Traditional performance management processes have been under quite a bit of scrutiny and, honestly, it's no wonder. Both managers and employees are frustrated with antiquated processes that don't reflect the changes happening in today's workplace, especially when it comes to technology.
But before companies can have a conversation about modifying existing processes, it's important to take a look at what both managers and employees have to gain in the performance management process. For performance management to be successful, everyone needs to ask the question, "What's in it for me?" - also known as the WIIFM.
Connecting performance appraisals and the bottom-line
Performance management and performance appraisals are two different things. Performance management is the companywide process of discussing business performance, goals and work. Performance appraisals are a piece of the performance management process focused on an individual's contribution. Often, the performance appraisal is the most visible component of organizational performance management.
Employees and managers have a vested interest in the performance appraisal process because it impacts the company's performance management process. Ultimately, it's the performance management process that links directly to organizational goals and the bottom-line.
Managers and employees have the same appraisal goals
When it comes to performance management, the performance appraisal serves a valuable role for both managers and employees. It's true that performance appraisals are often a factor in determining pay increases. But on a strategic level, the goals of the performance appraisal connect to company goals and initiatives. Here are three examples:
Confirm current performance levels
One of the first things that a performance appraisal does is reflect on current performance levels. We know performance conversations aren't supposed to be a surprise. For the employee, this part of the appraisal conversation provides confirmation that they are meeting company expectations.
Managers should be taking advantage of this opportunity to find out about their own performance. Managers can ask what they are currently doing that helps the employee perform at a high level. They can also find out what more they can do to help the employee improve their performance.
Set performance goals
After the conversation about current performance, it's time to talk about the future. In theory, the company's goals should be the manager's goals; and the manager's goals should be the employee's. Drawing a clear line of sight between employee goals and the company is essential for employee engagement, motivation, and productivity. Employees should understand what is expected of them - and why.
Managers will want to make sure that the employee's goals align on several levels. First, it's important to find out if the employee is willing to embrace the goals being discussed. Next, as a manager, the goals must align with your performance goals. Otherwise, how will the company achieve their goals? Lastly, managers need to step back and make sure they are able to support the goals being discussed. If a manager cannot support the employee's goals, then they are setting the employee up for failure.
Understand future career aspirations
So far, the performance appraisal conversation has focused on the immediate past and present. Now, it's time to talk long-term. In order for the company to continue having performance management success, they need to know where employees want to be (career wise) in the future. Employees need to share their career goals and the steps they would like to take to achieve those goals.
In turn, managers need to monitor these conversations to ensure that employee goals and company goals are in alignment. If they're not, then additional discussions might be necessary to keep the employee engaged. Employees are smart - they will often stay engaged with companies, even when they have no long term future, because the company is open, honest, and allows them to learn.
Regardless of your existing performance management processes, managers and employees should have the same clear goal of helping the company succeed. That's why the fundamental components of a performance appraisal conversation are important to managers and employees. Not only because they fulfill an internal process for succession planning or compensation. The performance appraisal conversation fills a need in the performance management process. It establishes the expectations and support for the organization to accomplish its strategy.