Performance management process: A comprehensive guide

Achieving the goals of your organization isn’t a one-person job. It’s important to foster a culture of continuous learning and open communication among your teams with performance management. This guarantees that leaders and their teams are on the same page in planning, monitoring, and achieving objectives that create a lasting impact for the business.

Everyone wins with an effective performance management process. In this article, we’ll help you achieve breakthrough results by rounding up the benefits, strategies, and best practices for good performance management.

What is performance management process? 

The ultimate goal of the performance management process is to align individual and team goals with the objectives of the company as a whole. It’s a systemic cycle of continuous planning, monitoring, and reviewing to figure out what works and what should be changed.

This process involves frequent, open, and honest communication between managers and team members through a series of meetings and check-ins. This is the perfect setting to lay out expectations, measure progress, recognize good work, and identify and act on areas that need improvement.

Why is performance management important? 

A good performance management system is one of the best investments for any organization. Here, we’ve listed more reasons why you should implement performance management for your teams.

• Boosts employee performance and confidence - Employees will have a better sense of direction with effective check-ins that tackle issues, identify good practices, and revisit objectives.
• Identifies development needs - Giving teams the training they need is made simpler when performance management identifies individual gaps and organizational needs.
• Improves productivity - When teams know their strengths and weaknesses, they can efficiently allocate time to achieve goals and identify gaps. 
• Aids in long-term career planning - Keeping track of how team members perform is important in informing promotions and other career decisions.
• Facilitates fair compensation - With the data and insights collected from performance management, you can incentivize the right behaviors by tying pay raises and other rewards to performance metrics.

5 Steps to the performance management cycle 

Performance management strategies have evolved from the old annual review process to a more dynamic and continuous approach. These five steps guarantee that goals are consistently met and teams receive regular recognition through frequent check-ins and reviews. 

In this guide, we'll break down each stage to give a clearer understanding of the modern performance management cycle.

1. Planning

The first part of the cycle is all about setting the stage for success by laying out specific and achievable goals for the employee. These goals should support the overall strategy of the organization while setting goals for individual and team growth.

During this phase, you’ll pinpoint areas for training and development so that everyone has the skills they need to thrive. This way, your team gets a clear vision of their objectives and a roadmap for how to reach them.

2. Monitoring

After laying down the plans, it’s extremely important to consistently check how the team is progressing, identify problems and potential issues, and adjust the goals as needed. It’s best to do this monthly or quarterly to make sure that the momentum is kept going and everyone stays on track.

3. Developing

This phase focuses on knowledge and skill enhancement for your teams that are in line with strategically improving their performance and achieving individual and organizational goals. 

To come up with effective development ideas, focus on the areas of improvement identified in previous check-ins. You can also use online training platforms to make things simpler for you and your teams.

Platforms like SC Training (formerly EdApp) offer a focused approach to guarantee that your training and development efforts hit the mark. Check out its editable course library with over 1,000 training materials that you can tailor to your team's specific needs.

4. Rating

Performance reviews where team members will be evaluated using a specific and fair set of criteria are important. This helps leaders evaluate performance against the objectives, celebrate successes, and work on areas of improvement.

5. Rewarding

Don’t forget to give hardworking employees a well-deserved pat on the back. Reward their contributions and achievements with bonuses, pay increases, or promotions to improve employee retention and performance.

Best practices for effective performance management 

Whether you’re kickstarting your performance management journey or improving your existing process, here are some key strategies that your organization can adopt to enhance your system:

Foster open and continuous communication

Communication builds trust. You want employees to feel comfortable speaking up and sharing their ideas during meetings. Making employees feel heard and valued encourages collaboration and builds a stronger sense of community.

This is another area where you can take full advantage of all-in-one LMS platforms. Take SC Training, for instance—it boasts fantastic social and peer learning features that make it easier for teams to connect, discuss, and put ideas into action.

It’s also important to keep communication lines open with regular check-ins and performance reviews. This way, you and your team can stay on top of your progress and know exactly where you stand in reaching your goals.

Define SMART goals

Clearly defining your goals builds a strong foundation for your performance management program. To make goals more structured and manageable, try adopting the SMART framework. 

The acronym SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. When planning and choosing your goals, make sure to check off these five guiding principles. Doing so will boost your chances of success!

Document performance

Keeping tabs on your team’s performance is crucial for planning your next moves. Luckily, you no longer have to drown in paperwork—simply switch to digital records for your employee management data.

When it comes to learning and development, SC Training steps up with a robust reporting and analytics dashboard. It lets you stay on top of compliance and easily check your team’s progress with a quick glance.

For a performance management system to be effective, it’s not enough to do it once or twice a year. You want to review performances efficiently and address challenges head-on. So it’s best to have frequent check-ins throughout the year.

Encourage personal accountability

It’s also helpful to let your employees evaluate their own performance. Fostering self-awareness teaches team members to take ownership of their responsibilities. It also sparks the initiative to brainstorm ideas and accomplish tasks.

Personal accountability also boosts professional and personal growth as they learn the value of learning from their mistakes and taking action to overcome obstacles.

Use technology to adapt and evolve

The performance management process has transformed in more ways than one. It’s important to keep up with the times by making the most out of the tools that are available to you. There are abundant options for performance management platforms that can streamline your current system while helping you stay up-to-date on industry trends.

Top 5 employee performance management solutions

There are many online platforms that can help make your lives easier by doing the brunt of the work with tools that will improve and simplify important aspects of managing performance. Check out our top recommendations here:

1. SC Training (formerly EdApp)

Managing team and individual performance is made easier, simpler, and smarter with SC Training. This leading e-learning platform also doubles as a performance management software. From your learning and development needs to boosting employee engagement, SC Training’s got you covered.

Apart from its course library, SC Training has in-house instructional design experts who can create masterful and targeted training content for your team’s knowledge and skill development. Take back your time and get in touch with their expert team to learn how their course creation services can amp up your training.

You can also get feedback and insights in real-time so you immediately know what works and what doesn’t with SC Training’s in-lesson discussions feature. This is a great way to facilitate an open discussion and drive employee engagement.

Elevate your team’s performance with the top tool on the market. Join SC Training today!

2. Peoplebox

Peoplebox is a performance management platform that uses AI to generate practical insights from people and business data. You can use it to set and track objectives and key results (OKRs), run performance reviews, and manage one-on-one meetings. It also has integration capabilities with popular work tools like Jira and Hubspot. 

3. 15five

15five mainly caters to HR leaders and managers by providing AI solutions for engagement, retention, and management effectiveness. It also hosts an HR outcomes dashboard that tracks important data and transforms it into guided actions that can inform your performance improvement plan.

4. Namely

Namely is an employer solutions website that offers different tools for HR processes. It has easy-to-use HR technology that can assist in your payroll administration, automate onboarding tasks, and deliver analytics and ad hoc reporting.

It also has a built-in newsfeed that helps teams connect through employee recognition, performance reviews, and a goal-setting tool. Namely is also a compliance software that can aid you in keeping up with industry standards through training courses and toolkits.

5. Lattice

Lattice is another AI-powered platform with tools that can help you understand how employees can work better, auto-suggest agenda for one-on-ones, notify weekly status updates, and run performance reviews faster. 

You can also use Lattice to conduct surveys to measure impact and engagement, visualize employee data to improve strategies, and track progress to reach goals and hit OKRs.