Characteristics of an Ideal Performance Management System

Performance management systems bring clarity and objectivity to the process of managing, training and rewarding employees appropriately. Effective performance management systems begin with clearly defined job expectations supported by active feedback. Employee performance is measured using both objective external criteria and a broad assessment of the employee's overall contribution to the workplace.

Performance management systems can be divided into three stages. In the first stage, managers establish a set of realistic expectations and communicate them to the employees. In the second, they provide ongoing guidance and coaching to help employees improve their job performance. In the third stage, they assess how well employees have achieved the established goals, what improvements could be made and any changes to the job expectations. Managers also use the assessment to determine which employees should receive raises or promotions. An ideal performance management system is one that allows managers to perform all of these tasks fairly, accurately and effectively.

Both employees and supervisors sometimes believe that they do not have enough input in the company's performance management system and that the process is not objective or relevant. To prevent this problem, encourage managers and employees to define the job expectations themselves within the overall framework of company needs. Job expectations always should be as specific and clear as possible. For example, a salesperson might be asked to exceed the minimum quota by 10 percent each month, or a receptionist might be asked to answer every phone call with a friendly, professional greeting. In an ideal system, every employee knows exactly what her job is and what standards must be maintained.

Ideal performance management systems include continuous feedback from management. If a supervisor sets clear expectations but provides no further guidance until the next scheduled performance review, employees may fall behind without knowing how to improve. Supervisors must check how employees are doing on a frequent basis and offer suggestions for improvement based on accurate information and realistic goals. For example, if a salesperson falls below quota for the month, the supervisor should check on factors that may be limiting his sales performance, such as not using the script consistently or not attempting to overcome objections. Feedback should be geared toward improving performance rather than criticizing the employee.

The performance assessment should include objective and measurable factors but should not be limited to the numbers. For instance, a customer service professional should be assessed on factors such as percentage of calls resolved, length of average call and other metrics. However, these measurable criteria may not capture everything the employee does for the company. Other factors such as positive attitude, helpfulness toward coworkers or willingness to work late during busy times also should be taken into consideration. An ideal performance management system assesses not only the tangible contributions of the employees, but also the intangible personal characteristics that may make a less-than-perfect employee a valued member of the team.