources, work load and workload. For example, a salesperson might set an aggressive yet attainable sales objective to increase total unit sales by 8 per cent per week to achieve results.

Goals must also be SMART – Specific, Measurable, Attainable, Relevant and Time-Bound, so employees have a clear picture of what should be accomplished and owners can give some specificity as to how soon the employee should get there. In addition, the deadlines ought to be SLIGHT – Specific, Limiting, Agreed-upon, Influencing, Time-limited – and produce the possibility of incentives and penalties to encourage employees to do all they can to meet them.

Measuring Success

It’s not enough to set SMART goals and track short-term progress: performance metrics can also be used to assess outcomes. If the numbers tell you that a particular area needs more attention, the next step is to address that via training of existing staff, or hiring new people to help.

One way to measure success was by the length of time a employee stayed on; if they remained longer than the expected length of service then they tended to enjoy what they did and were good at it. On the flipside: what happens when someone leaves before their contract runs down? They might have felt undervalued or underappreciated by management.

An effective performance management system is a continuous cycle of planning, monitoring, reviewing and evaluating that helps company objectives be achieved by aligning employees’ goals with strategic business goals. A progressive system replaces the dreaded annual review process by encouraging managers and employees to have an ongoing series of real-time conversations. It also fosters peer and upward feedback that aids in learning and development – the brave new world of performance management to breakthrough business performance and help your people reach their full potential.

Feedback

Feedback should be a two-way conversation; employees needs doses of affirmation as well as suggestions on how they can get back onto track so that they can work efficiently.

‘Goal setting’ is part of performance management, in which managers and staff set SMART (specific measurable attainable relevant timebound) goals related to the broader company aims and goals, which helps employees to see their contribution to the overall company success, which in turn facilitates their engagement and motivations.

Performance management processes create check points that let managers identify problems early in an employee’s tenure before they fester into larger problems. For example, if an employee is not meeting sales quotas, setting lower targets along with supporting training/coaching can help put the employee back on track more easily than having to let someone go. Performance management processes that are executed well can lead to real business benefits such as lower absenteeism, higher productivity/customer satisfaction scores, improved financial results, and higher employee retention, among other things.

Rewarding

A key part of the performance management process is the setting of clear, measurable goals, which are used both for individual and team goals, with these personally oriented goals cascading down from organisation-wide objectives so that everyone understands what they are accountable for.

Such a measurement system also encourages regular check-ins and reviews so that managers and employees can raise stumbling blocks in advance. The check‑ins also make possible a cycle of planning, measuring, feedback and training that can consistently close the loop and deliver results.

For example, a sales-conversion metric might highlight opportunities to improve current employees’ product or sales training by sending them to a workshop, or suggest changing a process for completing the sale. An increase in employee engagement might indicate that your people are ready to develop new skills or that your performance management processes are hitting the mark. Research industry best practices and trends to keep your strategy relevant – it will help you keep your competitive edge and deliver on the promise of performance improvement.