A business is nothing more than an idea without people in place to take action and make the business happen. And how well a business runs is a direct reflection of its employees.
Over time, a practice known as Performance Management has been put in place in most businesses to ensure that employees not only do the jobs they were hired to do, but do them well and are proud of the work they get done.
Performance Management involves planning, monitoring, developing, rating, and rewarding employees. Let’s find out a bit more…
1. Planning Your Business Workload
Planning is just what it sounds like: planning out not only what tasks need to get done, but the ways in which getting them done should happen. Involving employees in this process is critical because by involving them, they feel more a part of the process and less like monkeys who are trained to jump on command.
In other words, involving employees in the planning process improves morale. It also helps to make sure that there aren’t any gaps in communication to keep the plans from coming to fruition. After the planning stage, all employees should have a clear idea of what is expected from them.
2. Monitoring Business And Individual Performance
Monitoring is also self explanatory. Monitoring involves the monitoring of employees by their managers to make sure their tasks are getting done efficiently and takes into consideration how well the employees are able to function.
Monitoring ensures that unrealistic expectations aren’t set by management or the employees and keeps track of not only what is being accomplished but what has yet to be worked on.
3. Individual And Team Performance Development
Developing refers to keeping employees evolving to meet the ever increasing standards of a post millennial workplace. It could involve teaching new skills, implementing new procedures to make the work processes more accessible.
It sometimes means assigning new responsibilities to employees who appear to have outgrown their old ones. Development ensures growth of employees and the business.
4. Rating Individual Performance
Rating is the way by which employee performances are evaluated. It is imperative that employees are given a “report card” on a regular basis. Rating can address areas in which the employee needs to grow as well as the areas in which they excel.
It provides a clear map to where the employee stands at that date and time and is important to make sure the employee keeps up a good rate of Development within the business.
5. Rewarding Great Performance
Rewarding Employees is perhaps the most important part of Performance Management. A happy employee is a productive employee and rewarding an employee whose work is exceptional is a key factor in making sure that their level of work doesn’t deteriorate.
Everybody likes to make sure that they are appreciated. Studies have shown that employees who are rewarded for a job well done are far more motivated to keep performing at a high level than those who are berated or “punished” for being less than satisfactory.
Performance Management is a method by which a business owner can ensure that his or her business is constantly growing and achieving at the level they desire.
It’s an easy system to put in place and is the most effective system in making sure that business goals are achieved.
By: Martin Haworth
Posts Tagged ‘Performance Management’
Performance Management – Five Steps To Success
April 12th, 2010Six Steps for linking corporate strategy to the budget and the role of budgeting in performance management
January 1st, 2010An organisations budget is supposed to be the tool that turns strategy into action. Unfortunately, up to 60% of organisations do not link corporate strategy to the budget. This article discusses the importance of budgeting and provides six distinct steps on how to link corporate strategy to the budget and provides reasons why it is important to link these two variables.
Article
In some organisations, budgeting can be a guessing game, which can lead to a budget which is inaccurate. A budget should be created to direct the way in which the organisation will achieve its strategic goals. For budgeting to become the relevant process it was meant to be and can be; this group must be fixed.
Budgeting is part of a large, closed loop process called ‘performance management’. Performance management is a holistic approach to the way organisations direct and manage resources to achieve objectives. In the context of performance management, budgeting’s central role is to support execution through the allocation of resources to the activities that drive value.
In order to achieve a best practice plan that is linked to a budget, the following six steps have been created:
Steps 1 – Define key objectives
Senior executives should create short and long-term objectives for each section of the strategic plan. These objectives can be based around revenue, growth and operating efficiency. In order to measure the success of each objective, executives should assign a value to each objective.
Step 2 – Identify strategies and impact
The second step is to describe strategies that achieve the objectives. A percentage weight should be assigned to each strategy which outlines the likelihood of achieving that objective. Departments should also be identified who are be responsible for implementing the strategy.
Step 3 – Document assumptions
A list of key assumptions and measures should be made to address the business environmental factors that could affect the organisations ability to achieve its objectives.
Step 4 – Develop tactics and high level operational budgets
At this stage senior executives give the plan to the operational manager who implements the document strategy. For each strategy, managers must develop tactics to implement this part of the plan.
Step 5 – Assess and mitigate risks
Once the tactics have been created, the plan can be assessed. The plan must be: realistic, affordable, and alternative plans must be in place.
Step 6 – Check the plan and finalise it
The final step is to agree the amended tactics and costs/revenues assigned to each activity. The plan can now serve as a starting point for a budget breakdown.
Why is it Important to Link Strategy to the Budget?
This article has focused on one aspect of performance management – strategic management and provided 6 steps to achieve a best practice plan that is linked to the budget. When strategic performance management is linked with other performance management functionalities, the result is a closed-loop performance management system.
It is thought by Waal (2002:24) that organisations that focus on performance management and use performance management software outperform those who don’t. In a survey of 437 publicly traded organisations, those that had structured performance management systems produced better results than those who didn’t.
That is why many companies are turning to performance management to improve budgeting and to enable them to successfully link their corporate strategy to their budget.
By: suzi mezze
