Managing employee work performance is not an easy task for most of businesses in the times of Covid-19. According to McKinsey&Co , amidst the ongoing socio-economic uncertainty, the pandemics has accelerated the evolution of performance management (PM) towards endorsing more data-driven, on-demand, and personalized corporate management tools.
In the contemporary organizational culture, PM is regarded as an ongoing process of interaction between employers and their employees. It presupposes continuous communication and recurrent feedback between them. PM's primary goal is to create a comprehensive work environment, in which all employees could work productively, efficiently, and effectively.
5 Components of the Performance Management Cycle
A PM cycle is an unalienable part of today's PM practice. It depicts various stages involved in the process of evaluating comprehensively and transparently employee work performance. Here are 5 intrinsic PM cycle components:
- Planning. The PM cycle begins with the employer's defining employees' work duties.
- Tracking. At this stage, the employer monitors employees' performance and suggests correcting or modifying it, if needed.
- Developing. Unless the employer is completely satisfied with employees' performance, she/he takes specific measures to improve employees' efficiency and productivity at work.
- Evaluating. It is essential that the employer rates periodically employees' added value to the organization.
- Rewarding. The PM cycle ends with the employer's recognizing and rewarding employees' engagement in the work process.
Why Performance Management Matters
Effective PM is a key for a company's success and development. In order to maintain competitive advantage in the contemporary rapidly developing and globalized economic environment, companies are getting more and more interested in investing their time and money in implementing a well-structured PM system, which could not only help them fulfil their current strategic development objectives, but also contribute to their future growth. The benefits of a well-structured PM system include:
- Closer communication between employers and their employees.
- More transparent salary and benefits administration.
- Improved alignment of employees' performance with a company's strategic and operational goals.
- Better involvement of employees into a company's team-building activities.
- Subtler identification of employees' work-related strengths and areas for improvement.