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The Impact of Performance Management on Organizational Culture

Performance management is one of the most important HR function, businesses and organizations strive to adopt to methods, ways and solutions that can enhance their productivity, operational efficiency and quality of work. The employee performance matters a lot for business growth, every business and organization wants to achieve a sustainable growth, for that the employee retention, satisfaction and high-performance is absolutely essential. High performing teams produce high-quality work, which inspire and attract customers and make them loyal to your brand. Earlier the performance management processes were carried out manually, which was very inefficient and eventually both employees and managers lost trust from manual practices. This lead to the creation of digital performance management systems and HR solutions.

The digital performance management systems are serving as a backbone for the modern enterprises. Businesses in Dubai, Sharjah, Abu Dhabi and all around the UAE have started adopting to digital performance management systems and HR solutions very early, now a days, such solutions have become so common, however, there are still businesses who are either stuck in old practices or haven’t moved to modern performance management systems. In this blog we will discuss how a modern performance management system can enhance organizational culture resulting in elevated employee performance and higher operational efficiency.

The Impact of Performance Management on Organizational Culture
The Impact of Performance Management on Organizational Culture

What is a Digital Performance Management System?

A digital performance management system is a software-based comprehensive framework and strategy which enable businesses to systematically monitor, measure and enhance organizational performance. The modern performance management system offers tools and mechanisms to efficiently execute performance management related tasks. It provides, real-time performance data coming from a multitude of systems and touch points, which is analyzed with in-built analytical tools and AI engine to provide performance data in interactive and intuitive dashboards. The HR team is responsible for conducting several performance management related tasks, which often are time-consuming and required a lot of efforts, this raise the cost of performance management and at the same time it also make the process more inefficient and inaccurate.

The digital performance management system on the other hand automatically collects data from various sources, minimize the human factor by significantly reducing manual work, bringing transparency and accuracy in the performance management process. It provides a comprehensive framework to setup goals, put monitoring mechanisms in place, provide automated reports and performance analytical data and help enhancing performance management function. Businesses can greatly enhance various performance management related processes such as performance appraisals, feedbacks and reviews, setting up goals and objectives, monitoring KPIs and progress, identifying hurdles and problems, enhancing employee development program, improving employee satisfaction and retention and much more.

What is a Digital Performance Management System?
What is a Digital Performance Management System?

How Performance Management System can Improve Organizational Culture?

The organizational culture is one of the most crucial factor which is often overlooked. The organizational culture have huge impact on employee behavior, attitude, and happiness and consequently the overall business success. A modern performance management system helps streamlining and improving various processes which have direct impact on organizational culture. A positive and productive organizational culture ensures employees are satisfied, valued, motivated, appreciated, engaged and recognized well. A performance management system provides high-tech tools and intuitive processes which majorly helps in the following core performance management processes:

  • Defining success, clear expectations, SMART goals and individual objectives
  • Communicating and relating individual objectives and goals with high-level organizational goals
  • Real-time monitoring and performance data collection with intuitive analytical tools
  • Continuous feedback and reviews, contextual performance and much more
  • Identifying problems, strengths and weaknesses and help making informed decisions
  • Designing effective and comprehensive employee development programs
  • Identifying high-performer, acknowledging their performance with effective reward programs

Apart from that, the performance management systems also help in various HR processes and with the ability to digitalize and automate the performance management process itself become very efficient, impactful and cost-effective.

How Performance Management System can Improve Organizational Culture?
How Performance Management System can Improve Organizational Culture?

What are the Key Benefits of Implementing a Modern Performance Management System?

Here are the key benefits of implementing a modern performance management system that positively impact the organizational culture:

