The performance management cycle is a structured approach to aligning employee performance with organizational goals through planning, monitoring, development, and evaluation. This ongoing cycle promotes employee growth, productivity, and continuous improvement to help achieve business success.
By Brad Nakase, Attorney
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Every business you look at will eventually go through the performance management cycle. This post will break down the performance management cycle, its history, and how to use it to your company’s and your employees’ advantage.
The performance management cycle is a yearly occurrence that involves evaluating personnel at various points throughout the year. Every employee goes through this pattern: goal-setting at the start of the year, progress tracking, development assistance, and formal evaluation at the conclusion.
Creating and implementing strategies to improve employee performance is the main objective of this cycle. By directing workers’ attention and energy toward the accomplishment of organizational objectives, these strategies facilitate the process of goal alignment.
Every step of the performance management process has one overarching purpose: to boost productivity. The performance cycle model’s discussions will revolve around goal-setting and coaching the employee to achieve or surpass those goals.
One other thing: performance management isn’t just for teams; it may be effective for individuals as well. Teams can stand in for employees in this article, which serves as a guide for managing team performance just as well.
Peter Drucker produced one of the first models for performance management. He advocated for MBO in his 1954 book, The Practice of Management.
Individual objectives should be in sync with corporate objectives, according to MBO. Management is accountable for breaking down larger company objectives into more manageable personal objectives. The employee is helping the company achieve its goals in this way. Having personal and team goals that are in sync with the organization’s overall objectives is a worthy but difficult goal to strive for.
Our proposed model for the performance management cycle consists of four stages:
The planning phase of the model begins at the start of the year and include establishing objectives and determining success criteria. The second step, after establishing objectives, is to track how far down the path to success you are. The process repeats itself: if an employee’s performance is inadequate or has room for improvement, they undergo development; after that, they are evaluated and compensated based on their success.
This cycle is ongoing, even though many people start it at the beginning of the year. Goals should be re-set if they change. When scores are low, growth is more important, and if a more senior job opens up in the middle of the year and the employee is ready to take it, the reward comes early.
There are four steps to the process. We can review them in order.
During the planning phase, you should focus on communicating your expectations for the employee’s performance. Typically, these are part of the job description and part of the planning process. The employee should be actively involved in this planning process, as it is excellent practice. Involvement like this boosts feelings of fairness, value, and incentive to improve, as well as satisfaction with the performance cycle (Cawly, Keeping & Levy, 1998). In order to accommodate evolving goals and needs, employee performance plans must to be adaptable. If you want to learn more about goal-setting and planning, the SMART framework is a good place to start.
In the monitoring stage, we keep an eye on how well we’re doing in relation to our planning objectives. Keeping tabs on performance and offering comments on how close you are to your objectives is what monitoring is all about. Instead of finding out about subpar performance at the end of the year, when it’s too late, managers and supervisors can fix the problem by constantly observing. Prioritizing the achievement of the objective over its means is essential, especially when interacting with highly educated professionals. A manager should avoid micromanaging and setting rigid deadlines for accomplishing this objective. For efficient monitoring, good management procedures are essential.
Improving performance is a primary goal of development. Active tracking makes it possible to find places where things could be better. This might be regions of outstanding performance where the person wishes to reach even greater heights, or areas of underperformance that needs fixing. Training and development programs, as well as difficult tasks and other chances for professional and personal development, can help with this.
Awarding and grading: In order to find out how much value employees provide to the company, performance ratings are a must. In most cases, this takes place at the twice-yearly performance review of the employee. If an employee consistently fails to meet expectations, it may be time to part ways since they aren’t fit for their role or the company. It is only fair to reward employees who consistently go above and above. This can take the form of verbal or written compliments, monetary compensation, a promotion, a day off, or any combination of these!
Back in the day, the typical process for making a computer program included making a list of user needs, sending it to developers, and then waiting for them to finish the project, which may take anywhere from a year to two. In the event that user needs changed, the final product was often flawed and out of date.
There were few ways for customers to provide input or change their needs over time, which made this process troublesome. The agile movement emerged as a reaction to this laborious and wasteful method of developing software. Agile was defined by a combination of the following: frequent software delivery (in one- or two-week sprints rather than months), a focus on customer satisfaction through the early and continual delivery of valuable software, an openness to changing requirements, and continuous feedback.
You probably can guess where this is going: this agile way of managing projects related to software is also a great way to develop people. Continuous performance management significantly shortens the time it takes to manage performance.
A good illustration of this is the increased frequency of feedback communication as opposed to, say, once every six months leading up to a formal evaluation. When employment needs change, this higher frequency helps steer appropriate behavior. Learning can also progress more quickly when there is more face-to-face time between supervisor and employee.
When it comes to employees’ (ongoing) learning and progress, continual performance management is crucial. You make it a point to go through the performance management cycle on a monthly, if not more frequent, basis. This aids in staff development and speeds up the achievement of company goals.
These are the four phases of the performance management cycle. Maintaining success is not just a process that happens from the top down. Actually, the boss and employee are both equally responsible for it.
It will be more effective as a whole if we stress this shared duty. The best way to encourage an employee is to make them feel like they’re part of the team and show them how their goals will impact the bigger picture. This also makes it easy to keep track of progress on goals.
Getting everyone on board with the performance management cycle’s objectives and working toward them together is the manager’s job.
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