The process of setting up an environment of motivation in an organization, where employees and managers should keep on reviewing themselves regularly, and all of them work towards the common goals of the organization, is known as performance management.
It is well known that an organization needs to follow performance management because it helps the organization produce a workforce that is skilled and efficient.
If an organization does not follow the performance management system, it fails in the process of employee motivation as their employees become directionless and disengaged from work.
Performance management acts as a vital process for modern organizations. It helps organizations become successful and stay ahead of the competition. Performance management involves measuring, reporting, and managing the progress of the organization to improve the performance of the organization both at an individual and corporate level.
Types of Performance Management Tools and Techniques
Every organization, whether commercial or non-commercial, prefers to monitor their overall progress yearly, monthly, or weekly. It depends on the amount of work and the type of organization.
To help organizations to keep a check on the progress of the organization, performance management software and tools are available. These tools simplify the work of the organization and provide benefits to the employees. These performance management tools are:
- Performance Appraisals
- 360-degree Feedback
- Key Performance Indicators (KPIs)
- Personal Development Plans (PDP)
- Reward and Recognition Programmes
These are the top 5 performance management tools used by most organizations. Each of these tools have benefits, features, specifications, and flaws. It is upon the organization to decide which tools are suitable for according to their needs and scope of growth.
1. Performance Appraisals
Performance appraisals are one of the top 5 performance management tools. The tool is known to be potent for combining goals of the individual to the common goals of the organization, but when used correctly.
To get the right amount of output from this tool, employees need to take care that the appraisal process is honest and fair, and that constructive two-way communication takes place. If these points are not kept in mind, appraisals can work as demotivation for the organization and will lead to a decline in performance.
Appraisals also help in identifying people who are not performing up to the mark and those who have landed in the wrong job.
2. 360-degree Feedback
360-degree feedback usually deals with the evaluation and assessment of employees, which could be either internal or external. The main question which this tool has to answer is, “How well are their employees performing?”. It provides each and every individual of the organization with a detailed assessment of their performance based on the views of people with whom they work.
These people include their supervisors, managers, colleagues, customers, clients, and so on. The reports or the results are always confidential and therefore presented to the employees usually by their managers. A 360-degree feedback tool is therefore, typically, used in employee training and development. When this tool is used effectively and efficiently, it helps in simplifying the review process as it considers the opinions of many people instead of reviews of just the manager of the employee.
3. Key Performance Indicators (KPIs)
KPI is a perfect performance management tool that provides different ways to measure how well the organization, its units, projects, or the individual employees are performing to fulfill the organizational goals and objectives. It is a form of HR software. KPI is also used in enabling performance conversations, which are rich and data-driven. They also help in making better decisions for the organization.
4. Personal Development Plans (PDP)
A personal development plan is an expertly and efficiently designed action plan which is based on the needs, wants, and awareness of the actions that are going to support the personal and organizational development. PDPs are most often used to identify various types of training and development needs. A PDP creates an action plan for fulfilling these needs. It helps individuals set out the way they want to grow and to find out how they can achieve their goals.
This builds more interest towards the company and helps individuals improve their performance. To ensure high performance of the organization, different tools like a PDP act as an essential part of the organization.
5. Reward and Recognition Programs
Excellent performance should always be praised and rewarded. When employees feel that their hard work and performance goes unrecognized and unrewarded, they become demotivated, which makes them deviate from the organization’s overall objectives.
Every organization should have rewards and recognition programs, which are an essential part of the whole performance management system of the organization.
Many big organizations think of reward and recognition programs as a source of distributing financial rewards and incentives like bonuses and increments. But sometimes, simple recognition of hard-working employees is an essential aspect for maintaining morale.
What Do You Use for Performance Management?
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