Introduction:
This report discusses the importance of the employee performance management in the organization and its role to drive results and sustainability through people.
Employee performance management system cycle and the role of performance review.
Employee performance management system is a methodology to ensure everyone gets a piece of the strategic action “Oakwood International”. It’s an organizational strategic framework set in place to link business goals with people activities designed by Human Resources, but owned by line management. EPMS is much more than a cycle of activities, it’s a dynamic tool used by organizations to get the best out of staff by managing them right through line managers. This framework will align people with the strategic objectives of the organization and continuously review their progress to assist in achieving targets and reward their efforts. PM will help understanding people skills and run gap analysis to recognize their strengths and weaknesses and put forward suitable development plans to prepare them to perform their current and future roles competently. The result will be rewarding staff based on their performance and contribution towards organizational success.
The employee performance management system (EPMS) cycle starts at the top of the organization pyramid when the board of directors sets business objectives and KPIs for executive management upon the agreed period. Executive management accordingly; each for their division puts the suitably related objectives that would end up achieving the overall business objectives. The objectives will be cascaded down in each layer of management till it lands at the individual level, where the line manager set SMART (suitable, measurable, attainable, realistic, and time-bound) objectives for the staff that interlinked directly and indirectly with the organization’s strategic goals.
After discussing and agreeing on the SMART objectives, the individual performance takes place and the line manager monitors the progress against set objectives on a regular bases and provides formal and informal feedback and support. The line manager will use EPMS as a tool to measure the levels of staff competencies and put forth the suitable development plans to either close the performance gaps or, equip them for role enrichment and enlargement.
Furthermore, the line manager will provide guidelines on how to achieve results and measure progress periodically. The evaluation will be the last step of the EPMS cycle where the individual is appraised and rated based on the percentage of achievements. Documenting the process and the evaluation not only helps quality control, but also complies with legislation and labor law.
Employee performance management system plays a significant part in staff development, since it’s built on expected business results. A good design of EPMS framework will encourage the line manager to monitor subordinates, assess their capabilities, level of exhibiting competencies, and feed learning and development unit with needed training activities. It will support talent management; adding high performers to the talent pipeline and pay close attention to their skills and potential for growth in the same specialty (vertical) or the different role (lateral). The continuous feedback will also give resourcing and recruitment a flavor of the type of staff needed for the organization that fits the culture and is able to achieve results.
Examples of involving line managers in the employee performance management system review
Let’s start tapping into the HR role in employee performance management system and explain what the organization expects them to do.
HR shall design the framework of the employee performance management system, along with all related policies, procedures, and the grievance processes communicating it across the board to increase the buy-in. They need to equip the line managers with all EPMS needed details to support them through best utilization of the system; EPMS is considered a management enabler tool for line managers, e.g.: competency awareness and leveling, identifying skill gaps, best acceptable ways of conducting the periodic review and documenting the results, legal awareness related to organizational policies and the country’s labor law.
Accordingly, HR shall gather all data fed into the system and present the results to executive management to agree on the reward budget based on the organization results and connect afterward the talent management processes to identify high potentials and fill-in the leadership pipeline.
After line managers are prepared completely, their role starts by utilizing the EPMS efficiently to manage subordinates and drive business performance and results. Line managers should act as coaches for subordinates, to guide them in understanding their role and explaining what the organization expects from them in the first place. The two-way communication should be at the top between the line manager and the subordinate to eliminate any unforeseen obstacle or result boundaries and set a clear pathway on the effective ways of completing the tasks.
Depending on the line manager’s style, he/she can show the subordinates how things can be done and what the expected outcomes are, then monitor them closely to achieve results. Another important role the line manager has, is assessing the subordinate’s skills and recommending appropriate individual development programs, “IDP”, to either make them efficient in their current role or prepare them for future challenges, by enriching their role; adding more complex assignments and responsibilities. The dynamic nature of EPMS would enable the line manager to appraise the subordinate officially during review meetings and act as an advocate to get the best out of them, by reviewing where they were, where they are heading, and how long it takes to achieve the results.
Open, sincere, and objective communication should be the theme of review meetings, where biased actions and the attack of a person is not only prohibited, but will demolish trust and drive low performance and productivity levels. 360° feedback is an objective tool that can be used with supervisory level and above – people managing subordinates – to assess their competencies and leadership approaches and draw a clear picture of the leadership culture within the organization.
By rating the subordinates at the year-end of the performance cycle, the line manager would contribute to the tangible and intangible rewards subordinate deserves against their performance and achievements; which might end up with a promotion or year-end bonus, for instance.
HR, again, has another role of getting the feedback of the line regarding the EPMS and whether or not it supports the process and fits the purpose it’s originally designed for. What are the drawbacks and how do they improve the system, its processes, and how do they enable it to translate the organization’s goals into individual and team goals? Is the system agile and flexible enough to respond to corporate challenges or rigid and is a burden instead of enabler?
The evaluation of employee performance management system contribution to promoting challenges
Employee performance management system can promote challenges by facilitating and preparing the performance culture and mindset across the organization. Staff should be rewarded for the value they add to the organization, thus, creating a culture that apprises performers who know how to achieve results and what the expected outcomes are, is essential.
Such culture will encourage staff to be accountable for their results and be responsible for outcomes’ quality, which would engage staff in the process completely. Furthermore, EPMS will contribute the alignment with career management and development to satisfy staff and support their performances at their discretionary efforts.
Good practice of EPMS will promote capability and the identification of high performers, to serve talent management purposes for the sake of identifying high potentials and act as bases of the succession planning exercise. Having said that, a retention plan should take place immediately to nurture high potentials and high performers, so as not to lose them to competitors.
This contribution will be implemented successfully and drive ample results to the organization, only if two elements take place, which are:
- The performance cycle and rating being built on solid facts as evidence-based, not on biased outlooks, previous reward history, and favoritism. This would ensure that PM is fit for the purpose, which is increasing organization sustainability and profitability, strong management and leadership across the board, and an honest two-way communication between the line manager and the subordinate.
- The employee performance management system being built on fair and equal bases among staff. Discrimination based on gender, age, ethnic background, color or religious believes should be eliminated and only promoting a fair rating and consequently rewarding performers should be permitted. When two staff members are requested to achieve the same objectives and both have, then rewards should be completely the same without considering any other factor e.g.: gender, race…etc.
Employee performance management system will continue to promote challenges when automating the complete system where linking with different channels will be allowed, such as talent management, succession planning, learning and development activities and to become part of staff induction. On another hand, staff will be much focused driven on performance and achieving results during their weekly and monthly meetings where monitoring progress plays an essential part in such meetings.
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