Why Does an Organization Need Performance Management for Business?

What is Business Performance Management?

•   Welcome To the 21st Century

You can either go big or go home nowadays and it is the same with business. We are in the future and the future is a ruthless machine that turns the best businesses into rubble. If you want to survive in the market today you need to do something entirely new and different. Companies that harbor CEOs working on the ground level with their employees and charting out ideas for growth and engagement are the ones climbing the steep ladder that is the business world.

What does being engaged with them mean? It does not only mean being involved in the ruthless hiring process but also being with them every step of the way, till they are fired or promoted. It means a round the clock monitoring of what every employee in your organization feels and does. Up to the challenge?

•   Performance Management Definition

Imagine a tree. Done? Now imagine a trunk. That trunk is you. The fruit is your profit and the roots are your investments. However, most importantly, the branches are your employees that you are directly connected with every step of the way. The stronger the connection the bigger the rewards you reap from these luscious branches.

Performance management, simply put, is the process of staying well connected with your employees through which you can then work towards goals that are more long term in nature. These goals are everything your business works towards. Staying well connected with your employees could mean performance appraisals, though on a more regular basis than a simple annual maintenance. It is the way with which your company’s work atmosphere comes into being and then sustains itself for as long as required to meet those objectives.

•   Organizational Performance Management

Organizational Performance Management is best explained through profit. Every company needs profit and some simply want it. However, how it is plugged back into the company is where organizational performance management comes in. This profit can also be increased by reducing the cost of productionand finding nifty ways to do just that.

Another way with which a company can profit is if overhead costs are reduced. These overhead costs are usually fixed cost relating to utilities. Fixed costs are hard to eliminate, however, proper planning can always help Dana. Good manager knows where to identify what cost to cut.

Furthermore, a great way to help your business along is by measuring the levels of growth that it is experiencing. Take care of whether this growth is manageable or something that will drown the organization. Unprecedented growth can often be a bane rather than a boon.

Performance Management Program

•   Performance Management Cycle

There are four stages to every performance management cycle. The first stage of the cycle is managed according to the goals and larger objectives of the company in question. This first stage is called planning. It is the long term plan that a company undertakes for greater improvement. What is needed to be kept in consideration is the fact that these goals need to be achievable. Goals that are out of your reach lead to a lower morale in the company’s employees even if your company is making a profit.

The second stage is carrying out this first stage according to the same goals. The third comes soon after which is basically keeping a close eye on the employees and how they perform the tasks the company has allotted to them; whether or not these are done according to the company’s goals is also tracked.

Must Read: Aligning Performance Management with Business Strategy

Lastly, a company reviews any achievements they might have had and plugs all these findings back into the next year, turning it into a proper cycle.

Purpose of Performance Management

•   Provides a Glance into the Future

By consistently following the performance management cycle managers can predict what is going to befall the company. Any and every issue is planned for before it even comes into being. This way, the employees and the company are always prepared to handle any problem way before it serves to destroy the company and its atmosphere. Prevention is always better than a cure.

For example, if there exists a rift between two employees, a company can have preexisting departments to take care of the issue. The human resource department could handle the issue that exists between them or another department could simply take the employee in, making it so they do not exist in the same space as each other.

•    Boosts Employee Morale

When it comes to working in a large corporation, one can often feel like a small cog in a large machine. This is especially the case when one has little to no contact with the higher ups and is stuck in a nine to five job day in and day out, not knowing how they contribute to the company’s overall goals and objectives. Performance management takes care of this and more. It gives employees the morale boost they deserve.

•   Derives Feedback

Both the manager and the worker get to exchange feedback about the issues they may have with one another and the worker has full opportunity to raise a voice against any ill treatment or talk about their side of the story.

•   Helps Create Strategies

Once you know the problem you can very well arrive to the solution. As better planning leads to managers knowing the problem before it occurs it can also boost the strategies they create. Employees can, for example, be trained to perform a task they did not know to perform before.

Performance management is thus essential if you need your business to thrive. Otherwise, it is just a matter of time before other businesses realize the chink in your armor.