Chapter two
PERFORMANCE MANAGEMENT PROCESS
Performance Management Process: 4 Steps to Success in 2023
Performance management is one of the most important processes your company can
implement.
It helps train employees, develop their talent, improve their relationship with their manager,
and take on more responsibility within the company.
When that effect is multiplied by the entirety of your workforce, it creates a lasting impact on
your company.
A high performance management process won’t reduce your turnover rate to zero, but it will
help achieve goals, improve collaboration, and keep employees engaged. Here’s what it looks
like.
What is the performance management process
The performance management process is an ongoing series of meetings and check-ins
between a manager and employee that plans, monitors, and reviews the employee’s objectives,
long-term goals, and overall impact on the company.
While it is often thought of as an annual or bi-annual performance review delivered from
management to an employee, performance management is at its most effective when it is
performed throughout the year in a collaborative manner.
We know it as Continuous Performance Management.
What are three stages in the performance management process?
While comprehensive as a process, performance management can be broken down into three
distinct stages: coaching, corrective action, and termination.
Coaching: The coaching stage of performance management sets the tone for your company
and the success of your employees. Coaching involves training, outlining standards and goals,
two-way feedback, and collaboration to help employees get better. More on this later.
Corrective Action: If an employee isn’t meeting the standards and expectations of the position
after coaching from their manager, the next stage of performance management is corrective
action.
Corrective action calls on the manager and employee to work together to find the reasons for
poor performance and develop a plan to improve the situation.
Termination: If coaching and corrective action fail to improve an employee’s performance,
the final stage of the performance management process is discharging the employee.
While a difficult decision to make, the termination can have a positive effect by boosting team
morale and offering you a chance to improve at that position.
What are the steps in the performance management process?
When your performance management process is humming, it’s largely remaining in the
coaching stage. That’s not to say every day is roses, but it means the team is responding to
challenges in the moment with coaching and collaboration – and performance isn’t suffering
drastically as a result.
A successful coaching stage consists of four main steps: planning out goals, monitoring
performance, reviewing results, and rewarding success.
Planning: This step calls for establishing expectations and developing a strategic plan for
employees. Here you should set S.M.A.R.T goals, determine deadlines, and make clear how
they will impact the team and the entire company.
Monitoring: Crucial to achieving goals is consistent monitoring of progress. You don’t want to
be a helicopter manager, but you do want to frequently check in with employees to help work
through problems as they arise.
Whether it’s weekly, bi-weekly, or monthly, consistent check-ins keep employees and
managers working together and on the same page.
Reviewing: With frequent check-ins, performance reviews turn into more of a formality rather
than an intensive process. This is the official place for employees and managers to share their
view on how the year went and look back on the progress and achievements.
Rewarding: Nothing plays a bigger role in employee motivation than this. Rewarding
employees for their efforts and achievements throughout the year, not just once at the end of it,
lets them know their talents are appreciated and encourages them to continue to perform at a
high level.
Inadequate rewarding can leave them discouraged, unappreciated, and looking for a new job.
What are the key elements of performance management?
Every company may have unique aspects to its performance management process, but as Jo
Rosser points out, in general, every company with a good one keeps these core traits in mind:
Consistency: Coaching approaches and tactics may vary, but the performance management
process should be the same for everyone. Inconsistencies will only add confusion and
frustration.
Accuracy: When recording key outcomes throughout the performance management process,
accuracy is essential. If need be, you want your documented record of events to be an
unimpeachable account, not an inferred one. A tool like Conversations® keeps all those details
in one place.
Futureproof: Futureproofing your performance management process doesn’t mean peering
around every possible corner, but rather, prioritizing agility. So as circumstances change, you
can too.
Employee engagement: Performance management is at its best when it is a two-way street
with employees and managers working together. Engaged employees at all levels will improve
the process itself by helping companies strengthen their coaching and avoid corrective action
and termination.
Ease of use: Part of keeping employees engaged in the performance management process is
making it an easy system for them to use. Hurdles or cumbersome steps in this process won’t
help the employee or the company.
A performance management process is just that – a process. It’s not a checklist or a passive
responsibility; it requires active participation on behalf of employees and managers.
The result is aligned teams, inspired employees, and a culture that nurtures personal growth
and development, i.e., an effort that is well worth it.
