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Customizing Performance Management Systems for Diverse Workforces

In today’s dynamic market landscape where the competition is rising and the customer demands are rapidly changing, businesses need to leverage the full potential of whatever resources thay have in hand to gain competitive advantage and to achieve a steady growth. The UAE is a very diverse society, businesses operating in Dubai, Sharjah, Abu Dhabi and other regions of the country knows that very well.

Hence hiring a diverse team is common, however, business leaders and HR often doesn’t realize that recruiting people from multiple cultural and technical background is not enough, in fact in order to leverage the full potential and all skills of their multi-cultural and diverse workforce, businesses must have to integrate this to the very core of their performance management process.

When the performance management process will be optimized to manage diverse workforces, everyone will feel valued. Employees who feel valued tend to perform well and it this also help reducing the employee turnover. Performance management is a systematic approach involving processes, strategies, and analysis which ensures every employee perform well, their progress is measured towards their goals and their goals are weigh as per their contribution in the high-level organizational goals and strategic objectives.

For that businesses use a digital performance management system which provides a comprehensive framework to streamline performance management processes. In this blog we will discuss how a customized performance management system can transform your performance management process for your diverse workforce.

Customizing Performance Management Systems for Diverse Workforces
Customizing Performance Management Systems for Diverse Workforces

Understanding the Digital Performance Management System

Before we discuss the importance of customizing a performance management system for diverse workforces, it is important to understand what is a modern digital performance management system? A modern day’s digital performance management system is a digital tool which provides a complete framework to ensure that employee’s performance is fully aligned with the organizational goals.

It also help unlocking the true potential of the workforce, and help forming cross-functional and high-performing teams which lead to operational excellence. The performance management system majorly includes planning, goals setting, performance monitoring, evaluations, development and acknowledgement process.

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

Here are the key components of a digital performance management system:

  1. Goal Setting: Setting up clear and realistic goals for employees, teams and different business functions which are aligned with the high-level organizational goals and strategic objectives. Modern performance management systems often utilize SMART Goals framework.
  2. Continuous Feedback: Cultivating a culture of continuous feedback where employees are evaluated periodically, given coaching, and their goals are aligned with organizational goals. This help identifying areas of improvement, setting up plans and acknowledging the achievements.
  3. Periodic Evaluation: Annual reviews are not as that effective anymore. Modern performance management systems include periodic evaluation and assessment to measure employee progress towards pre-set goals and established performance benchmarks.
  4. Aligning with Organizational Goals: One of the most crucial function of a digital performance management system is that it helps aligning the individual and teams’ goals with the high-level strategic goals and objectives of the organization to boost productivity.
  5. Employee Engagements: A digital performance management system provides a systematic approach to integrate employees in important performance management tasks, fostering a culture of collaboration, accountability and engagement.
  6. Employee Development: Performance management system helps HR and manager to create and provide right opportunities to the employees to enhance their skills and to elevate their potential through regular training, coaching, and mentoring and technical development programs.
  7. Recognition and Rewards: Recognizing high-performer and acknowledging their contribution by offering incentives, bonuses, promotions or other form of benefits. This will help raising their loyalty and it will also boost the morale of the entire team.
  8. Performance Improvement: There should be a framework to improve the performance of those employees who failed to achieve their goals. The digital performance management system offers tools to setup and modify goals, take actions, set timelines for the improvements.
  9. Statistical and Analytical Data Tools: The managers can utilize in-built data capturing and analytical tools to understand performance patterns, trends and identify the areas of improvement to make informed decisions.
  10. Continuous Enhancement: A digital performance management system provides integrated tools which help businesses continuously evaluate their performance management strategy and make enhancements to ensure higher impact and efficiency.

See Also: The Impact of Performance Management on Organizational Culture

A digital performance management system is a very powerful and effective strategic tool that can help businesses and organizations to continuously improve their performance, productivity and profitability by fostering a highly engaging organizational culture where employees feel connected, empowered and are provided with suitable opportunities to enhance their technical and behavioral competencies.

Understanding the Digital Performance Management System
Understanding the Digital Performance Management System

How Businesses can customize the Performance Management System for Diverse Workforce?

Businesses in Dubai, Sharjah, Abu Dhabi and all around the UAE are facing bigger challenges with managing diverse workforce. When it comes to workforce diversity, there are several factors that should be considered, for example, here in UAE a large population of expats is living, the government itself is encouraging to diversify workforce to have an inclusive culture. People coming from different backgrounds, countries, cultures and ethnicities, furthermore we also have generational difference too.

