Performance Management Best Practices Starter Guide: Learn the Basics

Performance management is a term usually used to refer to the process of making sure that employees, activities, and/or outputs in an organization meet their goals. 

It involves things like evaluating employee performance and targets, as well as supporting employee growth and improving employee experience. Good performance management should focus on both company goals and employee satisfaction and should be managed in a positive way, rather than by overworking teams or setting unreasonable goals. 

When done right, performance management can improve productivity, create a strong culture of happiness and trust in a company, and help businesses understand where they need to improve if they want to meet their goals. 

Why is Performance Management Important? 

Good performance management enables employees to perform better because they are being supported, they have good training and instruction, and they are in an environment that encourages growth and new ideas. 

At the same time, it also makes it easier for a business as a whole to meet its goals. When employee performance is good and individual strengths are obvious, it’s easier for managers to put people into roles and teams where they can thrive, which leads to targets being met faster and better overall productivity. 

Without performance management, companies risk employee dissatisfaction, which in turn leads to losing employees, revenue, and profit. Without documented performance management, analyzing and growing from past mistakes is also difficult.  

Best Strategies for Performance Management 

There are a few tried and tested strategies for effective performance management that are helpful to both employees and management teams. Here are some of the top proven strategies for companies to help support employees and meet their goals: 

Holding Frequent Performance Meetings 

Having frequent meetings between managers and employees is important for setting and meeting goals, but also for catching any problems before they get worse or for giving praise when it’s due. 

Having consistent meetings, especially one-to-one meetings, means that employers can give feedback, share strategies, and learn more about what their employees are hoping for in terms of growth and career trajectory. It’s also a chance for employees to ask questions, share ideas and get help when they need it. 

Encouraging Collaboration

Although, ultimately, company goals need to be set by CEOs and managers, setting goals within a team and asking for input or feedback helps build a culture where employees feel valued. This leads to better engagement and performance because employees understand the strategies for long-term goals and feel more invested in the business and its growth. 

Having regular meetings where employees can share opinions about goals or struggles with completing projects also gives managers a better idea of which employees show leadership potential and how they can better support their team to meet goals and grow. 

Having a Recognition Scheme 

Having an employee recognition scheme is a great way to boost performance and minimize employee dissatisfaction at work. Celebrating employees for good work sets an example to the rest of the team as to what is needed to hit company goals. It also makes employees feel more confident about their ideas and their opportunities for growth within the company. 

Making Sure Goals Are Clear and Achievable

Another proven strategy for performance management is setting clear, achievable goals with employees. These goals can be both individual goals and team goals, and they need to be clearly communicated with everyone, whether at a team meeting or in a one-on-one. They also should be goals that are measurable, so employees can actually know whether they’ve achieved them or not. 

Forming Individual Training Plans 

A good performance management strategy is to have training plans for each individual that are updated with every performance review and in one-to-one meetings. These allow employees to feel supported by the company, but they also reduce how many mistakes employees make when joining the company or learning new skills, which boosts productivity. 

Training plans can also include career development and things like classes, courses, or mentorship programs that help employees develop their skills and improve their status with the company. 

Asking For Employee Feedback 

Another effective strategy for performance management is for managers to ask for evaluations and feedback from employees. 

Without this, managers might be making mistakes or unknowingly making employees feel unsupported or overwhelmed. Having feedback sessions where employees can tell managers where they can improve or give feedback on the company as a whole helps to maintain a healthy culture, which makes employees feel valued, leading to better overall performance. 

The Biggest Mistakes When It Comes To Performance Management 

There are lots of common mistakes that companies make that can cost them time and money and even lead to them losing their team. Here are some of the most common mistakes businesses make when it comes to performance management: 

Not Setting Clear Goals 

Whether that’s not involving teams in decision-making processes or not accurately explaining company goals to employees, not having everyone on the same page will lead to bad performance and a loss of productivity. 

When companies don’t have clearly defined goals and targets that are shared with everyone in a business, it’s impossible to get everyone synchronized or effectively working towards the same goals. It can also lead to lots of unnecessary friction and misunderstandings and to employees struggling to get work done. 

Never Being Critical 

Obviously, positive feedback is important and one of the best ways to improve or motivate a team. However, some managers can fear giving criticism or negative feedback to the point that they let mistakes be made without saying anything. 

There are healthy ways to give criticism, and it’s important for employees and teams to know where their weaknesses are and where they can change. Performance management should always be about finding a balance between celebrating great performance and also helping employees to improve and do better by showing them where there’s room for growth or change. 

Not Being Intentional with Meetings  

Performance Management is there for a reason. It’s there to assess how well employees, teams, and a company as a whole are performing. 

Having tons of feedback sessions or meetings for the sake of looking like you are doing something doesn’t help unless they help you meet goals. Every meeting should have a clear objective, and employees should always leave a review knowing what they need to do next. 

Not Having Enough Documentation 

A big mistake a lot of people make with performance management is not having any sort of clear documentation in place. They have meetings but no notes, or they set goals but don’t track them. 

This makes it hard for both managers and employees to see where improvement is happening and where things need to change. It also makes it harder when it comes to training if there’s no clear documentation as to what strengths each employee has or what goals were missed in the last quarter. 

The Best Tools for Performance Management 

Because performance management is an ongoing process, it makes sense to use tools to help with automation. 

There are plenty of great tools that can help managers manage their teams and company goals, including tools for feedback, team meetings, goal setting, and training. Here are our top picks for the best tools to make performance management easier: 

Inspire is a tool that lets teams give ongoing feedback, do surveys, set goals and track them, and even gives managers performance review templates. It has all of the tools a manager would need for successful performance management, all in one place. 

We also love that it has some pretty sophisticated analytics tools to help teams see actionable data and track goals in a way that can be measured and learned from in the future. Pricing is done on a custom basis, and you can schedule a free demo here

Screenshot from inspiresoftware.com's why inspire web page.
Inspire helps your team not only manage performance, but analyze and iterate it to improve going forward.

Mirro is a tool designed for feedback and team recognition, with a focus on helping people understand strengths and weaknesses and creating an open company culture. Managers and employees can give each other feedback or request it, as well as give recognition to each other when they see something done well. 

One of our favorite things about Mirro is that there are features that let you chart employees and teams based on their strengths and diversity, making it easier for managers to put strong teams together for different projects. Plans start at just $5/ month.

Screenshot of Mirro.io's web page platform build a thriving culture
Mirro specializes in helping you put together the best possible project teams.

Leapsome is a tool that lets you manage employees and give detailed feedback and evaluations with scores that highlight different strengths. This makes it really easy to visually assess who works best in each role and makes it easy for employees to understand where they have room to improve. 

Leapsome also has training features that let managers create customized learning plans for teams, which give employees something to refer back to as they’re learning and help them feel supported from their very first day. Leapsome plans start at $8, and you can request a custom plan here.

Screenshot from Leapsome's website showing various features of their software.
If you want to provide customized feedback and training to your employees, Leapsome has you covered.

Final Thoughts About Performance Management Best Practices

Performance management is key to having a successful team and a successful business. It isn’t just about making employees feel valued and supporting them. It’s also about making sure the processes and systems are running smoothly and that company-wide goals are being met. 

Good performance management means that the right people are in the right roles and people are clear on the goals they are working toward. Ultimately, good performance management comes down to having good managers and regular feedback, but good software and tools can help improve overall performance.

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