How to Measure the Effectiveness of Your Performance Management Program

Jul 22, 2021 | Performance Management

A performance management (PM) program helps you assess employees’ progress over time—if it’s performing as intended. These programs include three key elements: goal-setting, performance reviews, and performance improvement plans. In other words, it involves determining what employees should strive to accomplish, creating and fine-tuning plans for how to achieve those goals, and evaluating employees’ progress through formal and/or informal reviews. Many programs today use technology to track progress toward goals, providing clearer insights into where employees are struggling and excelling.

In addition to evaluating your employees, you need a plan in place to gauge the effectiveness of your performance management program itself. Wise organizations continually assess their performance management practices and adapt them as needed. How do you do that? Let’s take a look at five essential tactics for evaluating your performance management program so you can make sure it’s functioning properly.

Assess the clarity of goals

Lack of clarity on goals poses a major issue in many PM programs. Thoroughly review goals for clarity and make sure they’re broken into appropriate steps. Verify that employees have set SMART goals that are specific, measurable, attainable, relevant, and time-bound and that they align with the goals and vision of the organization. Further, keep the number of goals manageable so employees can focus on key priorities rather than becoming overwhelmed.

Assess employees’ individual growth

A good performance management program should provide employees with a continuous flow of feedback that illustrates their strengths and areas for improvement. To determine whether you have a good PM program, observe performance trends from one cycle to another. Have employees improved over time? Looking at trends in performance reviews or 360 feedback surveys over time can show whether employees are generally improving or not.

Survey employees and managers

A survey with thoughtful questions can help you understand how employees and managers perceive the performance management program. It provides different vantage points from which to assess the program’s effectiveness.

You can ask employees questions such as these:

  • Are you getting enough feedback on your performance from your manager?
  • Do you understand your role and goals thoroughly?
  • Do you feel engaged in your work?

You can ask managers questions like the following:

  • Is your employee making progress? If so, in what specific ways?
  • Does your employee seem more motivated?
  • Does your employee seem more focused and engaged?

Sending out a quick survey once a month or so will help you track how well the program is performing over time. Send slightly longer surveys every few months to gain more in-depth feedback.

Evaluate fairness

The absence of fairness will cause morale and motivation to plummet, lead resentment to build, and drive some employees to start seeking a job elsewhere. Take steps periodically to ensure the fairness of your program. Confirm whether managers are evaluating people consistently when they give ratings within the system on things like progress toward goals. The same evaluation criteria must be used across all employees in similar functions or at similar levels. Work to pinpoint and address any biases. 

This may sound challenging at first, but a performance management software can help you identify bias by providing data and reports on managers’ rating styles. Compare rating and reviewing styles between managers as well as between each manager’s individual employees, assessing whether managers are evaluating employees using consistent criteria. Evaluate fairness in how each manager reviews employees and provides them with support and guidance. You can also ensure that particularly high or low ratings are adequately documented, showing the rationale behind them. 

Compare self-evaluations against manager evaluations

When a performance management program works as anticipated, employees will have a clear understanding of how their manager views their efforts. Thus, the self-evaluations and manager evaluations should have a high degree of similarity. Compare individual employees’ self-evaluations against the written evaluations from their manager. Is there substantial overlap in terms of the strengths and areas for improvement they highlight? If not, your PM program needs to enhance employees’ self-awareness about their abilities through strategies such as real-time feedback and 360 reviews

When functioning at their best, performance management programs enhance communication between managers and their employees. They keep organizations moving toward their shared goals. They boost productivity and help all employees achieve their highest potential. Use the five tactics outlined here, and you’ll ensure your organization does just that!

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