The new workforce who belongs to Gen Z. is more tech savvy, have different customs and expectations, the people from Millennial and Generation X have different customs and expectations. When an organization is hiring they need different level to experience, qualifications, and in today’s modern world, the technology also plays a crucial role, hence an organization has to diversify their workforce, which is a great and very positive thing, it helps building strong and productive culture.

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

Why Customizing Performance Management System is Important?

A one-size-fits-all approach to performance management overlooked the unique strengths, challenges, and contribution made by an individual in a diverse workforce. Customizing performance management system will help businesses enhance their capabilities to collect and analyze contextual performance data with superior efficiency and efficacy. A performance management system that doesn’t include cultural factors tend to be ineffective or in some cases it could hinder and harm the performance of the organization.

Cultural and behavioral understanding help managers understand how their certain actions and feedback could be perceived by the employees. This will influence the way how employee interpret goals and objectives, and how they would interact in a team. Understanding all these factors is extremely important in order to ensure the employees remain fully aligned with the high-level strategic objectives while participating effectively in their team goals and also perform well for their individual goals.

See Also: 5 Performance Management Problems and How to Solve Them

Why Customizing Performance Management System is Important?
Why Customizing Performance Management System is Important?

Before Customization Identifying Key Performance Metrics is Crucial

Before customizing the performance management system it is extremely important to identify the key performance metrics. These key performance metrics should be aligned with the high-level organizational goals and objectives to ensure the entire workforce will progress towards achieving them. This will also help you defining the success incorporating the performance criteria for productivity, performance, quality of work, customer satisfaction, leadership, coaching and training, and professional development.

When clear and easy-to-understand criteria are established it is relatively easier to communicate goals, expectations and feedback. With a diverse workforce the biggest challenge is always with communication and feedback, when clear KPIs are set, the goals and objectives are easier to communicate and understand. Furthermore when the employees are given tools for self-evaluation they can easily understand feedback and are able to evaluate and assess their performance against their goals.

See Also: Performance Management System: Best Practices

Before Customization Identifying Key Performance Metrics is Crucial

Before Customization Identifying Key Performance Metrics is Crucial

Establishing Effective Communication Channels

The customization of a performance management system begins with establishing highly effective communication channels. Communication is a key to a successful implementation of a performance management system. The communication should be both understandable and quick. The organizations must build clear and easy-to-understand resources, guidelines and instructions which will help all groups of employee to understand the performance management system and evaluation processes along with the expectations of the performance management process. This will help connecting them and integrating them within the process.

Providing open, transparent and easy communication channels can greatly enhance communication and employee engagements. Every HR and business leader knows the importance of employee engagement, and the communication is a key to enhance engagements. This will help employee to take feedback, share their concerns openly, and it will help managers building trust which boost the impact of the performance management system in a diverse workforce.

See Also: How Performance Management Impact on Organization’s Culture?

Establishing Effective Communication Channels
Establishing Effective Communication Channels

Providing Continuous Feedback and Coaching to Build Trust

The diverse workforce doesn’t mean management difficulties, but it means there could be many complementary and unexplored sets of skills and strengths in every employee of the workforce. The HR and business leader have to explore those skills to leverage them to boost their employee’s potential. A digital performance management system typically offers continuous feedback and review framework which is essential for understanding the hidden strengths and also the areas of improvements.

This will help managers unlocking the true potential of the employees while discouraging stereotyping and any type of bias. A perfectly designed performance management system provides transparency and fairness which help gaining employee’s trust. When the differentiation of class, ethnicity, cultural background, and gender is neutralized, the employees feel more equal, important and valued. This raise their loyalty and encourage them to perform better.

See Also: Employee Performance Management Process with PMS

Providing Continuous Feedback and Coaching to Build Trust
Providing Continuous Feedback and Coaching to Build Trust

Culturally Sensitive Feedback and Communication Tone

Throughout the performance management processes there could be various interactions and reviews along with constant communication and feedback between the managers and the employees. It is extremely important to drive methods and way to include cultural sensitivity in all communications. A certain word or wording could be acceptable by one culture and could be disrespectful or considered blunt by another. Hence all feedbacks and communications are revamped to make them more culturally sensitive.

