Though performance management has traditionally been considered a yearly process to gauge employee performance, progress, and engagement, in reality, its scope lies far beyond this.

One of the most integral and crucial aspects of performance management is leadership development and succession planning. A well-designed performance management system aids in identifying employees with leadership potential and helps to develop and inspire these leaders with the aim of accelerating company growth and innovation.

Performance management processes can be used in a multitude of ways to motivate tomorrow’s leaders.

As we will see, even the adoption of small changes can make a significant impact on the employee’s drive, determination, and resilience.

Make Use of Personal Development Plans

Employee development is neglected by large and small companies alike. But forward-thinking companies make sure to emphasize employee development in conjunction with everyday work, knowing that they are best served harnessing today’s talent so they have skillful leaders tomorrow.

Emphasizing employee development gives the organization a competitive edge and increases the likelihood of employee retention, putting the company in a better long-term position.

To get the most out of employee development, allow your employees to take ownership of their own career path by creating individualized personal development plans. This can be a hugely motivating factor for your workforce, and it doesn’t have to cost much. Employees should consider which skills they want to harness and develop.

HR and management can assist in determining how this can be done in an efficient way. It should be noted that soft skills such as communication, adaptation, and collaboration, which are essential leadership characteristics, should be emphasized as much as hard skills.

When it Comes to Goal Setting, Put Employees in the Driving Seat

While goal setting should be a collaborative process between manager and employee to a certain degree, employees should be in the driving seat when it comes to their own objectives. It has been shown that we are far more likely to accomplish goals we set ourselves, which is beneficial for both the employee and the company itself.

On top of this, giving the employee the autonomy to dictate their own work goals encourages empowerment, decisiveness, and independence. These are the building blocks of a great leader.

Use Goals to Encourage Employees to Challenge Themselves

An effective performance management technique is to encourage the adoption of ‘stretching’ goals. This means that the goal at hand is challenging, putting the employee just slightly out of their comfort zone, which pushes them to develop.

During the goal setting stage, managers should encourage potential leaders to challenge themselves with demanding long-term goals.

This encourages two critical leadership qualities: focus and persistence. Focus is one of the most important qualities in a great leader, a characteristic necessary for a long-term task. Additionally, this form of goal setting allows the employee to develop persistence or ‘grit’, a characteristic every great leader possesses.

From an HR standpoint, it should be noted that we are more likely to perform better if we set ourselves challenging goals. From a leadership development point of view, we also know that the best, most inspirational leaders only get to the top of their chosen field by continually challenging themselves.

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Make Authentic Communication an Essential part of Everyday Work Life

With the move to continuous performance management, regular, effective communication is becoming the norm. Rather than a token and stale yearly performance review, Fortune 500 companies are opting for more frequent employee check-ins. This involves weekly or bi-weekly meetings, where employees and managers can discuss performance, progress, and relevant issues.

This removes the awkwardness imposed by rigid yearly performance reviews and gets employees and managers used to transparent communication — and of course, we know now that communication is what makes leaders truly effective.

Prioritize Reward and Recognition

Reward and recognition should be a staple of every performance management system. Employees should know that their efforts and achievements are being appreciated, and studies have shown that employees who receive ongoing recognition far outperform those who receive none. On top of this, reward and recognition are fundamental to an engaged workforce.

Engaged employees are a manager’s dream, as they are more motivated and determined to work harder for themselves and the company. A simple “thanks for your hard work” can really inspire a potential leader to push their own limits.

Allow Room for Creativity and Flexibility

Autonomy is a critical element for the foundation of a great leader, and it can be so easily implemented into your existing performance management system. All that is required is for managers to stop micromanaging. Introduce a degree of flexibility with regards to how an employee approaches work. Once an employee has a given goal or task, let them decide how they are going to achieve them.

Of course, managers should track performance and progress, but as long as they are hitting their targets, there is no need to keep a watchful eye on their every move.

Employees given this freedom build greater self-confidence, resourcefulness, and resilience. When an employee is constantly told what to do, they have no need to think for themselves, but less observed employees learn to think outside the box and consider their work from different angles.

If you are wary of this approach, consider starting small, with a situation where the consequences are minimal should the situation go wrong. Ultimately, the benefits will far outweigh the costs and any failures will simply act as lessons for the future.

How Can Performance Management Motivate Future Leaders?

If you have ideas that you feel like sharing that might be helpful to readers, share them in the comments section below. Thanks!

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Stuart Hearn
Stuart Hearn has twenty years of experience in the HR sector. He co-founded plusHR, a leading UK HR consultancy, and previously worked as International HR Director for Sony Music Publishing. Stuart is currently CEO of Clear Review, an innovative performance management software system.
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