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Top 4 benefits of Performance Management

The purpose of a Performance Management System is to improve the overall performance of the organization by evaluating and managing the performance of its employees and ensuring that organizational goals are achieved.

If administered insightfully, a good performance management program benefits all concerned individuals that take part in fulfilling the goals and objectives of an organization. A good Performance Management System can have a positive influence on employee loyalty and their job satisfaction because it employs various tools which interact with the employees and organization. These tools help in strengthening the ties of trust between the organization and its employees. Some of the ways by which a Performance Management System can influence job satisfaction and employee loyalty positively are as follows:

  1. Providing maximum opportunities to each employee for career growth; ensuring a healthy relationship between performance feedback and employee development programs.
  2. Recognizing and appreciating good performance of employees. Many banks, call centers and hotels have ‘Employee of the Month’ awards. Such initiatives not only appreciate the hard workers but also promote healthy competition.
  3. Establishing a platform for open communication through which performance objectives are made crystal clear. Online company portals are quite the rave due to the advent of information systems. As such, many manufacturing and service industry companies further incorporate an intranet based chat room so that employees can freely and timely communicate with one another.
  4. Distributing earned rewards immediately after performance evaluation on a frequent basis. Some hotels reward their high valued employees by providing them with a free voucher to redeem for certain services of the hotel.

A good performance management program provides self-assessment opportunities and improves the performance of the employees as a result of performance evaluation and self- awareness. It is rarely seen that the same employees secure ‘Employee of the Month’ award month after month. This is because most employees self-assess and compare themselves to the person who received the award. Their performance is improved as a result and ultimately they do get the award. The later in turn, play a role in defining career paths clearly and providing opportunities for growth. In manufacturing, and service industries especially, performance – based rewards and recognitions play a major role in ensuring job satisfaction among workers.

Evaluation Techniques for Performance Management

In order to reap the benefits of performance management, certain tools need to be successfully utilized.  Some evaluation techniques which work great for performance management include: Evaluating employee readiness for taking up higher responsibilities. Providing individual feedback to employees regarding their current performance; and linking the outcome of performance evaluation with rewards and promotions.

By taking the reviews of the performance evaluation into account, employee development needs to be targeted. The training requirement of employees is determined in view of their current competencies and skills. Counseling and coaching are only some of the developmental trainings which are employed by most organizations. They help in strengthening the relationships between the senior and the junior members, and thus increase employee performance.

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