High performance looks different at different organizations — and in different departments within the same organization, and in different teams within the same department. Two people with the exact same job might have different methods for accomplishing their tasks, but that doesn’t mean that one is destined to be less productive than the other.

Thus, businesses need a plan for evaluating performance and ensuring their workforce performs to the highest practical level — but a business cannot expect to find success by copying another company’s plan whole cloth. Fortunately, there is a simple set of steps for creating a unique and functional performance management system, and they are as follows:

Understand Performance Benchmarks

When an organization’s current performance management system is falling short, it is imperative that business leaders perform thorough research to understand how to design a more effective performance management process.

The best place to start is reading case studies from businesses that have successful performance management strategies, which will provide insight into the critical elements of a performance management system. Once business leaders have a better understanding of how effective performance management systems function, they can begin designing their own using the benchmarks they have identified in other organizations.


Define Organizational and Individual Goals

Performance must be measured against a clear, well-defined goals. Generally, businesses enact performance management to help ensure that teams are meeting common goals shared by many members of the organization, but some business leaders find it useful to track performance as it pertains to individual goals, as well, to keep employees engaged and happy as well as productive. Managers who struggle to create goals can take advantage of the SMART goal system, or they can take inspiration from some of the following most popular organizational goals:

  • Develop a culture of performance amongst employees
  • Align individual behavior to organizational values
  • Identify personal development needs to further performance

Once business leaders have set their goals, they need to define what will constitute success. The success measures will determine what and how the organization will track performance within its management system. For example, if a goal is to improve employee motivation and drive, a business might utilize employee engagement surveys and turnover rates as tools to track success.

Evaluate the Performance Management System

The process of refining an organization’s performance management system does not end when business leaders begin to enact new policies. Managers need to continue collecting data on the effectiveness of the ongoing performance management system, so they have the opportunity to identify inefficiencies and continue improving processes into the future.

The type of data businesses need to collect to perform evaluations will depend on the goals and success measures they set. Eventually, goals and success measures will need to shift, which might create the need for new performance management processes within the system.


Work Together to Improve Performance Policies

Business leaders are typically tasked with developing strategies for monitoring and improving employee performance — but they should not take on this task alone. Any plan that involves employee performance should be devised with the assistance of employees themselves, who often have a better understanding of their capabilities and capacities than management does.

Workers can help business leaders set relevant and realistic goals while identifying likely obstacles that could interfere with performance. Business leaders need to listen to the thoughts and concerns of their workforce to develop the strongest possible strategies for performance management.

Align Plan With Other HR Systems

Performance management is an important organizational system, but it is not the only one. Business leaders need to be certain that their performance management processes integrate well with related HR systems, such recruitment, staffing and training.

It might be worthwhile for business leaders to develop their performance management strategies with assistance from HR, who can provide information about the competencies they use in appraising employees. Consistency between performance management and other systems will establish business values internally and externally, so employees and job candidates understand what is expected of them from every angle.

No two performance management systems will look the same, but business leaders can take the same steps to develop systems that work perfectly for their company and culture. Understanding what makes performance management processes work, developing strong goals, tweaking the system as it ages and working with other key members of the organization are all essential in creating a performance management strategy that works.