  1. Driving Productivity: A performance management system can greatly increase productivity in any organizational culture by streamlining communication, increasing and encouraging collaborations, and high focus on the result-oriented progress. A highly engaged workplace lead to higher performance and it empowered employees to deliver their best efforts.
  2. Raising Employee Satisfaction: For any successful organization the importance of employee satisfaction is paramount. The performance management system enhance reward and recognitions processes encouraging employee to perform well by recognizing their achievements, providing them new opportunities, and fostering a culture of constructive feedbacks.
  3. Better Employee Retention: For any business or organization the employee retention is crucial, in order to retain employee the businesses must provide them a positive organizational culture. The performance management system boost communication, enhance collaboration, encourage efforts, develop employees’ skills and provide them more opportunities to grow.
  4. Align Employee Goals: The primary goal of any performance management system is to improve the overall performance of the business. For that it is extremely important that all the employees put their efforts in the right direction. The performance management system helps aligning individual employee goals with the high-level organizational goals and strategic objectives.
  5. Transparent Appraisal System: The transparency and accuracy is the core functionality of any performance management system. The appraisal process is a crucial aspect of performance management and it has profound impact on employee performance and satisfaction. A bias-free, effective and transparent appraisal system can greatly boost employee performance.
  6. Fair Rewards and Recognitions: Employee often complain of bias in traditional and manual performance management systems. The digital performance management system eliminates that and make reward and recognition processes fair and transparent. The employees are rewarded solely based on their performance criteria while all metrics are made available to them.

In the modern day business landscape the employees demand more frequent evaluation and continuous feedback from their managers. The Gen Z. is too impatience, they want instant gratification. This can be achieved only when you have an effective and efficient performance management system.

What are the Key Benefits of Implementing a Modern Performance Management System?
What are the Key Benefits of Implementing a Modern Performance Management System?

What are the Key Elements of a Modern Performance Management System?

A modern performance management system comes with several features which are very helpful in performance management process, administrative and management tasks as well as carrying out some regular HR tasks. Usually a performance management system is customized or tailor-made for any organization to align with their unique and exclusive needs. However, there are some elements that are inherent to any modern day digital performance management system:

  • Setting Goals: Setting up clear, realistic, measurable, and achievable goals for the employees gives them a sense of direction and purpose. When the employees know what is expected from them or what success looks like, they tend to perform better. The performance management system facilitate setting up SMART goals, while ensuring a perfect alignment between individual goals, and high-level organizational goals. This greatly improves overall performance.
  • Frequent Feedbacks: One of the biggest advantage of a performance management system is that it provides a comprehensive framework to encourage frequent feedbacks. Frequent and constructive feedback raise employees’ moral and encourage them to perform well. In most modern performance management system frequent and continuous feedbacks are common and can greatly enhance the impact of a performance management system on organizational culture.
  • Appraisal Process: The performance appraisal process is one of the most important and crucial process of a performance management system. It helps management evaluate employees, acquire a deeper insight to their strengths and weaknesses. A systematic and fair performance appraisal process ensures the evaluation is fair, transparent, and based on pre-set criteria. It also provides a system of constructive feedback, coaching and it aids decision making process.
  • Employee Development: The employee development programs are crucial to unlock the true potential of the workforce. A digital performance management system accurately identifies the strengths and weaknesses of the employees and provide them with the continuous coaching, opportunities to learn and grow which enables them to acquire new competencies and skills. This includes offering mentoring, training, resources and tools to enable them perform well.
  • Reward and Recognition: Higher level of motivation and engagement are essential to high performance, and for that a fair and well-designed reward and recognition program/process is absolute necessity. A performance management system provides a systematic approach to align rewards with performance while ensuring the performance is fully aligned with high-level organizational goals. Recognizing achievements and offering incentives elevates organizational culture and consequently the overall performance of the organization.

There is a strong correlation between employee performance and organizational culture. Happy and satisfied employees tend to be more loyal and have greater potential to grow and excel. A high-performing workforce requires a strong, positive and productive organizational culture which can only be achieved by effective performance management. A digital performance management system provides integrated solution, has ability to collect performance data in real-time and it offers multiple dashboards for monitoring. It also elevate several internal processes which results in better communication and higher collaboration. Employee goals can be aligned with high-level organizational goals and with help of real-time data monitoring tools the course correction is seamless which is essential for higher outcomes. These features and benefits made performance management system absolutely essential.

What are the Key Elements of a Modern Performance Management System?
What are the Key Elements of a Modern Performance Management System?

Conclusion

An effective digital performance management system have transformative impact on organizational culture. It is a combination of integrated digital tools, data collection and analytical tools, coupled with most modern performance management tactics and practices. The traditional performance management systems and annual appraisal reviews are very time consuming, require a lot of efforts, and are inaccurate which results in distrust and prompt businesses to shift to most modern practices and digital solutions. A modern performance management system on the other hand can greatly improve the efficiency and efficacy of the performance management process and help businesses greatly improve the organizational culture. A positive, strong and productive organizational culture foster high-performing teams. The digital aspects of the performance management system empower employees and increase engagements.

