Which of the following two components should be considered when evaluating employee performance?

This is an introductory article to Creating a Performance Management Process That Works, a guide we created together with Jason Lauritsen, HR expert and author of Unlocking High Performance. Want to get the most out of your performance management process? Download the free guide here.

There is no shortage of supposed “best practice” articles on the design of performance management processes. But increasing numbers of organizations are recognizing that how you measure, support, and reward performance is highly organization-specific.

Unfortunately, it’s not enough to ditch the annual performance review and hope for the best. You need a clear understanding of the core components of effective performance management and how these elements interact to unlock employee potential.

A framework for performance management

An effective process will address these three interlinked components:

Planning – do employees know what you’re evaluating?
Cultivation – creating the space for employees to bloom
Accountability – making performance a proactive process

What each of these elements looks like will be unique to your organization. But understanding them is crucial to helping your employees grow to high performance. Let’s look at these features in greater detail.

Planning – do employees know what you’re evaluating?

CIPD research found that the most central factor in how people respond to feedback is whether they see it as fair. Without knowing what is expected of employees and what they’re being evaluated on, fairness might be a big ask.

Setting out clear expectations is therefore crucial to the success of your performance management process. Likewise, it’s important that employees have the resources and know-how required to meet these communicated expectations.

Communicate expected behaviors and company values, and set clear goals. Managers could have dedicated conversations in 1:1s to identify development areas and workload management issues.

Cultivation – the missing piece

It’s unsurprising that the bell curve system, which focuses heavily on top and bottom performers, fails to be a source of motivation for the majority of employees. Enter the missing piece: cultivation.

An effective performance management process strives to cultivate employee growth. Just as farmers water their crops while removing barriers to their growth, performance management should allow employees to overcome challenges and fulfill their potential. This is rooted in an understanding of motivation and how work actually gets done.

Traditional performance management focuses on extrinsic motivators, such as reward, promotions, and merit increases. Research from Daniel Pink and others has highlighted that, particularly in knowledge-based and creative industries, intrinsic motivation is more effective in sustaining higher levels of employee performance.

Give employees a purpose in their role and help them to recognize how their work impacts the organization, its customers, and wider society.

Setting out clear development plans can also drive intrinsic motivation – consider promoting a culture of coaching across your organization. Note: Are your managers trained to play such a coaching role?

Praise and recognition are key to driving this cultivation culture. Whether private or public, recognition encourages a sense of progress, which is an intrinsic motivator highlighted in Kenneth Thomas’ research.

Accountability – making performance a proactive process

Traditional processes are often compliance-oriented. They aim to create a formal record of performance to decide who receives a bonus or promotion, and as evidence to inform terminations.

This is a worthy goal from an HR perspective. But many question whether this backward-looking, rigid, and seemingly arbitrary record accurately portrays the various ways in which employees contribute to an organization’s success.

Effective performance measurement moves away from this punitive process. It encourages proactive engagement from the employee in their ongoing performance and future development.

An effective approach to accountability recognizes that:

Contributions to success are multifaceted – and not always easily visible
Work is collaborative, and contributions might be hard to quantify
Employees need the opportunity to take ownership of their success while learning from experiences
Performance is happening all the time, not just once a year

Next steps

The three key interlinked components of planning, cultivation, and accountability offer you a framework to reflect on your performance management process.

Your organization might already be succeeding with some of the initiatives outlined above, but perhaps there are others you’d like to incorporate into your performance management process.

Together with HR expert Jason Lauritsen, we’ve developed an in-depth guide on the framework outlined above, to offer further insight on the practical implications of applying it in your organization. Decided that you need to revamp (or create) your process? With the guide, you’ll receive a handy planning calendar and worksheet to help you on your way.

Benefits of providing effective performance appraisals

Here are some potential benefits of providing effective performance appraisals within your business, according to Chron, the Houston Chronicle news website:

Improves communication between leadership and staff members

By communicating with your employees about the potential you see in them as well as the improvements they can make, you help foster a healthy professional relationship with your staff members. Employees feel valued as you take the time to help them seek improvement within your company.

Minimizes confusion about job duties

Performance appraisals help employees gain clarification on their job requirements and what is expected of them within your company. This allows employees to feel satisfied with their jobs.

Provides employees with a goal-driven mindset

Performance appraisals inspire motivation to meet job goals employees may have forgotten about after working at your company for a long period of time. Not only can this enhance their productivity, but it can also increase their job satisfaction by giving them a goal to strive for.

Reduces employee turnover rates

Performance appraisals might help reduce employee turnover rates because you set clear expectations and give employees the opportunity to grow within your company. because of this, they may be reluctant to leave your company for another opportunity.

Creates opportunities for career advancement within the company

By conducting performance appraisals, your employees may improve their job performance to the point where they are ready to take on more senior roles within your company.

Factors to consider for performance appraisals

The factors you use to evaluate your employees can vary depending on the role they have within your company, but, there are some common factors that apply to all roles. According to http://www.whatishumanresource.com/, here are some factors to consider for performance appraisals:

1. Punctuality

Punctuality refers to the degree to which an employee is on-time for work. You may choose to include attendance in this performance factor.

2. Accountability

Accountability refers to the process by which employees take responsibility for their actions if an error occurs and understand how their job affects the productivity of the rest of the office.

3. Quality of work

Quality of work is a factor that allows you to assess the overall quality of the work they contribute to your organization.

4. Quantity of work

Quantity of work is a way of measuring productivity within the workplace. Measure the quantity of work by comparing the number of tasks they complete in a given time frame to the needs of the company.

5. Time management

Time-management is the process by which employees meet deadlines and allot specific amounts of time to certain tasks.

6. Teamwork

Teamwork refers to the degree to which an employee works well with their co-workers.

7. Reliability

Reliability can encapsulate factors such as punctuality, productivity and work quality to assess how dependable your employees are.

8. Communication abilities

The degree to which an employee is able to communicate with their coworkers, superiors or subordinates may be an important performance appraisal factor. This includes verbal communication, written communication and interpersonal communication.

9. Leadership capabilities

Especially for those seeking management positions, leadership capabilities show how well a person can lead a team and model exemplary behavior on the job.