One of the most effective ways to motivate your employees is to have a sincere and accurate appraisal system. Employees who feel recognized and valued are more likely to go that extra mile to help an organization achieve its objectives. A well-constructed performance management system can boost employee morale, reduce turnover, and inspire teams to excel in their field. A poor performance rewards system, on the other hand, can have a cascading negative impact on the whole organization. An organization’s rewards system sends a clear message to employees on what’s truly important and valued in the company.
Technology has changed today’s workplace and the way people work. Performance management systems have evolved as well to meet the challenges of the new world of work. Here’s a look at some of the key positive trends in today’s performance management systems:
1) Aligning Individual and Team Goals to Company Values
The core purpose of performance management systems is to improve organizational performance. To achieve organizational efficiency, it is crucial to streamline teams and individuals to common objectives of the company. If you are not clear about your core company values and goals, it is time to bring your team together and write those goals and values down.
At our recent leadership meeting at MoEngage, we invited managers across teams to share their inputs on best practices and company values. The session opened up many interesting conversations and insights that brought all of us closer to the common goals of the company and helped us create the company value board. Once company goals and values have been defined, it is easier to create an effective performance management system aligned to those values.
2) Adoption of Shorter Review Cycles
In today’s competitive marketplace, speed and innovation are crucial to success. A majority of companies have shifted to an agile approach in business. New product features are delivered in sprints or shorter cycles. Most teams today work in sprints and most employees seek faster career progressions. With a greater business focus on delivering value to customers and more remote teams in the organization, the very definition of effectiveness at work has changed from just hours spent at the desk to value delivered to business and stakeholders. There is more emphasis on competencies and behaviors that can help teams quickly respond to challenges at work.
“It makes sense for companies today to replace annual performance reviews with shorter and more frequent system of feedback. Apart from manager reviews, peer reviews are also gaining more importance in performance assessment. Companies are looking beyond numbers and rewarding positive behavior that supports a collaborative and happy work culture”
We are seeing a shift towards a more holistic and continuous performance management system where merit is recognized and rewarded in a matter of days. There are more frequent and informal check-ins between managers and employees. At MoEngage, we have eliminated the annual review cycle and incorporated a system that supports continuous performance feedback. High performers don’t have to wait for the year-end cycle to be recognized for their work. Success is celebrated and rewarded at town hall meetings and sessions that are conducted every quarter.
3) Adoption of New Technology and Tools
To effectively track and manage performance, you need the right HR software and tools. Companies today are investing more in employee-friendly performance management tools to streamline their strategies and save time. By integrating HR data with financial systems, companies can now proactively manage bonuses and rewards. Managers can spot high performers and struggling employees more easily and intervene as required. For employees, such tools provide greater visibility to track and manage their goals.
4) More Transparency and Collaboration
There is a greater emphasis today on transparency at work-place and creating a good employee experience. Honest and open communication is critical to the success of an organization. As HR leads, we are constantly conceptualizing programmes and forums to encourage more conversations and collaboration between teams.
Company meetings are good platforms to discuss company goals, revenue, strategy, marketing campaigns, and future plans. These sessions are a great way to get everyone on the same page and involved in the day-to-day affairs of the company. At MoEngage, we make it a point to celebrate all major company milestones.
5) Focus on Training Managers
Traditionally, managers were just given basic instructions on how to evaluate their employees and then expected to do the rest. Now there is more focus on training managers on effective performance management practices. Companies, both big and small are training their managers on how to effectively set expectations, give and receive feedback.
In many ways, employees are a company’s greatest asset. A well-constructed performance rewards system empowers employees to perform well and make significant contributions to a company’s growth. Take good care of your employees and they will take good care of your business.