The business goals and individual goals should be fully aligned in order to produce higher outcomes. This has become very easy with the help of an effective digital performance management system. On top of that it elevate fairness and transparency resuming faith in the system and also help businesses to minimize employee turnover. All these features help enhancing organizational culture and bridge the gap between employees and managers fostering a more connected and collaborative work environment. In this blog we have discussed how an effective performance management system can positively impact organizational culture and boost overall performance of the organization. If you want to learn more about the subject or if you want our help to design and implement a bespoke and highly cost-effective performance management system for your business, 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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How to Develop Custom Performance Appraisal System in UAE?

The custom performance appraisal system in UAE are not very common. Usually businesses rely on cloud-based or commercial off-the-shelf solutions. The biggest problem with ready-made or stock performance appraisal system is that they are standardized for a particular industry, hence they are not as that flexible. However, every business is different and unique, and all businesses develop a completely unique culture and have different goals, needs and preferences for the performance management. Using a stock or commercial off-the-shelf solution can never fulfill such needs. Therefore businesses start looking into the possibilities to develop a custom performance appraisal system. For that businesses have two choices either they get it done by the internal software development team, which is very less obvious, and most of the time businesses doesn’t have IT teams who can deliver that kind of sophisticated application. The other choice is to acquire the services of a professional software development agency in Dubai or anywhere else in UAE who is experienced in HR solutions and performance management systems.

However, even if a business acquires a professional service provider or vendor, they must still have adequate understand of the performance appraisal system. In this blog we will discuss the important factors which will help businesses to get a high-performance and impactful performance appraisal system in UAE.

How to Develop Custom Performance Appraisal System in UAE?
How to Develop Custom Performance Appraisal System in UAE?

What is a Custom Employee Performance Appraisal System?

An employee performance system is a set of methods, techniques, tools and framework used to evaluate employee performance and progress against a pre-defined objective and it helps identifying the weaknesses, strengths and areas of improvement. The prime purpose of the employee appraisal system is to ensure that all the available resources are progressing in the right direction and their efforts are fully aligned with the high-level organizational goals and strategic objectives. The performance appraisal system is a foundation stone for growth and stability. Only by leveraging the full potential of the employees, a business can sustain and grow in the highly competitive and fast-paced markets like UAE. The employee performance appraisal system provides a comprehensive framework to collect employee performance data and feedback and transform this into actionable insight which helps management and HR department to take informed decisions and progress towards their high-level organizational goals and vision. When we say custom employee performance appraisal system the only difference is how the system is developed. A custom employee performance appraisal system is developed exclusively for a particular business as per their exclusive and very unique business needs. That is why it is called a custom employee performance appraisal system.

See Also: What are the Features of a Best Performance Management System?

What is a Custom Employee Performance Appraisal System?
What is a Custom Employee Performance Appraisal System?

What are the Benefits of Using a Custom Performance Appraisal System?

An effective performance appraisal system help businesses drive the productivity, it helps them minimize the problems caused by the lack of technical or behavioral competencies. The employee performance appraisal systems are not a tool to scrutinize the employees, but it is a comprehensive framework which lifts up the performance of the employee, increases employee engagements, and over the time strengthen their technical and behavioral competencies. A good employee performance appraisal system can have massive impact on a business’s growth and success. That is why it is important that the employee performance appraisal system you use is fully aligned with your business needs and resonate with your unique organizational culture and priorities. Here are the key benefits of using a custom performance appraisal system:

