The U.S. Office of Personnel Management (OPM) defines performance management as “the systematic process by which an agency involves its employees, as individuals and members of a group, in improving organization effectiveness in the accomplishment of agency mission and goals.” In short, performance management is simply the way an organization defines, monitors, and rewards the performance of employees and their contributions to the organization.
Performance Management Cycle
When it comes to developing a strategic approach to performance management, consider utilizing a performance management cycle.
This performance management cycle is a year-round process whereby managers and employees work together to set performance and behavior expectations, meet regularly to review progress, provide feedback and coaching, and annually review and document results against original expectations.
The First Step: Setting Expectations
Setting expectations is the first step in performance management and, arguably, the most important. Without clear expectations, the rest of the performance management process will be hard to implement. The best time to set expectations for employees is when they are hired, or even better, before they are hired. Why is it crucial to discuss performance management during onboarding? You are setting the stage for success by establishing the foundation.
It is also important to define both company-wide and individual-manager expectations, and ensure that all expectations on the individual level reflect and support the expectations company-wide.
The expectations you set for employees should meet the following criteria:
- Achievable—must be realistic
- Behavior-based— we need to be able to observe and measure it
- BIG Picture—don’t give people 57 expectations. Define the most significant, most pervasive ones.
- Clear—is it simple? Does everyone understand? “Work hard” and “be a team player” are too vague
- Concise—cut to the chase. It should be short enough to memorize
- Consistent—the expectations shouldn’t change by person
Key Principles of Performance Management
- Treat people with dignity and respect
- Performance management is a shared responsibility
- There should be no surprises
- Discussions should be two-way conversations
- All employees have strengths and improvement opportunities