Every company will at some point face challenges in performance management. The secret to success is knowing how to overcome those challenges. The following are some common problems with performance appraisal that HR may face.
Challenge #1: Setting Goals for Employees
One of the biggest challenges in performance management is goal-setting. If your company doesn’t already have a culture of setting clear goals, then it can be difficult to implement it the first time. However, once the practice of clearly defining expectations is in place, it’s much easier to keep it so.
Why Goal-Setting Is So Important
Employees need clear goals and expectations. Without them, it’s difficult for employees to know exactly what their managers are looking for. They may not perform as well because they aren’t sure what they need to do. On top of that, they might not be as motivated to perform well. Having clear guidelines gives employees something to work toward and achieve.
Clear goal-setting also helps to track who’s performing above and beyond expectations and who may need additional training or motivation. With clear goals, it’s easy for managers to identify areas of improvement for employees.
Solution: Use a Performance Management System
While you technically don’t need software to manage goal-setting, it’s a lot easier to do with a performance management system. It’s easier for both managers and employees to view a set goal and see how the employee’s current performance compares to the goal. Employees can check their objectives any time they need to and managers can monitor progress easily.
Challenge #2: Aligning Employee Goals with Company Strategies
The second major challenge that HR may face when it comes to performance management is knowing how to align those individual employee goals with overall company strategies. While employees do need clear goals, those objectives should help the company to meet its overall goals.
Why Company Strategy Is Important
Having an overall company strategy can help to define what the company is hoping to achieve. Once you have that overarching vision, it’s easier to put the pieces together at the employee level and align their objectives with that goal. Progress toward an overall goal is easier to measure when it’s defined. Plus, employees are often more motivated when they can see how their contributions are helping the company to achieve success.
Solution: Recognize Employee Achievements
Recognizing employee achievements and rewarding them for their efforts does increase engagement and also improves performance. Employees also need to know how their efforts are contributing to the overall success of the company. Showing them how their individual goals align with the company’s focus and goals can help them to see how they fit into the bigger picture. Knowing that their work isn’t just busywork can help employees to feel like they are making meaningful contributions and are an essential part of the organization.
Challenge #3: Giving Proper Feedback to Employees
In many performance management examples, organizations aren’t giving proper feedback to employees. It’s difficult for employees to improve without regular, useful feedback. A lot of organizations do annual performance reviews, but this information often comes too late to help employees improve their performance in a timely manner.
Why Regular Feedback Is So Important
Employees do need to know right away if their performance isn’t meeting expectations. They can’t fix a problem that they don’t know exists. It’s also essential for employees to receive positive feedback. Hearing only negative feedback and not knowing what they’re doing well can have a demoralizing effect that could impact performance. Employees who feel like they can’t please their managers may not put as much effort into doing well.
Solution: Track Employee Performance
A performance management system continually tracks employee performance. Managers can easily see when there’s a problem and when someone has done very well. They can therefore provide feedback, both positive and negative, at the moment when it’s most likely to make a stronger impact. On top of that, this tracking data can be used to identify employees who are ready for promotion and those who might require more training.