The health of the whole company is positively impacted by performance strategy. That's good business.

In many organizations, performance management is synonymous with performance appraisal. It’s time to think about performance strategy.

Performance appraisal is an event that focuses primarily on two parties—the employee and the supervisor—and is structured to provide feedback regarding the employee’s performance over the course of the most recent rating period. The supervisor will report his or her perception of how the employee has performed, and the employee listens. If the latter is lucky, they will have an opportunity to share their own perceptions of their performance. The process repeats at the end of the next rating period. That’s it.

But there is a much better approach. The performance review is just part of the bigger performance picture. Appraisals are a valuable element, but they should be just one factor in a much broader, more comprehensive organizational strategy focused on performance management. In such a situation, the performance of employees, managers and teams are monitored on an ongoing basis, and insights are generated around performance trends which allow for frequent and targeted “course corrections.”

Moreover, performance data becomes most useful when it is framed within a set of standardized criteria that allows for easy comparisons within and between departments. In this more dynamic view of performance, four key groups need to be involved in order to realize the full value to the organization.

The Employees: With the organic and ongoing process of performance management, employees are continually presented with a clear picture of where they are coming from and where they are going. Managing performance is about driving trends in a positive direction. Dips are explored, behaviors are addressed quickly, and the restoration of positive trends is celebrated. This often leads employees to a more positive perception of their role in the organization, thereby increasing engagement. And there will be no unpleasant surprises when it comes to reviews, as employees will always know where they stand.

The Supervisors: Supervisors are charged with maximizing the performance of their staff, as well as cultivating and developing their skills. Effective performance management empowers supervisors to track this evolution for both individual employees and teams. Given that performance criteria are standardized, it makes it easy to compare scores between employees. Armed with this information, supervisors can intervene with the right feedback at the right time to keep their people on track. It also makes the review process easier, as performance data is kept current from day-to-day and week-to-week and is visible to both the supervisor and the employee.

Administrative Staff: Behind every effective performance management program is an effective performance management process. As with any organization-wide process that has significant compliance implications, setting it up and managing it can be a Herculean effort.

Having effective administration and reporting tools empowers the HR staff to easily ensure that the right activities happen at the right times and that there is clear, easy to manage accountability across the organization. Gaining performance insights is made exponentially easier when you can open and close appraisal events, track adoption and provide managers and executives with clear progress summaries and action items for their areas.

The Executives: Today more than ever, executives are held responsible for building the teams and structures required to achieve the corporate goals. This challenging goal becomes achievable when one can easily spot areas of exceptional talent, effective management or skill deficit and capitalize on these insights.

One of the key benefits of an effective performance management strategy is the development of a big-picture “talent inventory” for the decision-makers in the organization. All it takes to deliver this is the ability to aggregate performance data into a clear picture of the performance of a team, department, or the organization itself. Once the big picture is understood, the whole company benefits… which should translate well to the bottom line. Now that’s how to make the CEO happy!

So, to put it simply, performance reviews are not enough. A robust performance management strategy should provide each of the four key players with the information they need to make effective choices and take appropriate action. When such a strategy is implemented properly, the health of the whole company is positively impacted, and that’s just good business.

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