The success of a company is dependent on the success of its individual team members. It’s a pretty logical equation — if an employee feels that his or her performance objectives are fully aligned with overall business objectives, then he or she is likely to come to work each day fully motivated and ready to tackle new challenges.
That’s why it’s so important for your company to have an effective performance management program in place. After all, if your employees believe in a process that rewards them for doing great work, they’ll likely continue to set the bar high from a performance perspective. As a result, your business can continue to grow and succeed, whether that’s hiring more team members, securing a new round of funding, preparing for an IPO or expanding into new markets.
At Motus, we have a performance management program in place designed to include things like our culture, overall company goals and industry in mind. These will vary from one company to the next — but once you understand how they relate to performance, you’ll be ready to implement a process that meets the needs of your business.
Here are the top three benefits of having an effective performance management program in place at your company:
It promotes consistency and transparency.
When your company sets a specific timeline, format and process for setting goals and reviewing them, this builds consistency and transparency across the business.
Let’s consider an example. Company X is a small biotech company with a new management team, looking to implement a performance management program to measure individual team member success. They plan to do this with a five-step process, outlined below:
1. Individual team members set their own strategies, goals and metrics at the beginning of each quarter.
2. These metrics are reviewed by their managers and align with overall company and departmental objectives.
3. At the end of each quarter, team members self-assess whether they’ve reached or exceeded these performance metrics.
4. Their managers weigh in and provide feedback.
5. At the end of the year, each team member is reviewed by an annual review committee, with two outcomes: a performance rating and developmental feedback.
In this example, individual team members and their managers are on the same page and are both held accountable for their performance throughout the entire year. And when individual contributions roll up to the company’s mission, there’s no guesswork around what team members should be aiming for, quarter after quarter.
It allows for continuous growth through feedback.
Having a performance management program in place that includes meaningful feedback from peers and leaders across the business is a great way to foster continuous growth and professional development.
Let’s say Company X provides each individual team member with a bi-annual, anonymous survey to send out to their peers, leaders and direct reports. This is a great way for team members to get honest feedback needed to help them continuously improve, build additional skills and advance their careers to new heights, whether they’re an individual contributor or a manager of a team.
It rewards top performers.
With an effective performance management program in place, your company can reward top performers for their individual accomplishments.
At Motus, we reward top performers with a Rockstar Trip that recognizes exceptional performance and embodiment of our core values. This is a great way to motivate your entire company and show them that if they work hard, there will be meaningful ways to celebrate!
Having a performance management program in place also drives decisions around compensation and promotion. If an individual team member consistently exceeds expectations, he or she should be compensated and/or promoted accordingly. This type of positive reinforcement is a win-win for both your company and individual team members.
This blog post only scratches the surface of how an effective and well-documented performance management program can strengthen your business. If you already have a performance management program in place, consider the ways you can continue improving it — so it aligns with your company’s culture and purpose. If you don’t, you can start by sitting down with your team and designing one right away.
To get more tips for today’s HR leader, stay tuned for the next installment of the HR Hangout!
The HR Hangout is a recurring series on the Motus blog featuring advice from Jessica Chronchio, Director of People Operations at Motus. A proven Human Resources leader, Jessica has her master’s degree in Human Resources Management and is an active member of SHRM (Society for Human Resource Management). The topics covered range from empowering HR in the boardroom, best practices around people management, insights on industry trends, and advice for today’s HR leader.