  • Elevating and Enhancing Communication: The communication is the backbone of our modern business ecosystems. All business functions should have a fraction-less and instant communication enabled in order to boost the operational efficiency. The lack of communication between employees and managers could devastate the performance and efficiency. It frustrate employees, fuel hopelessness and it kills productivity. The performance appraisal system help managers communicate the goals and objectives, and help employee understand the success criteria. Hence the employee are more motivated to progress in the right direction.
  • Appreciate High Performance and Improvements: One of the biggest concern of employees and managers is with the outdated appraisal practices is their efficacy and accuracy. A modern custom performance appraisal system help building trust and ensures the high performance is well appreciated while the areas of improvements are also noted accurately. Rightful incentive and appreciation not only boost employee morale but also encourage others to do well in the coming performance cycle. The reviews, feedbacks, and evaluation are done with a systematic framework which help employees and managers to understand what has to be improved and how, which also help raising the morale of low-performing employees.
  • Impactful Training and Development: Businesses who are actively offering training and development programs tend to perform well in UAE. A custom performance appraisal system does the heavy lifting and help the HR in many processes, which also enables them to design high-impact employee training and development programs. A well-organized performance data and intuitive reporting provide a better insight and help the HR to identify the training needs. The employee performance data can be analyzed by multiple angles and can be plugged-in into various other systems to ensure the maximum impact of training and development activities. The same can also be used to convince employee to participate in those programs and help businesses make the most impact of their efforts.
  • Guiding the Right Path: Studies have shown that the biggest reason of employee quitting form a jobs in UAE is the lack of clarity of their career path. A custom performance appraisal system provides you a wealth of performance data, when this data is coupled with employee data the HR can easily identify the suitable path for the employees and guide them with their long-term goals and career path. Such guidance is crucial, it help employees boosting their morale and confidence and it gives them a sense of importance and valued. When employees are guided to a right career path with a better scope and success in future, they become more loyal and satisfied. Happy and satisfied employees always tend to give their best.
  • Raise Employee Satisfaction: A modern custom performance appraisal system is a great tool to maximize the employee engagements. The employee appraisal system provides a systematic approach to engage employees at various levels and decision making processes. The digital aspect increase their trust, successful training and development programs raise their loyalty and satisfaction. With transparent evaluation practices, reward and recognition programs and frequent feedbacks and interactions the employees gain more confidence and become more satisfied with their job, knowing they are important and their concerns are addressed and their voice is heard. The employee engagements can greatly reduce the employee turnover too.
  • Help Under-Performers: Here in UAE business leaders and HR specialists are agreed that the under-performers are the employees who can seriously undermine the organization’s overall performance. A custom performance appraisal system helps HR to accurately identify the under-performers, closely monitor their performance and the impact of coaching and training and give them a fair chance to improve. The performance appraisal system is very much capable of identifying the reasons of poor performance which greatly help HR to address the real issues. It also help managers to provide right guidance, coaching and mentorship to encourage under-performers and to boost their morale.

See Also: Performance Management System: Best Practices

A good performance appraisal system not only align employees with the organization goals and objectives, but it also help developing and nurturing a highly productive organizational culture where the employees can improve and grow over the time.

What are the Benefits of Using a Custom Performance Appraisal System?
What are the Benefits of Using a Custom Performance Appraisal System?

How do I design a custom performance appraisal system?

Most of the time when businesses decide to adopt a custom performance management system they think it is a very sophisticated and time-consuming task. However, designing a custom performance appraisal system is not difficult at all. It is a very simple process, all you need is to consider following important aspects of performance appraisal and you can design a high-impact custom performance appraisal system:

