Performance measurement and performance management work hand in hand to track employee progress and use that information to manage your organization’s strategies. They may sound like they’re the same thing, but some differences are important to recognize.
What Is Performance Measurement?
Performance measurement, also called performance evaluation or performance appraisal, is the process of tracking progress toward meeting company goals. There are usually four criteria that you should be tracking:
Measuring these things can help you to see where you stand in terms of meeting company objectives in these areas. A good performance management system should have performance measurement tools that can help you track everything you need to track your progress. Reports based on data collected over time can provide valuable insights that can show both opportunities for improvement and areas of success.
What Is Performance Management?
Performance management works with the data provided in the performance measurement process and managing your performance strategy based on those results. The performance management process involves making decisions and taking action based on what you’ve learned from the performance measurement process. The idea in performance management is to figure out how to improve performance in all areas that you’re tracking. Nowadays, you can resort to numerous performance management systems software solutions, which do these things automatically, saving you precious time and helping you focus on more pressing matters.
What Is the Difference Between Performance Measurement and Performance Management?
The primary difference between performance management and performance appraisal is that performance appraisal tracks where you are now, and performance management is planning to improve upon that performance.
Why Is Performance Management Necessary?
Many companies stop at performance measurement, thinking it’s enough just to track how things are going. However, that could mean you’re just repeating the same results over and over again without taking any steps to improve performance. Performance management is what’s necessary to actually take action and produce better results.
How Can You Add Performance Management?
If your company is already doing performance measurement, then you’re starting from a good place. You’ll already have the data you’ll need to get started. If you’re using performance management software for performance measurement, then you’ll also have the tools you need as well.
To break into performance management instead of just measurement, your company will need the following:
A Leadership Champion
Someone within the company’s leadership team needs to take ownership of the performance management process. It can be difficult for a company to make changes without someone championing those changes. Having even just one person push for making the change can go a long way.
Because performance management involves the leadership team planning a strategy and making changes based on data, the leadership team needs to be on board.
Schedule Regular Performance Management Meetings
Performance management is an ongoing process, not just a one-time thing. Decide on a frequency that works for your company’s leadership team, whether it’s monthly or quarterly. Once a year typically isn’t often enough. This holds true for the frequency of employee performance reviews as well. Frequent feedback is needed for employees to adapt their work to meet performance expectations in a timely manner.
Link Budget to Performance Strategy
Some of the actions you’ll need to take to improve performance may involve the budget. You may find that you need to hire more employees in a certain department in order to meet your objectives. The budget should line up with the overall strategy so that you have the funds to meet your objectives.
Communication is the key that makes performance management successful or unsuccessful. Performance management isn’t just one person making decisions on behalf of the company; it’s everyone working together to meet objectives. This means that everyone needs to clearly communicate at all times. Managers must communicate performance expectations to employees. Employees must communicate when objectives aren’t possible. Leaders must communicate strategies and goals with their teams.
A performance management software platform typically includes communication tools for this reason.