Popular Performance Management Systems


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You know, so many times, mostly at the beginning of the year, I have clients come to me asking what they should do about evaluations for their team.

Assessments, Evaluations, Reviews, Appraisals – they’re all just terms that refer to a system where managers can assess an employee’s job performance, and provide feedback.

There’re several popular employee performance management systems, and each has its own set of strengths and weaknesses. In this episode, I’m going to give you a closer look at a few of the most popular.

First up, Goal Setting.  This is where the manager (sometimes with the help of the employee, and unfortunately, sometimes not) – well it’s where they set specific goals for the employee.  You’ve probably heard of SMART goals (specific, measurable, achievable, realistic, and time-bound.  Generally on an annual, or more frequent, basis the goals are reviewed to measure progress and ID areas for improvement.

Now in many traditional performance management systems, Goal Setting goes hand in hand with the Employee Self Assessment.  In the self assessment, the employee assesses their own performance.  When they go through this piece, it prods them to reflect on their strengths, weaknesses and where they have opportunities for improvement.

Another popular system is the 360 degree feedback.  That’s when you gather feedback from multiple sources, including the employee’s supervisors, peers and subordinates.  I have even seen these systems extended to include client feedback.  One of the benefits of a 360 degree system is that it gives you a more comprehensive view of the employee’s performance.  And, as with most of these, It can be used along with other performance management tools.

no matter which method or combination of methods you choose – remember they should all start with goals for the company.

And that makes sense – how can you tell your team which way to go, if you don’t know what way you want the company to go.

Next up – Continuous Performance Management.  It’s really just an ongoing process of feedback, coaching, goal setting and evaluations that aren’t limited to an annual or semi-annual cycle.  Continuous is exactly like it sounds – it allows employees and managers to have regular, informal conversations about performance, progress and development.

And finally, there’s the Balanced Scorecard.  The best way to describe the Balanced Scorecard is – it measures performance across multiple dimensions.  Generally it’s organized around financial, customer, internal process and learning and growth.

Now the methodology of the Balanced Scorecard is too extensive for me to review in one podcast episode.  But here is a VERY simplified explanation.

Imagine you’re a high school student and you’re trying to improve your grades. The goal setting performance management method is like setting a specific goal for yourself, like getting a B or higher in a certain class. You make a plan on how to achieve that goal, like studying more or asking your teacher for help, and then you work towards it. Your teacher checks in on your progress and helps you adjust your plan if you’re not doing as well as you wanted.

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The balanced scorecard method, on the other hand, is like getting a report card that shows your grades in all of your classes, not just one. It also includes other important things, like how well you’re doing in sports, music or volunteering. Your teacher and counselor look at your report card and see how you’re doing in all areas, not just one. They help you make a plan to improve your grades, but also to improve in other areas that are important to you.

So the balanced scorecard method is like looking at the big picture, at all areas that are important to the company; and how the employee stacks up against their individual goals under each area.

Now most often, I see some combination of Goal Setting, Self Assessment and Continuous feedback used to evaluate performance.  The employee and manager set goals at the beginning of the year.  Throughout the year they meet for regular information discussions around performance, progress and development.  And then quarterly, semi annually and/or annually they have a more formalized evaluation discussion.

Again, that’s what I see most often, but there are a host of combinations that you could use.  For instance, you could incorporate 360 degree feedback information into the process.  It’s really up to you.  But no matter which method or combination of methods you choose – remember they should all start with goals for the company.

And that makes sense – how can you tell your team which way to go, if you don’t know what way you want the company to go.

So, start at the top – at the organization level, then department, then the individual.  That’s the best way to make sure everything, and everyone is aligned.

And remember, what isn’t measured, isn’t managed.

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