Performance Management has become a vital component of Human Resource Management and Development in recent times. It has evolved from the old “annual appraisal” to an integrated, cloud-based management system capable of delivering real-time business intelligence on individual performance regardless of the size of an organisation.

This trend also suggests that as companies leverage on technology to manage all aspects of their business, performance management systems will play a pivotal role in helping them gain a competitive advantage. This article outlines several characteristics of automated performance management systems as a strategic business tool.

Redefining Performance Management

In a process that had remained static for the past 4 to 5 decades, performance management for most companies consisted mainly of an annual appraisal. The view of managers was that it was a process that they had to complete, and deliver to the management team, to account for the contributions of their department or teams.

This view is now replaced with the recognition that, performance management is a strategic tool that everyone in an organisation uses to achieve individual and collective goals. It is no longer a costly and cumbersome chore but a necessary component for maximising results and performance. This change in both outlook and application is made possible with information technology which provides all key elements of a management system at a fraction of what it previously cost. It also allows organisations to achieve the following:

Align individual Goals with organisational goals. This ensures that every employee is aware of his or her role in the overall plan, and actively contributes to the success of the company in measurable ways. This was previously impossible to achieve for manual appraisal systems because one of the limitations of manual systems was that employees’ goals were usually not clearly defined or measurable, making appraisals mostly subjective and bias.

PROVIDE MANAGERS LIVE updates on performance indicators. Manua systems could not provide managers with the means to analyse the data collected during appraisals, much less measure employees’ performance against organisational goals. The manual data crunching and paperwork involved made it almost impossible to achieve anything meaningful within a realistic timeframe. Now, reports can be generated instantly, and complex indicators built in real-time without human intervention, making the task of analysing performance significantly more productive.

PROVIDE MULTIPLE ASSESSMENT methods.

Automation also made it possible for managers and HR staff to use and develop multiple assessment methods and frequencies to obtain the best view on the performance of individual employees.

These assessments can be customised according to the role of the individuals or the demands of the business, including reviews which measures organisational and job related competencies, project-related activities, ability to meet business and development objectives, and behavioral and personality type indicators.

Performance Management has changed so much that it now receives greater buy-in and participation from managers and employees. Most of all, it allows companies to align overall organisational goals with individual or departmental goals, creating breakthrough improvements for the whole team.

Continual Performance Review

The shift from traditional annual appraisal to a more holistic approach of continual performance management is also made possible with automated systems. This approach allows managers and employees to record performance issues and achievements, in real time, throughout the year, building a data base of facts and events to form the basis of the face to face review.

When the time comes for the review, both manager and employee have comprehensive records of achievements and areas identified for further development and coaching, allowing them to meet with data and history to draw on to complete the review. A performance rating can then be achieved based on facts instead of memory or opinions, and the employee receives an objective review that he/she is more likely to accept.

This ability to capture and access this information instantly is invaluable to the effectiveness of the performance management system. It promotes collaboration and dialogue between managers and employees, and helps ensure that they are both in the process, and are on time, to meet specific goals.

Changing Focus from Job Descriptions to Work Achievements

Where in the past, appraisals were conducted based on the employee’s job description, HR and Managers can now use automated performance management systems like Revuu to drive improvements and determine performance targets based on goals and achievements.

Organisations are beginning to realise that relying on a job description as the only benchmark for measuring performance cripples their ability to build a highly talented and motivated team. Job descriptions are usually static; and given the pace that employees need to adapt to changing demands, they rarely reflect the actual requirements from an employee in toda changing business environment. Moreover, there are other components such as activities, competencies, behaviours, and personal development that are not usually defined in a job description.

Lowering Costs

Previous versions of performance management systems were mostly designed as standalone software programmes running on individual workstations. These required massive administrative input, especially for large organisations with multiple locations. HR departments spent many hours handling data entries and crunching numbers to generate reports. Changes made in one system do not update automatically in others, and ensuring accuracy becomes a real challenge.

With cloud-based performance management applications, organisations can now integrate multiple systems like payroll, training records and operations onto a single platform. This reduces costs substantially, allowing the HR department to focus on supporting the organisation in strategic issues such as meeting legislative compliance and talent management.

Performance Management Becomes a Strategic Tool

Automated performance management systems are fast becoming an important component in helping organisations achieve strategic objectives. By enabling companies to align individual employee’s goals to corporate goals, and to measure these goals in real-time, many are beginning to view this relationship as THE means to achieve breakthrough results in performance. Companies also see this as a more effective way to direct and manage human resources

Improve Employee Moral and Retention

Having identified automated performance management systems as a more effective way of managing staff, organisations are also seeing vast improvements in employee morale and retention. No longer regarded as just “factors of production”, employees are now “Internal Customers”, and as customers, they need to be engaged and motivated to make meaningful contributions.

In a business environment where there is no real barrier to entry, the only sustainable competitive advantage is the pool of human resource talents that an organisation is able to attract and retain. Automated performance management systems not only support compliance with regular reviews and development planning, they also go a long way to ensure that your most valuable assets are kept motivated and productive over time.

Succession Planning

Automated performance management systems generate data that can be used in implementing systematic succession planning, enabling the HR Department to identify potential candidates for accelerated development. These employees can then be put on mentoring programmes to prepare them for leadership roles in key positions. From the perspective of the employee, the organisation is seen to be actively developing his or her career path. This builds loyalty while ensuring continuity for key positions within the organisation.

Conclusion

As performance management progresses from annual appraisals to cloud-based integrated management platforms, organisations looking for sustainable competitive advantages will rely more and more on these to build and retain their pool of talent. They will use these to drive performance in a predictable and consistent manner to achieve business objectives.

For managers and employees entrusted with delivering breakthrough results, performance management systems will ensure that they apply themselves against clearly defined goals that are closely aligned to the company’s strategy. Ω

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Craig Rowney
Craig leads our Performance Consulting division and has built a reputation for the development and delivery of innovative consulting and training solutions in the automotive and motorcycle industry at both OEM and retail level. Craig spent 7 years as the Director in charge of Consultancy at Deloitte Motor Industry Services and prior to this, 8 years in Sales and Marketing and Dealer Development with Mitsubishi Motors and Toyota Australia. This experience has been supplemented with a stint in retail allowing him to bring a unique perspective to consulting and training. Craig has worked with the majority of brands in Australia and many of the country’s largest Dealer groups and extensively in Asia.