  1. Understand Modern Performance Appraisal System: The modern performance management is way too different than the traditional/annual appraisals. More than 80% of the employee, business leaders and HR experts have shown distrust form the annual appraisals, as they majorly focused on the most recent events, and progress. However, the modern performance appraisal system facilitates more frequent and even continuous performance monitoring. Another drawback of traditional appraisals is that it is very time consuming. However, the modern performance appraisal systems leverage digital technologies and software based tools. Which ensures continuous monitoring, more contextual and comprehensive data, and highly accurate reports.
  2. Set Your Goals and Objectives: Whenever a business is acquiring a new system or implementing a solution they have clear goals and objectives, what they want to achieve with that system. Same is applicable here too, if you are designing a custom performance appraisal system you should set goals and objectives for that, it would be simply what you would want to achieve by implementing that system, such as getting better and deeper insight to employee performance, communicating the expectations, increase employee performance, driving efficiency and reducing redundant work, reducing the time, effort and cost of the appraisal process and so on. Setting up clear objectives for the system will help you maximizing the ROI as well.
  3. Define Benchmarks and Setting up Standards: It is important to do some research on industry standards and define benchmarks and set up your standards accordingly. It is very important to include the most effective elements and features in your custom performance appraisal system. In order to understand the impact of different strategies and features the market research is the key. Furthermore the case studies can help you understand different features of the performance appraisal system and accordingly you can vision your custom performance appraisal system. Studying market trends is equally important. That is why it is crucial to do some research and consult experts to define the scope of your system.
  4. Develop Metrics and Establish Success Measures: Since you already have a clear understanding of what you would want to accomplish with your custom performance appraisal system, it is absolutely essential to setup metrics and establish clear success measures. So, you can gauge your performance against your objectives. Furthermore establishing success measure will also help you to evaluate the efficacy and impact of your custom performance appraisal system. It is not as that complicated as it may sound, let us take an example of a goal which is ‘improving employee performance’ for that your custom performance appraisal system should be able to communicate what is expected from the employees, it should have tools to measure employee performance against pre-set goals and it should have features to ensure employee alignment with goals.
  5. Evaluate Your Current Appraisal Processes: It is important to scrutinize your existing performance management and appraisal processes and practices. This will help you identify the areas of improvements and missing tools or features which you can include in your new custom performance appraisal system. It is also important to collect user feedback, in this case the employees, supervisors and managers are your audience. You should conduct interviews with a sample from different audience/user pools and consider their recommendation as well. The next step is to analyze that data and revisit your success measures and ensure your success measures and goals are fully aligned with the benchmarks you are planning to achieve with your new custom performance appraisal system. We are still in the planning phase so any step can be revised and adjustments can be made if needed.
  6. Establish the Scope of the Project: Above all steps are mostly part of the planning. Forming a clear scope of the project is what you will hand over to the development team and get the system done accordingly. It is important to understand that the scope of the project is a high-level technical guideline or in fact a blueprint of your custom performance appraisal system. Make sure you add enough details and also expected outcomes. This will help the development team to build the features and functionalities in your custom performance appraisal system. At this stage you can also engage IT/Technical teams to make this charter more contextual, descriptive and technically understandable for the development team.

See Also: How to Design a Modern Performance Management System?

How do I design a custom performance appraisal system?
How do I design a custom performance appraisal system?

How to Implement a Custom Performance Appraisal System?

Once you have a completed the planning phase and prepare a detailed scope of the project with all the features you need. Now is the time to appoint a custom software development team to execute the project. Remember the employee appraisal system and performance management is not just a method or strategy, but it is actually a very powerful software application which lifts the heavy load and enable the HR to effectively implement their employee appraisal and performance management strategies. This requires a powerful software engine which can collect performance data, analyze it as per your needs, and produce intuitive reports to let the management understand the performance status and provide them administrative dashboard with required features to acquire insight and take informed decisions and then effectively implement their decisions and action plans to course correct and take measures to ensure the set-goals are achieved at the end of the performance cycle. The software development team will follow the scope of the project document, and build that software engine for you. You can hire in-house team to build custom appraisal system for your business or you can outsource it to a well-reputed and experienced vendor who can further help you refine your system and provide required training for the system to ensure maximum impact can be created with it.

See Also: Benefits of Implementing a Modern Performance Management System

How to Implement a Custom Performance Appraisal System?
How to Implement a Custom Performance Appraisal System?

Conclusion

Businesses who are operating in Dubai, Sharjah, Abu Dhabi or any other emirate of UAE are well aware of the fact that the employee retention is one of the biggest obstacle in growth. The overall UAE market is very competitive and it is relatively easier to switch the job. In such scenario retaining good talent is quite difficult. Furthermore the markets are very competitive and the businesses have to ensure their customers are having a satisfactory experience and excellent service which is nearly impossible with your employee performing with optimum level of productivity and efficiency. Therefore businesses tend to implement various different types of performance management and employee appraisal systems to ensure they achieve their high-level organizational goals. In order to achieve your organizational goals and strategic objectives, the employee must be aligned with your goals, satisfied with their job role, motivated, guided, trained and engaged. This all can be achieved only when you implement a systematic framework to measure and monitor your employee performance and offer them a highly transparent and fair appraisal system.

A business have two choices, either they can acquire a commercial off-the-shelf solution or they can develop a custom performance appraisal system. The bespoke solutions tend to deliver more comparing to standardized off-the-shelf solutions. In this blog we have discussed how a business can develop and highly-effective and most impactful custom performance appraisal system. If you want to learn more or if you need our help to develop a custom performance appraisal system for your business in UAE, 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.

See Also: Choosing a Performance Management System A Buyer’s Guide