Inconsistent performance management processes have a far-reaching influence on a company’s success. Yet many companies lack a standardized performance management process.
What are the essential components of a performance management process?
- Working with employees to set goals and clarify expectations
- Monitoring performance and sharing feedback on a continuous basis
- Holding frequent check-ins with employees on their progress
- Conducting formal performance evaluations within a standard review cycle
Inconsistency in any of these areas can affect a company’s success, as we’ll discuss. We’ll then dive into how to implement standardized performance management processes to provide fair employee evaluations and strengthen team alignment.
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The Problem with Poor Performance Management Processes
First, what exactly do we mean by “inconsistent performance management processes”? Let’s explore what these flawed processes look like in practice.
1. Across an organization, managers may not use a standardized process to evaluate employees. For instance, some may conduct annual reviews while others give quarterly assessments. They may also use different tools or methods for evaluating employees.
2. Some managers might tend to give more positive ratings while others give tougher reviews. This inconsistency causes teams to be evaluated by different standards, notes the Society for Human Resource Management (SHRM). When a standardized system hasn’t been implemented, or when managers don’t use it correctly, this inconsistency is likely to occur.
3. Individual managers may be guided strongly by personal bias. “When the context and criteria for making evaluations are ambiguous, bias is more prevalent,” researchers write in Harvard Business Review. “As many studies have shown, without structure, people are more likely to rely on gender, race, and other stereotypes when making decisions—instead of thoughtfully constructing assessments using agreed-upon processes and criteria that are consistently applied across all employees.”
4. Documentation of managers’ evaluations and the rationale for them may be absent. As a result, it would be hard for HR to detect and address unfairness in evaluations.
These inconsistencies in evaluations and feedback across teams and departments can lead to all of the following problems.
Poor Management Decisions
With inconsistent performance management processes, choices may be shaped by bias and personal preference rather than merit. Managers won’t understand employees’ true strengths, so they might appoint the wrong person to a particular role.
When employees feel they’re being evaluated unfairly, morale and motivation will decline. In turn, workplace culture will suffer as resentment between employees festers. In the long-term, employee well-being may decline because they’ll feel frustrated, stressed, and unsupported.
Lack of Engagement
Inadequate processes undermine employees’ goal-setting and enthusiasm for their work. They’ll lack recognition for their efforts or support for their growth, decreasing motivation.
Unfair performance management can even bring legal repercussions, as Adobe points out. By using a standardized process, you can ensure compliance with policies on equitable treatment of employees.
According to the Pew Research Center, 63% of workers who quit during the Great Recession cited lack of opportunities for advancement as reasons for their decision. Without strong performance management processes, employees’ talents go neglected or unrewarded, causing them to leave.
Gartner reports that 82% of HR leaders say their performance management process isn’t meeting its goals. In turn, that holds back the organization from meeting its goals.
Let’s briefly review the benefits of strengthening these processes.
The Importance of Standardized Performance Management
Good performance management brings major advantages for any company:
- Managers identify employees’ skills and areas for improvement, then support and reward them appropriately. Those ready to move to the next level are able to advance.
- A positive workplace culture develops as morale and engagement rise. Transparency in how employees are evaluated fosters a sense of fairness and clarifies how to excel in their role.
- Companies achieve greater productivity through strong team alignment, meeting or exceeding their targets.
- By using a streamlined process, managers, and HR reduce busywork while providing higher-quality performance evaluations.
Engagement rises by 14%, and overall performance by 24%, with strong performance management processes, asserts Gartner. Next, we’ll discuss how to build strong performance management processes.
Implementing Fair Performance Improvement Processes
Organizations have tried many tactics for enhancing performance management. Some abandon reviews; others discard ratings. But are those really the solutions?
A lack of ratings won’t address the inherent unfairness of inconsistent processes. The real solution is standardizing your process and then rigorously implementing it throughout the organization.
You can standardize your performance improvement process through several key steps. Let’s review what each of them entails.
