Before constructing an employee performance management system, be sure to ask yourself these key questions

Whether you’re creating a performance management system from scratch, or your company is inspired to rehaul all your existing processes, you will need to put in some serious thought and consideration. Specifically, there are a number of questions you will need to reflect on and ask yourself in order to ensure you have a well-constructed performance management system that will inspire and encourage your workforce to excel.

Remember: a poor performance management system can have unfortunate consequences, including low employee morale, poor engagement levels and high turnover. To minimise the risk of things going wrong, we have compiled a list of five critical questions each HR manager should consider before pressing forward with a new performance management system.

1. What are my company’s values?

You might have heard of the importance of establishing clear company values. They influence every single aspect of your company, from recruitment to training. They reflect what your company stands for and the direction you are heading. For these reasons, it’s of the utmost importance that you consider your company’s values when creating a new performance management system. Flexibility, creativity, honesty and diversity are all values that can be incorporated into your system in effective ways.

2. How often should my company be conducting performance discussions?

The traditional performance management cycle revolves around a single annual performance appraisal, but this is a system that has proven to be ineffective. For this reason, many companies are opting to switch to continuous performance management, which involves regular performance conversations called ‘check-ins’. The continuous nature of this cycle keeps employees regularly updated with feedback and promotes transparent, honest communication between manager and employee.

Before you create a new performance management system, decide whether you want a more traditional approach to performance management or a more modern, qualitative approach. This decision will impact everything from the type of software you use to how you address performance-related pay.

If you would like to introduce regular check-ins, we have a valuable resource for you in the form of a free one-to-one meeting template. This can help get managers and employees used to the new system. It can also guide meaningful conversations.

3. How important is autonomy and flexibility to my company?

Increasingly, employees are seeking out vacancies and forward-thinking companies which accommodate flexibility and autonomy. This is particularly true of millennials. In fact, even top performers are happy to sacrifice pay for increased flexibility. If you want to incorporate elements of flexibility in order to attract and retain top talent, you will need to consider how this will affect your performance management system. This could come in the form of flexible hours, remote working opportunities, or ‘creative time’ to explore individual projects. Some companies have even taken the brave step of not tracking working hours or employee holidays — a strategy that is paying off in many ways.

4. How can I create an atmosphere and culture that prioritises transparent communication?

It will come as no surprise that open and honest communication is critical to the success of a company and to the overall performance of its workforce. Employees should feel free to open up when they are struggling with a certain task or objective, they should feel confident about admitting to weaknesses and they should be able to give feedback and suggest changes to existing workplace processes and employee performance management tools.

There are many ways to encourage open lines of communication when designing a performance management system. Consider investing in performance management software that allows for real-time feedback. Introduce more regular performance discussions. Train managers on how to talk to their employees and encourage them. In time, it will become clear to employees that they are in a safe atmosphere that encourages transparent discussions and collaboration.

5. How do I encourage employees to be motivated and enthusiastic about their personal development objectives?

In order to improve company performance, you will need to get employees excited about their personal development objectives. How you will do this is something you will need to consider from day one and regularly revisit, depending on current performance management trends.

Consider how you will get your employees to understand that development objectives aren’t simply an arbitrary performance management tool. It is a means to help employees advance and develop in areas he or she deeply cares about, in a way that will help them achieve their personal career goals. You will also need to discuss how you will provide your employees with appropriate learning materials. Finally, you will need to cover how you will give your employees the autonomy to control their own personal development objectives.

At Clear Review, we are proud of our intuitive, easy-to-use, continuous performance management software that has helped companies around the world improve levels of performance and employee engagement. To find out more about how we can help you and your business, get in touch for a free performance management consultation.