Virtual HR Department

Managing Performance

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Companies that seek competitive advantage through their employees must be able to manage the behaviour and results of those employees. The effectiveness, efficiency and success of employees performing their jobs are significant contributing factors to the financial results of most businesses. Ensuring that employees' activities are aligned with the goals of the organization is the main objective of a performance-management system. An effective performance-management system can improve employee performance, recognize employee efforts, motivate achievement and develop employee capabilities. Other benefits can include lowering the cost of hiring and training through reduced employee-turnover rates, and achieving stronger business results through the efforts of a motivated and skilled workforce.

It is crucial for employees to receive feedback to understand whether or not they are falling short of, meeting or exceeding expectations. Providing feedback gives employees direction, by recognizing and rewarding desired behaviour while correcting undesirable behaviour. 

Performance-management systems vary in their complexity, from daily chats about project progression through very advanced competency models. It is an ongoing process through which managers and employees work together to plan, monitor and review work objectives, goals and overall contribution to the organization. Regular, respectful and clear feedback fosters better communication between management and staff and, ultimately, creates a higher-performing workforce.

Time and time again, it has been proven that employees place a high value on recognition and appreciation for their efforts. When asked how they feel about their company, most employee responses will have nothing to do with money. Money does not bind an employee to the company that they work for. What creates employee loyalty and satisfaction is recognition – the feeling that they are valued. In managing employee performance, you show employees that you care about their progress and want to guide them through their work. Employees who don’t receive any feedback on their work are far more likely to “slack off,” since they do not see a difference in benefits received from working hard versus putting in minimal effort. If there is no correlation between productivity and reward (e.g., recognition, appreciation, etc.), there is less motivation for employees to maintain high performance levels.  

Evaluating performance with employees, setting goals and acknowledging achievement is highly motivating. Getting through a challenge, reaching a goal and being recognized for your accomplishment feels good – it makes you proud of yourself and your effort. Furthermore, this feeling drives you to strive for even bigger goals. Pride, development and motivation in employees directly translate into greater productivity, efficiency and success for their employer. 

Performance management can greatly recognize and motivate employees, giving them the extra boost needed to go from an average performer to a superstar. Poor performers, on the other hand, benefit from performance management by receiving the aid needed to get back on track, and understanding how their performance affects organizational success. Once this link is made and employees feel the benefits from improved performance, they are encouraged to stay on track and further improve. 

This section discusses managing both good and poor performers, and provides tools and guides to assist you to effectively manage the performance of your employees.