The performance management process have become very complex and sophisticated over the time. Often the HR and the employees both got confused with the performance management processes. Businesses use a lot of methods and tools to monitor and improve the performance. The performance management is one of the most crucial business function, it help businesses understand their strengths and weaknesses. Businesses can highlight flaws and weak points which help them grow. A successful performance management can provide a greater competitive advantage. However, we have noticed that even some of the very large companies and businesses in Dubai and all around the UAE are not effectively utilizing the performance management. Hence, they are unable to work at the full potential which slows their growth and it also have financial repercussions too.
It is not that the HR or the management doesn’t have the knowledge of the performance management, but most of the time they are not doing it right, sometimes just few minor mistakes could have larger and long term impact on the performance of the business.Here in Dubai and all around the UAE businesses usually prefer a digital performance management system/software which is far better than the traditional manual performance management and appraisal processes. There are two major reasons of moving away from the traditional methods and adopting to technology based modern performance management practices. First is that the manual performance management is a very time and effort consuming process, the second is that the traditional annual reviews are losing their impact, as the more rapid changes in the markets, trends, customer demands and competition demands a more frequent and continuous performance management.
However, adopting to modern solutions is also not an easy task and that is the reason why most of the businesses made mistakes in implementing a modernized performance management system. In this blog we will discuss what most common challenges a business face when they implement a modern technology based performance management system and software solutions.
What is a Performance Management System?
The performance management system is basically a very powerful AI based software application that help businesses implement the modern performance management strategies to make the individual employees and the entire business more effective in achieving the high-level company goals and objectives. The performance management system help providing a complete framework which facilitates the performance management activities and processes. The performance management is a process that enables gradual and consistent improvement and make businesses more efficiency and capable. It help management lift up employees, groom them into leaders, train them to acquire better knowledge and skills, and help improving the entire workforce. This gradual improvement lead businesses to achieve their long-term and short-term high-level organizational goals, objectives and vision.
Challenges in Implementing Performance Management System: Customized Software
One of the biggest challenge in implementing a performance management framework is the selection of the software. Usually there are two types of software implementation, one is commercial off-the-shelf software also known as COTS, and the second is customized software development. The customized software development is the best approach for the performance management software implementation. The COTS are designed for masses, hence are general purpose, and usually follow the industry standards. Whereas the customized performance management software is a tailor-made solution that is exclusively designed for the business keeping in mind their needs. The customized performance management system not only fulfill all business needs but it have very low impact on the organization. It integrates seamlessly within the existing environment.
The performance management system tend to integrate with existing internal systems, tools, databases and central information center. This allow the performance management system to collect data automatically from the relevant sources. The automation reduce the human effort and make the performance management process simpler and convenient. Furthermore the customization also allow businesses to make the user interfaces more intuitive and customized which make system more user-friendly. Furthermore for different businesses the performance management process is different, their needs and priorities are different, hence the customization allow them to focus more on their important things and maximize the usability of the performance management system. The customized performance management system is also cost-effective and tend to have longer lifecycle than the COTS.
Challenges in Implementing Performance Management System: Goals & Objectives
After deploying a customized performance management system or even a COTS app, the first and most important step in performance management is setting up the goals and objectives. The most common problems in setting up goals and objectives is the over-ambitious goals and unrealistic or extremely difficult to achieve objectives. Another common problem with the smaller and mid-size organizations is having too many goals which unfortunately distract the employees from high value goals. Too many or too difficult goals will disconnect the employees form the goals and most of the times result in stress, lack of interest, hopelessness and frustration among the employees. The best approach is to have fewer and realistic goals. The individual goals should be aligned with the team’s goals, department’s goals and the high-level organizational goals and the high-level company goals are always aligned with the company vision, mission and values which also known as VMVs.
The performance management system provides a complete framework for the goals management. It enables businesses to implement SMART framework to set goals and KPIs. The SMART stands for:
- Specific: Should be simple, logical and of high value
- Measurable: Should be quantifiable, easy-to-understand and motivational
- Achievable: Should be attainable given the availability of the resources and circumstances
- Relevant: The goal should be relevant to the employee, his/her job role, capabilities and skills
- Time bound: So the employee knows the timeframe to accomplish a goal
The goals and objectives both can be set using the SMART framework. The employee will understand what they have to accomplish, this will clear their mind and let them focus on the most vital goals and increase the value of their contribution. The fundamental of performance tracking is to define a goal in a way that it can be translated to a measurable and quantifiable matric. The goals and objectives should be realistic and achievable in the given environment and circumstances. The employees’ skills, experience and knowledge should align with the goals and objectives. The employee should know when their progress will be evaluated so the goals should be time-bound.
