If you run a small company and the analysis of basic processes shows a good result, does this mean that your management is at a high level? Quite possibly. Then it is logical to ask yourself the question – do you need business performance management if the main economic parameters suit you?
It must be understood that performance management is not one specific solution. This is an approach in which everything changes – from corporate culture to the reward system. Moreover, the management of rewards is the basic point. It determines how much and to whom, and most importantly, what you pay. This includes salaries, bonuses, etc.
Performance management has another important aspect – the existing corporate culture. In any case, you already have a corporate climate, there are certain leadership styles that everyone is used to and that work. Accordingly, performance management will bring changes to this system. Your job is to make this process as painless as possible.
Method 1 – Setting Goals and Evaluating Their Solution
It is logical to start the implementation of the Performance Management system with the simplest method – to assign specific tasks to each employee in accordance with their position. Then define key indicators and modifiers, introduce motivators (rewards) for the implementation of the plan.
Effective management in an organization means that when employees leave, everyone clearly understands why this happened. Everyone knows why certain specialists were promoted. The setting of tasks and the results (evaluation) should not only be regular, but also 100% transparent.
Method 2 – Feedback
Effective management of a progressive enterprise assumes that feedback interacts closely with two concepts – corporate culture and the so-called “360 degree method”. The essence of this method is that the assessment of the activities of an employee is carried out not only by a top manager, but also by their teammates, colleagues from other departments, and sometimes even clients.
The “360 degree method” allows you to evaluate absolutely all the processes with which a particular employee is associated. How anonymous and transparent such an assessment should be is up to the company to decide.
Method 3 – Employee Engagement
According to surveys, the effectiveness of the work that employees provide is directly determined by their involvement. First, when management consults with experts in the field, they receive honest and transparent information that is not available through reports on the main processes. Secondly, an employee who personally works in this area can give a top manager a lot of important advice on how to improve work efficiency because they know all the practical nuances. Thirdly, an employee sees that they are valued. This can increase productivity by up to 45%.
Many experts understand that employee engagement works in conjunction with the efficiency and quality of management of a modern organization.
For experience to come, you need to understand the main thing – it is impossible to ensure the involvement of employees only through feedback. Or just team building. Employee management is always a complex task, so it requires a comprehensive multi-approach.
Method 4 – Horizontal Management
Let’s take Google as an example. In addition to departments, it has teams that are frmed mainly to solve specific problems. That is, when a company needs a new search algorithm for YouTube, it forms a group of several dozen specialists from different fields. The group includes middle and senior managers. But they all work at the same table, literally in the same office. This is horizontal management.
Google is indeed a great example of an effective management system. Target (focus) teams within the company are constantly formed and disintegrated, they are not static, there is no point in this. Therefore, each task is solved with maximum efficiency in the shortest possible time. In this case, everything is in order with organizational management efficiency, because the leader of the group controls the work of subordinates directly.
Method 5 – Coaching Approach
In many companies, the performance management system is inconceivable without coaches – third-party specialists who improve the skills of your employees. But multiple big organizations at the same time are just coming to the realization that direct performance management is just the tip of the iceberg.
International companies are developing their own institutions of internal coaching. The goal is to get a stable result in the future. Reports are important, but they should not become an end in themselves. After all, the real parameter is completely different – it is the company’s profit. Until the higher echelons understand this, no performance management solution will give the desired result.
If you want to find out more about key methods of the performance management system, download our new eBook “5 Key Methods of Performance Management Every Manager Should Know.“