Performance Management is broken down into 3 smaller parts, namely Performance Management, Reward Management and Consequence Management.
Performance management is a process of setting a set of targets for the employees. Employees will report in with a clean slate, hence it is very important for the employer to communicate its expectation on the employee as early as possible.
The usual implementation method is through Performance Management (PM) cycle. The cycle consists of 3 phases, namely Planning, Mid-term Review and Appraisal.
Objectives and Key Results (OKR)
There is one organizational system called Objectives and Key Results (OKR) that I find useful to be used for all of us. Originated from Intel, it is also now being used by Google.
First, we need to set up an Objective. The objective must be ambitious and feels comfortable. I guess it is somewhere between too hard and too easy.
Then, we need to have a number of “Key Results”, which needs to be achievable, quantifiable and lead to objective grading.
Scoring is easy. Google uses 0 to 1 scoring. Usual good scores re usually 0.6 or 0.7, indicating that there’s room for improvement. If you get a perfect 1.0, then definitely the goal is too easy to be achieved.
I find this to be a useful tool for us to keep our career progress quantifiable and our performance will be easier to look at from a supervisor or manager’s perspective.
Read more here.
Reward management is the concept of rewarding the employees based on their performance. Reward Management comes after performance management, in which the expectation of the employer is outlined and communicated to the employee.
Reward management has several benefits. Among them include better engagement, lower recruitment costs and reduced possibility of employees making mistakes.
Reward management is important to send a message to the employees that their good effort is being noticed and they will be rewarded for extra mile steps that they have taken for the employer.
Consequence management gives us some sense of accountability on our performance. While Reward Management serves as a motivation tool as well as a platform to reward the best performing employees, consequence management acts as a platform to remind the employees about how they can improve and the need for them to align their performance to the employer’s specifications.