This also doesn’t mean that you should dilute your message, but it means conveying the right message in right tone which is both understandable and acceptable by the recipient. Businesses must have to train their HR and managers to enhance their cross-cultural competencies to ensure higher employee satisfactions. For example, in some cultures directness is appreciated and in some it is considered somewhat rudeness, hence a well-trained manager could ensure all employees are happy and satisfied while the message is conveyed effectively.

See Also: What is Continuous Performance Management? Complete Guide!

Culturally Sensitive Feedback and Communication Tone
Culturally Sensitive Feedback and Communication Tone

Customized Performance Reviews and Contextual Data

Most of the performance management systems have a standard employee feedback reviews mechanisms, totally disregarding any aspect of cultural background, individual challenges, and contextual data. Flexibility is a key when you are customizing performance management system for a diverse workforce. A digital performance management system is exceptional at offering such flexibilities and customizations. It is also important to include employee feedback and consider it too.

Regular and continuous feedback is a great tool to establish a strong relationship with diverse workforce, this will give your employees a chance to share their opinion, concerns and feedback. Regular interactions also help building a productive and positive environment which boost morale and encourage employees to seek solutions of their challenges. Because with diverse workforce, every employee also comes with their set of roadblocks and challenges. A flexible performance management system can help dealing with all these aspects of performance management.

See Also: Why Custom Performance Management System is more Effective?

Customized Performance Reviews and Contextual Data
Customized Performance Reviews and Contextual Data

Conclusion

UAE is a country where diversity is celebrated on an unparalleled scale to any other nation, the large population of the country is based on expats coming from all around the world. In such a dynamic marketplace where any business could have employees coming from a lot many different ethnic and cultural background, the customization of the performance management system is not something that is trendy, but it is something that is an absolute necessity. A tailor-made performance management system designed to account for versatile backgrounds, cultures, religions, ethnicities and age groups could be a game changer for a business.

Businesses can unlock the true potential of their employees by embracing their uniqueness, exploring their unique sets of strengths and dealing with their exclusive problems and challenges. A performance management system customized for a diverse workforce ensures every employee feel empowered, valued and engaged within the process which led to higher performance and better communication between the managers and the employees.

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

In a multi-cultural UAE landscape businesses embrace diversity, it help fostering unique skills and a competent workforce. HR and business leaders always struggle with managing performance that is because of the lack of understanding and focus on diversity and managing a diverse workforce. A digital performance management system customized for your tailored business needs can greatly enhance productivity and operational efficiency which is a key to higher profitability and long term success.

In this blog we have discussed various crucial aspects of customizing performance management system for diverse workforces, if you want to learn more about the subject or if you want our help to implement a culturally sensitive digital performance management system for your diverse workforce, 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: 5 Challenges in implementing Performance Management System

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The Role of Performance Management in Employee Engagement

In a modern competitive market landscape it is crucial that a business fully leverage the true potential of its workforce. The HR is responsible for ensuring every employee is working at its full potential while being happy and satisfied with their work. The employee engagement is a crucial function because it can impact each and every aspect of the business such as operational efficiency, technical capabilities, product and service quality, customer experience, employee satisfaction, profitability, etc. A performance management system provides a comprehensive framework, which help businesses in performance management process and it can greatly increase employee engagements. The performance management systems are designed to align individual employee performance with the high-level organizational goals and strategic objectives.

The performance management system seamlessly integrates various processes such as performance evaluation, feedbacks, reviews, appraisals, goal setting, etc. The performance management system is a modern software based solution which offers various tools and features which aid in performance management tasks. The performance management system is equipped with advance data collection tools, analytical reporting tools, and various other features which can help in performance management activities. In this blog we will discuss the role of performance management in employee engagement.

The Role of Performance Management in Employee Engagement
The Role of Performance Management in Employee Engagement

What is Employee Engagements?

Employee engagement is not just a single measurable substance, it is an entire spectrum of emotions and feelings an employee could have towards their organization, individual job role, daily work, co-workers, or team. The employee engagement is absolutely essential for the success, here is why:

  • Passion: Enthusiastic and passionate employees tend to work harder, as their work is very important for them and these types of employees are always read to meet new challenges.
  • Dedication: The engaged employees are more dedicated towards their work and goals, they believe in organizational goals and understand the value of their contribution to it.
  • Higher Purpose: Engaged employees believe in higher purpose, they feel their job role and work has a higher purpose which contributes to something higher-than themselves.
  • Growth: The engaged employees tend to be more eager towards growth and development, they tend to outperform the poorly engaged employees and tend to be more productive and skillful.
  • Recognition: The recognition and acknowledgement are the key factors, when employees feel valued they become more energetic, enthusiastic and dedicated towards their work.