Challenges in Implementing Performance Management System: Evaluation & Feedback
The biggest problem with the traditional performance management systems is that the employee evaluation is based on manual feedback. Traditionally the employee evaluation and feedback is done once in a year which reduce the quality of the outcome. Most of the time the reviewer tend to consider only the most recent performances and some prominent events within the year. It is because we as a human can’t remember everything, if a managers is reviewing a team then it is nearly impossible to remember everyone’s full year’s performance by the end of the year. This results in lack of trust on the system and also on the managers. Furthermore the human emotions are also a huge factor, which results in favoritism and bias. Which further crumble the trust of the employees on the system. That are some of the main reasons the employees and most of the managers also not trust the traditional methods.
However the employee performance management system provides a complete framework to collect feedback and schedule one to one meetings between the employees and the managers. This also help increasing employee engagement and fill the communication gap. Furthermore the performance management system provides dedicated dashboards which help collecting more untraditional performance data and also improve the communication. The well-organized performance management process also eliminates several other problems. It also allow managers to easily conduct the reviews, which makes it possible to evaluate employee via this performance management system. Furthermore the performance management system also provide real-time performance data, which help managers to get instant updates and take actions if needed without any delay. These features help businesses significantly improve the effectiveness of the performance management system.
Challenges in Implementing Performance Management System: Rewards & Development
Reward and employees’ personal development is one of the most important part of the performance management system. These two are the major contributor of the employee turnover. Employees who don’t find reasonable personal development program and adequate acknowledgment they tend to lose interest in their job and are most likely to leave. It is very frustrating for the employees to not to achieve something and keep working on. No or very less appreciation will detach employees form the business, which have very bad effects on the employee performance. No employee development plan will give them an impression of getting stuck at a job which doesn’t add value to their career or personal skills and knowledge. The traditional performance management methods lacks transparency and accuracy, which reduce the impact of such efforts made by the management and demoralize employees.
A digital performance management system can effectively eliminate the poor accuracy and increase employees trust. However, it is not easier to achieve, that is why the performance management system provides a full framework to appreciate the employees in form of rewards, acknowledgments, bonuses, incentives and other perks. Due to autonomy and a better employee review and evaluation process, the employee start trusting it and get more engaged and attached with the business. Employee happiness and engagement can boost the performance. The performance data also help management in planning different training and employee development programs. The semi-autonomous mechanisms for reward and compensations also help increasing employee trust over the management and the system. That is why it is important to setup employee development and reward programs in the system.
Challenges in Implementing Performance Management System: System Integration
Most of the time a business implements a modern performance management system and thinks that is it and it will somehow dramatically boost their performance and progress. However, that is not the case at all. A performance management system is a software tool, from the technical prospective it require a server environment to host its all AI based algorithms and source code. That is it. However, from the users’ point of view, the general trend among the world is that people tend to oppose any new major change in their routines. That mindset could cause a lot of problems. That is why it is crucial to implement a modern performance management system with a comprehensive user training program. Furthermore the performance management system should be fully integrated within your performance management practices and the workflows as well.
The performance management system offer a ton of customization facilities. Which can be very helpful, it is ideal that the business follow another popular tool as a reference for the UI (user interface) and UX (user experience). When the performance dashboard looks familiar it is much easier to train the employees and the managers to use it. The managers also require a lot of training before they become able to utilize the performance management system at its full potential. The performance management system must be integrated with the HR system/department. Only then the HR can ensure the business have a decent talent pool all the time. The technology itself will not going to improve the performance, in fact it is how you utilize the technology can make a bigger difference. That is why it is important that the business integrate the system within existing IT environment as well as it trains its managers and employees to be able to use it. This will increase the effectiveness of the performance management system and will help you reach your high-level organization goals and objectives.
Conclusion
A modern day performance management system is basically a very powerful software tool which help business in improving their performance management process and enable them to utilize it at its full potential. There is no doubt that the performance management system have become a necessity after the traditional performance management and review methods have failed the businesses and the employees too. The business can have a customized performance management system which could eliminate several implementation challenges. The integration and adequate employee training could also be very helpful in eliminating the issues normally associated with the implementation of a digital performance management system/software. RSI Concepts is a leading performance management system provider in Dubai, UAE. We are expert in offering very cost-effective tailor-made and customized performance management systems/software. If you want to learn more about the subject or if you want us to help you implementing your next performance management system. Please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.
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