What is the purpose of the performance management cycle?
The cycle of managing performance is an integral part of the process of performance management or strategy. It is shorter and employs the continuous four-step method of monitoring, planning review and rewarding.
The benefits of this method include increased competition and structural flexibility and a higher level of employee motivation.
The definition of the performance management cycle includes four major phases:
- Planning
- Monitoring
- Reviewing
- Rewarding
The system typically follows an annual calendar, which ends with a performance assessment However, several organizations have discovered that frequent check-ins can boost employee performance.
One benefit of implementing a well-designed performance management plan is that the employee is more in tune with the objectives of the company, and who is aware of their personal goals and the bigger goals of the company and has a clear plan which can help to achieve their goals.
Stages of the management of performance cycle
Let’s take a look at each phase of the cycle of performance management.
1. Planning
In the planning phase the basis for success is laid. Before management speaks to employees the team of management should sit down and discuss the company’s goals and targets for the year.
This includes the overall business strategy and personal goals for each employee and teams, which include objectives for development, specific objectives, tasks as well as actions and behaviours.
Without that vital information, any plan that involves employees won’t be successful.
When the management team has the specifics of what they would like employees to accomplish It is now time to talk to the employee to create an overall plan for the coming year.
It should be a team-based process, since an employee who is aware of the reasons behind their being assigned objectives and tasks has more likely to invest in accomplishing these.
In this meeting, goals must be clearly stated by using the Doran, G. T. (1981). “There’s a S.M.A.R.T. method of writing the management’s goals and objectives”. Management Review. 70 (11): 35-36.S.M.A.R.T. method.
The following are SMART goals:
- Specific The purpose is clearly defined, along with precise information on the goals to be met as well as how it should be achieved, and the reasons why it is crucial.
- measurable – The objective must be measurable and specific. measure to show the extent to which it has been accomplished.
- Doable Although the objective should be a challenge for the employee but it shouldn’t be too lofty that it will not be feasible even at all.
- Relevant The objective is compatible with both the job of the employee as well as the overall objectives of the company.
- time-bound – There must be a clear date when this goal will be accomplished.
The goals that employees are to be aligned with the objectives of the organization and help in reaching them. Making sure that the goals are in line will lead to the consistency of the overall strategy.
In setting these objectives the management may set up an employee development plan for employees.
At the beginning of the cycle for performance management the management has an chance to pinpoint the areas of training and development that an employee would like to be strengthened and set targets to achieve those goals.
The creation of an employee development plan for employee development will show that management is working with the employee to help in becoming a competent and effective member of the business.
2. Monitoring
In the model of performance management cycle monitoring is an important role in achieving the objectives that are set during the planning stage.
Monitoring won’t be as effective when it’s only conducted every once or twice throughout the year. It is recommended that the managers meet with employees every month or on a quarterly basis to assess the progress made, provide help when needed, aid with any issues that might have arisen and make adjustments when necessary.
In the process of setting goals for the year issues usually arise due to ineffective planning and low level of enthusiasm. A large, distant goal may be intimidating or seem too distant that an employee fails to do the right, concrete actions.
The goal can be broken down into monthly subgoals will ease the task, allowing employees a better grasp of the task.
When holding quarterly or monthly meetings with employees the management is able to more effectively oversee this process.
Goals for the organization may change through the course of the year. More frequent meetings could allow the introduction of new goals that are more aligned with the organization’s goals.
3. Reviewing
At the close of the year both the manager and employee gather to discuss the previous year’s results and to determine whether the goals were achieved.
This is another chance to develop a partnership on behalf of the employee. The more engaged they are in different phases of the process of performance management the greater incentive they will be given to keep working hard to reach their goals, and the ones of the company.
If the proper monitoring was carried out then the managers will already got a solid idea of how an employee performed throughout the course of the year. The annual review is an opportunity for employees and managers to assess both the final outcome and the entire process.
This evaluation should be accompanied by questions like:
- Was the goal originally realistic?
- Was the objective aligned with the goals of the company?
- Did the employee acquire valuable expertise or experience?
- How was the efficiency of the employee in completing their work?
- Did the business provide the necessary support needed to reach the desired goal?
- What are the ways that the future goals be set in a different way to ensure their success?
- What elements in this system could be simplified or enhanced?
Employees can share their view of how they performed during the year, and get the feedback on the part of the manager about how they performed or exceeded their targets. If there has been problems with performance during the year, that’s when they are brought up. It is recommended that , if concerns were discussed the possible solutions are also offered.
This is also a room where future opportunities for development could be discussed, along with bonus or compensation increase.
4. Rewarding
The last stage of the cycle for performance management program is the award. This is an aspect which should not be missed because it’s the one that is most crucial for motivating employees.
Employees who don’t receive the proper recognition after an entire year of working hard to reach organizational goals and achieving them may lose their motivation for the following year. They may lose faith in their workplace, and find themselves feeling that their abilities aren’t valued and start looking for a new job.
If management rewards employees fairly and acknowledges their work and accomplishments, they ensure that employees be motivated to meet their goals as an organization.
They should be based on merit. Employees will know who among them is putting in the work and if they observe colleagues being treated unfairly it could cause them to lose motivation. In contrast, when employees witness the top performers receive a hefty reward, it helps to show that it is worth doing the extra effort.
Some of the rewards that can be provided include:
- A rise in compensation
- One-time bonuses
- The length of vacation has increased
- Special projects
- A promotion
- A positive written review
- Acknowledgement across the company
After the reward portion of the model of performance management the management team and the employee may decide to meet once more to discuss the cycle in its entirety. This is an opportunity to discuss any issues that may be arising, and then begin discussions on the coming year’s objectives.
The cycle then begins again.
What is the purpose of the process of managing performance crucial in the business world?
Through the development of the performance management cycle such as the example in the previous paragraph, organizations can increase the output of their employees, ensuring that the company’s goals are being pushed forward and track the performance of every employee.
Following the model of the performance management cycle the company can continuously review its structural goals, which allows rapid response to evolving market conditions. This increases competitiveness.
Employees also gain from the cycle of performance management program.
With the help and collaboration by their management team, they realize that they are an important member of the team. Their abilities can be developed and applied in effective ways. There is a reward to hard work.
