Currently, having a good performance management system is a fundamental strategy for your company to achieve its goals and stand out in the market. When approaching the subject, many confuse with the concepts of performance evaluation. These are different but complementary tools.
Performance evaluation is one of the elements that make up the management process. It is essential for evaluating employees and measuring the achievement of results, according to defined metrics. Next, learn more about it!
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What is performance management?
Performance management is an ongoing process that encompasses employees, leaders, and processes. Its purpose is to define goals aligned with the objectives, evaluate and monitor the development of activities and outline improvement actions.
To implement performance management in your company, the first step is to establish a plan. In the planning process, you align objectives with employee expectations. It is important to make clear what the company expects of him and to show that he is a fundamental part of the success of the business.
Then follow up to see if he’s acting as expected. Establish indicators to assess performance and outline training and development actions to improve employee performance, accompanied by continuous feedback.
How important is performance management?
Performance management helps to raise indicators and establish metrics to achieve the company’s goals. It positively impacts results, as employees are engaged in contributing to the organization’s mission. See some advantages:
Performance management contributes to motivating your employees, as it makes them feel important to the organization. Through evaluation indicators, it is possible to reward employees, who are recognized and will feel motivated to improve their performance.
Strengthening the work team
By propagating the company’s strategies, its employees will be aware of the organization’s mission, vision, values and goals. This helps streamline communication processes and contributes to a more united team and a better organizational climate . Investment in learning and development is also an important factor in strengthening teams.
Achievement of goals
By planning and establishing metrics to achieve the company’s mission and vision, it becomes easier to set goals for employees. Exposing the organization’s strategy to the departments allows everyone to know the right way to achieve high performance. In addition, employee engagement greatly reduces turnover rates.
Efficient and effective training
Through performance management, it is possible to identify gaps that are at odds with the organization’s purposes. Thus, it is possible to detect the needs for the development of employees, aligning them with strategic objectives. Consequently, it is possible to optimize training processes, and make them more efficient and effective.
What are the performance management challenges?
It is challenging to implement performance management. You will have to align employees with the organization’s goals, develop skills, and establish effective management. Here are some of the main challenges of the process:
- lack of integration between the tools used;
- frequent changes in processes and goals;
- delay in performance feedbacks;
- outdated technologies;
- Failures in establishing metrics.
The management process must be a continuous cycle and needs to be evaluated regularly. Remember that changes in the technological and economic context never stop and the company needs to innovate to remain competitive.
Therefore, you will often have to adapt strategies according to market needs. So don’t stagnate your management process.
How important is performance management to a company?
Performance management allows, among many things, the monitoring of the strategies chosen by the company to achieve results. Learn more about this relationship here! Performance management is one of the main people management subsystems within a company.
That is, Performance Management makes it possible to monitor the execution of the strategy, as it is the performance of people that ensure that any plan becomes a reality and leads the company to the planned results.
Through it, it is possible to identify points of improvement in the performance of employees, as well as those who stand out in their functions.
Why do performance management?
Performance management shows how each employee is performing in relation to their activities and responsibilities. Therefore, from a financial point of view, it is essential to show the return on investment that the company makes in salaries.
Also, this is the fairest way to decide who to promote and who deserves recognition and/or salary increases. Another benefit is that performance management, if carried out well, will support training programs, career plans, leadership training programs, succession plans, etc.
In other words, effective performance management is the most consistent basis for guiding HR practices. In fact, it is the central point of People Management !
Performance and competence
Before going any further, it is necessary to clarify that the concepts of performance and competence are different and complementary. That is, performance is what each one delivers. These are the results achieved by employees through the execution of their activities. Therefore, performance management is done with indicators and goals!
Competencies are the knowledge, skills, attitudes and behaviors that people use as a means to perform their tasks well. That is, through the application of their skills it is possible to present good performances and deliver valuable results. In this way, the investment in the training and qualification of employees should be reflected in the improvement of their performance.
It is very important to understand these differences, mainly because people’s performance is positively or negatively affected by their competencies. Therefore, when a deficient performance is detected, the cause is usually in some deficient competence that needs to be identified and worked on to enhance people’s performance and, consequently, the company’s results.
Since this difference in concepts is clear, we are going to focus on some important points so that Performance Management has the desired effects.