See Also: Performance Management System: Best Practices

The business leaders and HR utilizes various methods and techniques to enhance employee performances. The performance management is one of the most widely used methods to increase employee engagement, productivity and efficiency. However, the traditional performance management methods are losing their impact, now a days, a modern software based performance management system is taking over. The modern performance management system provides a comprehensive framework coupled with modern performance management methods and practices. Businesses all around the UAE are adopting to modern performance management systems for higher employee engagements.

What is Employee Engagements?
What is Employee Engagements?

How Performance Management System Enhance Employee Engagements?

A modern day digital performance management system is a structured solution offering a comprehensive framework to implement modern and advanced performance management methods and strategies. The performance management system offers advanced monitoring and analytical tools, helping analyzing various aspects of individual and team performance. Furthermore the performance management system helps implementing policies to increase employee engagements and overall employee satisfaction.

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

A well-implemented performance management system can greatly increase employee engagements:

  • Goal Setting: The performance management system streamline goal setting process with in-built features for objective key results (OKRs), SMART goals, and customized KPIs. The performance management system also help communicating goals to individual employees.
  • Alignment: When the employee goals are clear and communicated effectively, they knows what is expected from them, this also help them understanding how their efforts align with the high-level strategic goals and objectives.
  • Advanced Feedback: The performance management system provides a systematic and structured approach to streamline communication and feedback, encouraging continuous feedback and more frequent interaction help boosting employee engagements.
  • Employee Development: The performance management system not only monitor employee performance but it also help identifying strengths and weaknesses of the employees, highlighting the development opportunities and boosting employee competencies.
  • Reward and Recognitions: Appraisals, rewards and acknowledgements are essential for boosting employee morale and when the employees are admired, valued and have a sense of importance they tend to be more engaged and perform well.
How Performance Management System Enhance Employee Engagements?
How Performance Management System Enhance Employee Engagements?

See Also: The Impact of Performance Management on Organizational Culture

Furthermore the performance management system offers a variety of features and tools which can be very helpful for the management to keep employees more engaged and productive. Businesses can also customize these tools and digital features of the system to enhance its impact and adoptability. Here are a few more features that can be integrated in a performance management system to boost employee engagements and satisfaction:

  • Regular Feedback: A performance management system can help implementing a more frequent, regular, and continuous and even real-time feedbacks. The feedback is crucial in engaging the employees, it also keeps them motivated and help management course correct.
  • Customized Software: The modern performance management system relies on a software application, the performance management system software should be customized as per unique business needs to amplify its impact and to boost employee engagements.
  • Collaborative Culture: The performance management system can provide essential tools and features to enhance collaboration, communication and peer-to-peer feedbacks. Streamlined communication and peer recognitions help engaging and employees.
  • Mentorship Program: The mentorship program can greatly increase employee engagements. Managers and senior employees can be appointed as mentors to guide and coach the new or inexperienced employees and help boosting collaborations.
  • Training Program: When businesses invest in employees they tend to become more motivated and perform well. Personalized training programs, workshops, and learning opportunities can help boosting employee morale and increase their engagements.

With the advanced features of a performance management system businesses can conveniently foster a culture of highly engaged employees. Engaged employees tend to be more active, innovative, creative and confident. Employee engagements are crucial for higher performance and high-performing employees are crucial for long-term sustainable success.

See Also: 5 Performance Management Problems and How to Solve Them

The Performance Management System Offers a Variety Of Features and Tools
The Performance Management System Offers a Variety Of Features and Tools

Conclusion

Employee engagement is a powerful catalyst to boosting the entire organization’s performance, productivity and profitability. A modern performance management system is not just an appraisal tool used to evaluate the employees, but it is a highly structured and systematic approach to elevate the entire organizational culture. A digital performance management system comes with a customizable software application that can greatly enhance the impact of performance management.