Set Cascading Metrics
Just as goals should be cascaded throughout the organization, metrics should also be aligned, asserts McKinsey. In an auto manufacturing company, supervisors’ shift production targets should support the general manager’s annual production targets, which support the C-suite’s goals, they note. Ultimately, this creates a chain of targets that all support the overarching goal.
Track Metrics in Real Time
Tracking metrics through sophisticated systems will allow you to catch issues before they affect outcomes, as McKinsey notes. A good performance management system will help you resolve problems in real time, before they negatively impact your targets.
Primalogik offers a suite of tools to assist with performance tracking and improvement, for instance. A robust performance management platform allows both managers and employees to track progress toward goals. By increasing employees’ ability to monitor their own progress, it also empowers them to take control of their own growth.
Cloud-based technologies are especially helpful today. These solutions support team alignment in remote and hybrid organizations.
Rely on Multiple Information Sources
“When managers take multiple sources of information into consideration, measurement becomes more reliable and accurate,” says Gallup. “And it also leads to rich discussions that are developmentally meaningful.”
Enrich your performance management processes by relying on sources like these:
- A performance management platform (as described above).
- Detailed manager logs. A good performance management system should allow you to maintain these logs electronically.
- 360 reviews conducted with peers. This data will show how effectively an employee works on a team, illustrating interpersonal strengths and weaknesses.
Managers can use all of the above sources to prepare feedback. Additionally, they can compare current performance against past reviews to assess employees’ progress.
This mix of sources balances subjectivity and objectivity. Subjective sources provide a high level of detail, sharing anecdotes that boost understanding. But using an objective tool (e.g., a performance management system) will help reveal any bias in subjective opinions.
Add Structure to One-on-Ones
Make sure employees are getting the same type of support in their check-ins with managers. How? By giving managers a standardized form to structure their conversations. They can complete a quick rating exercise and respond to specific questions on this form. Then, they can discuss relevant points with employees.
Calibrate Ratings to Ensure Consistency
HR should teach all managers how to use a standardized rating system to avoid inconsistencies. However, they should also go one step further.
“Despite training and the best of intentions, differences in the interpretation and application of the rating scale are almost inevitable,” asserts SHRM. “Accordingly, some organizations apply higher levels of review to calibrate ratings across a larger group or even an entire workforce. Organizations can develop a calibration system to ensure consistency between raters, between different departments and between jobs.”
In other words, HR should analyze managers’ ratings and address any inconsistencies in rating style.
Create Standard Policies
HR should create standard policies for supporting employees’ development and intervening if they don’t meet expectations. For instance, require managers to create a performance improvement plan for employees who fall below a certain rating. Likewise, offer a standard set of developmental trainings and mentorship to employees at each level in the organization.
Enhance Coaching Skills
As McKinsey emphasizes, fair performance management processes rely on managers’ ability to coach effectively. So, encourage managers to engage in ongoing development. Provide feedback on their abilities, surveying their employees to better understand managers’ aptitudes. With this support, each manager will strengthen their ability to lead others.
FAQs on Performance Management Processes
Here are the top questions we hear on performance management processes.
How does a lack of consistency in performance management affect the employer brand?
If employees view performance management processes as unfair, they’ll be less likely to urge friends to apply to work for your company. Additionally, those departing the organization will share their opinions with others, further impacting your brand. Hence, implementing consistent processes will promote recruitment and retention.
Is there one best method of performance management?
Different organizations can use different practices effectively—as long as they do so consistently. We recommend conducting multiple performance reviews every year. Many organizations successfully conduct them on a quarterly basis, for instance. Weekly check-ins with managers are also vital. Finally, using performance management software on a continuous basis will strengthen accuracy and understanding.
With strong performance management processes and tools, you’ll enhance team alignment throughout your organization. Employees will feel driven to put forth their best efforts when their managers use fair processes that support their growth. As a result, your teams will consistently enhance their capabilities and results.
See for yourself how the right performance management solutions will strengthen your organization. Demo our product!