Objectives and Key Results (OKRs for short) are changing how companies define and communicate success. Why not have a read through our free beginners guide to OKRs to get more information on how you can align and grow your company.
In one form another, performance management has been lingering in the recesses of every people-centric organisation since the dawn of time. After all, people are the heart and the machinery of your business, so it makes sense to be sure that how they’re performing within the company – and how this performance is reflected in results – is being measured and managed in some capacity.
Personally, however, I feel that there’s much more performance management can contribute to business growth and success. In a recent research paper, I described the failings of traditional performance management, as well as the benefits that should be expected when businesses get it right. For anyone interested in putting a performance management system into place, or who is currently doubting why their organisation has annual appraisals, there’s plenty to be gained from reading about these positive outcomes – and if that sounds like you, then I’m pleased to say you’re in the right place. Below I’ve outlined the most prominent of these outcomes, and I invite you to explore them further with me in an effort to understand just why it’s worth putting your money where your people are.
Goals, Aims, and Objectives
For businesses and their employees, effective performance management offers up an opportunity to accomplish two specific goals which every business up and down the land strives towards: better profitability and greater results (be that measured as higher efficiency, more completed projects, or increased sales figures). Both of these objectives need people to be working at their absolute best and moving in the same direction as the company itself.
Performance management helps by regularly assessing an employee’s work, as well as their strengths and weaknesses. When senior managers feed this information back to employees and then offer adequate development opportunities and support, they’re putting themselves in a much better position to shape individuals into the roles which make the most of their abilities. When you have these ideal people, it’s just a matter of time until you find they’ve become exactly what your business needs. In short, everyone who ever said you should ‘invest in your people’ was absolutely spot on!
Loyalty That Can’t Be Bought
If the traditional benefits of goal-reaching aren’t reason enough for implementing a performance management system, consider this: numerous studies of late have found that millennials respond much better to employers and organisations who invest in them as individuals.
This means that every business – from start-up to multinational – that takes the time to develop their millennials benefits from a kind of loyalty that you simply can’t find anywhere else. And before you dismiss this as ‘pandering’ towards the younger generation, keep in mind that not only do they have the knowledge and wherewithal to navigate innovative new technologies and thought practices, but they’re also a generation that’s thirsty to learn and develop; their loyalty could ensure your business is constantly a step ahead of the competition (and isn’t that something we all want?).
Therefore I think you’ll agree that it makes total sense that any business employing millennials – or looking to attract them to roles – could do a lot worse than offering up an effective performance management system with tangible benefits to their teams.
So Why Doesn’t Everybody See These Benefits?
Despite the enticing reasons I’ve presented above acting as a great motivator, executing great performance management systems actually continues to be a persistent challenge among businesses of all sizes and in all sectors, with many organisations defaulting to an annual appraisal approach – a choice which actually undermines the performance we seek to encourage, and limits the positive outcomes effective performance management can generate.
I’ll be going into more detail about why this ‘default’ approach to performance management no longer makes the grade in my next article, but in the meantime some homework for you! I invite each and every one of you who has read this to evaluate the positive outcomes of your business’ current performance management system and how they can be improved upon – you might just be surprised. And please, if you have any questions, don’t hesitate to get in touch or connect with me on LinkedIn – I’d be more than happy to discuss further.