The performance management system empowers employees, encourage communications, and provides a structured approach for regular and continuous feedback fostering a highly collaborative and connected organizational culture boosting employee engagements. In this blog we have discussed the role of performance management in employee engagement. If you want to learn more about the subject or if you want to our help to design and implement a bespoke performance management system for your organization, 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: Performance Management System Trends in 2023

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

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Linking Performance Management to Business Outcomes

A high-performing workforce is not a desirable asset but it is an absolutely essential in today’s highly dynamic and competitive market landscape. Businesses need highest possible operational efficiency and performance in order to effectively achieve their strategic goals and long-term objectives. High-performing workforce is the strongest catapult that can help businesses and organizations to achieve long-term and sustainable success. Businesses invest huge sums of money and efforts in implementing top-notch technologies, innovative solutions and information infrastructure, however, all these efforts will only work if you have a capable and productive workforce.

A performance management system is a digital solution which helps businesses enhance collaboration and communication between all business functions, which is vital for success. That is not all, in order to ensure success and progress, a business must also align its performance management processes with its strategy and business outcomes. This is what can make a huge difference. Businesses in Dubai, Sharjah, Abu Dhabi and all around the UAE do have their performance management systems, however, most often businesses and organizations doesn’t emphasize much and consider it as a “nice to do” kind of activity.

However, things are changing rapidly, with the rising competition and skyrocketed customer demands, businesses are now compelled to seriously consider their performance management practices. In this blog we will discuss how a digital performance management system can help businesses linking performance management to business outcomes and objectives which can greatly enhance efficiency, performance and profitability.

Linking Performance Management to Business Outcomes
Linking Performance Management to Business Outcomes

Performance Management System Helps Aligning Performance Management to Business Outcomes

By implementing a modern performance management system businesses and organizations can effectively link performance management processes and strategy with the business outcomes which will help them effectively monitor, measure, and improve both individual employee performance and the team performance, which resultantly help driving the growth and success. In today’s dynamic and fast-paced business landscape the performance management is an ongoing process. It continuously keep improving the productivity and operational efficiency which lead to a long-term sustainable success.

A performance management system helps setting up SMART goals, key performance indicators (KPIs) and a comprehensive tracking framework which effectively aligns high-level organizational goals and strategic objectives with individual goals. Here are some key advantages of implementing a modern performance management system which help businesses and organizations to link performance management with their crucial business outcomes – to enhance performance and productivity of the entire organization:

Align Performance with Strategic Objectives

The primary and most crucial part of a performance management system is to aligning the individual and team goals with the broader and high-level organizational goals. One of the biggest obstacle in this process is the communication and the performance management system offers tools and mechanisms to greatly boost the communication and increase employee engagement which help businesses effectively aligning individual employee goals with the high-level organizational goals. Another great feature of a modern performance management system is that it cascades high-level organizational goals down to individual.

Furthermore the managers can reinforce this connection by conducting regular goal-setting sessions, performance review, and regular feedback sessions. The performance management system provides a systematic approach to manage, track and record those interactions which driving transparency as well and help gaining employee’s trust. All these features help employees understand their goals and objectives and their contribution in shared goals and strategic objectives.

Align Performance with Strategic Objectives
Align Performance with Strategic Objectives

Set Clear Expectations and Define Success

The effectiveness of any performance management system depends on its ability to provide effective mechanisms, tools and system to establishing clear expectations and defining the success to the individual employees. Setting up clear expectations for the individual employees can greatly raise their morale, it tells them what business is expecting from them and give them a better understanding of what success will look like. Hence the employees have a very clear understanding of their goal and contribution.

All modern performance management system support SMART framework for goal setting, here the SMART means Specific, Measurable, Achievable, Relevant and time-bound. Businesses and organizations can provide employees a complete roadmap to success by clearly defining their job roles, responsibilities, expectations, goals and success. This clarity driven by the modern digital performance management system not only helps employee to understand their goals and business’s expectations from them, but it also help managers in appraisal reviews and performance feedbacks, elevating and enhancing the entire performance management system.

Set Clear Expectations and Define Success
Set Clear Expectations and Define Success

Streamline Regular Feedback and Coaching

Regular feedback and coaching are imperative for fostering growth and a productive organizational culture. The regular feedback is crucial for boosting performance, it helps understanding the areas of improvement and which is crucial for course-correction. Furthermore regular coaching and guidance boost employee’s morale and results in higher productivity. When the employees and managers communicate and interact regularly, the employee engagement increased, which is crucial for a high-performance workforce.

