How to Develop Good Performance Management System?

The goal of performance management is merely to increase performance of the employees so that greater productivity may happen. By inquiring how their employees perform and whether they contribute in increasing the value of the business, a company starts to set up a structure of performance management.

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Here are a few elements of performance management system which should be taken into consideration.

• Critical Success Factors
First thing first in setting up your performance management system is to define your CSF. CSF is an abbreviation for Critical Success Factors, i.e. the objectives you want to achieve in accordance with the company’s goals. For instance, if the CSF is to increase the number of sales, you will have to set up much stronger advertising and promotions, et cetera.

• Job Description
You must keep the job description to be accurate and up to date. Make it specific, clearly defined and include the duties, required skills, functions, goals and performance expectations. The job descriptions must be aimed toward the success of the department’s goals where the job applies.

• Performance Standard
Set a standard for performance management which defines the level of performance. Quantitative and qualitative approaches should be combined in measuring the performances. You will find that in some cases, measuring with numbers is easier while in another part of the study, several elements such as attitudes and skills will require the use of qualitative approach.

• Management Training
Conduct training on performance management in your company. This is to help the manager learn how to make an assessment. Skills which are included in the training typically include communication and interpersonal skills. Poor abilities in both areas are one of the causes that lead the performance management to fail.

• Employee Training
Set a guideline to improve employees’ performance and give them enough training in the areas where they are found to be weak. Create a timeline that will speak out the consequences of one’s failure in meeting the company’s standard.

• Generating Opinions
Get some opinions for your performance management program from employees and join them with your idea. Your employees may enrich your ideas of how a performance management should be as they are taking the viewpoints from different perspectives.

• Rewards
Keep in mind to appreciate each work which is well done. Give rewards to overachieving employees as they deserve them, such as bonuses, salary increases, free lunches or promotions. This strategy will in turn lead to the success of performance management. However, low performers must be also “appreciated” by sending them to training centers or do some job assessment.

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