The regular feedbacks not only help identifying the areas of improvements but it also help understanding the challenges and obstacles employees are facing which could be rectified to increase productivity and efficiency. A modern performance management system provides structured mechanisms and tools to improve the feedback and coaching processes. It helps documenting and communicating the feedback and recording each and every interaction. Furthermore the performance management system also incorporate the coaching, training and development opportunities which can be greatly enhance employee performance in the long-term.

Streamline Regular Feedback and Coaching
Streamline Regular Feedback and Coaching

Monitoring Performance and Progress

A modern performance management system offers advanced monitoring tools including AI tools, smart algorithms, integrated data collection tools, intuitive monitoring dashboards and customized reporting tools. The performance monitoring includes a systematic framework of tracking and evaluating the individual employee, teams, departments, and entire organization’s performance and progress towards preset goals, objectives, benchmarks, KPIs (key performance indications) and industry standards. A real-time data collection and monitoring mechanisms help management keep a close eye on ongoing progress and make course correction or take action in time to maximize the efficiency and productivity.

Through regular and continuous monitoring and evaluations businesses and organizations can effectively track the progress towards the set goals and objectives. This gives management an opportunity and capability to intervene quickly to minimize and rectify the performance issues and help them achieve their performance goals and strategic objectives. Furthermore it also help businesses and organizations to uncover the underlying factors which are impacting the performance and it also help them in taking preemptive measures to keep progress on track.

Monitoring Performance and Progress
Monitoring Performance and Progress

Rewards and Recognitions Program

The recognition and reward for the high-achiever could be the most effective and impactful catalyst in driving the performance, employee engagements, motivation and productivity. The rewards and recognitions are not just to praise the high-performer, but it is a system to enforcing the desired behavior and outcomes. A systematic approach towards the reward and recognition program help businesses and organizations to foster a highly productive culture of accountability, transparency, and appreciation for the hard work.

A modern performance management system provides tools and mechanisms to make reward and recognition programs more justified, transparent and impactful. A good reward and recognition program help businesses to develop their workforce as per their emerging needs, and it help them compete and thrive in the market. Appreciation of the hard work motivates employees, encourage them to perform well and inspire low-performer to make improvements. An excellent reward and recognition program is essential for performance management, it also help attracting and retaining talent.

Rewards and Recognitions Program
Rewards and Recognitions Program

Identifying Performance Gaps and Employee Development Needs

Most of the business leaders and HR doesn’t realize that the performance management is not only about evaluation the past performances, but it is a full package that also includes defining the future trajectory of the individual employees as well as the entire organization. Most of the times employees failed to achieve their expected goals, despite putting their best efforts. However, this problem can easily turned into power, by effectively identifying the performance gaps and employee development needs. Identifying the areas of improvements and growth opportunities can help businesses and organizations to unlock the true potential of their workforce.

A digital performance management system provides a comprehensive framework to deal with such matters. With in-built monitoring and feedback tools, managers can easily identify the areas of improvements through constructive feedback, constant monitoring, regular coaching and evaluation. This will help them identifying the opportunities for training and development which will eventually help enhancing the employee performance and success. The performance improvement plans are crucial for elevating the both technical and behavioral competencies of the employees.

Identifying Performance Gaps and Employee Development Needs
Identifying Performance Gaps and Employee Development Needs

What is a Digital Performance Management System?

Traditional performance management systems rely on periodic reviews, assessments and feedback and often include a lot of manual work. A digital performance management system on the other hand is a robust solution comprising of tailored digital tools, software integration and real-time monitoring and analysis tools which make performance management more agile and impactful. The digital performance management system provides tools and methods that facilitate both traditional and modern performance management practices along with advanced analytics to monitor, evaluate and optimize the performance in real-time.

A modern digital performance management system provides continuous feedback, highly transparent assessments, and advanced tools to enhance communication and collaboration between the employees and the managers. It helps aligning the high-level organizational goals and objectives with individual employee goals and team goals and it also provide tool and mechanisms to helps businesses linking performance management to business outcomes.

Here are the key components of a modern digital performance management system:

  • Continuous Performance Monitoring: With in-built advanced analytical tools and intuitive dashboards the managers can continuously monitor performance metrics, quality of work, goal and task attainments, and much more having higher visibility and control.
  • 360 Degree Feedbacks: Businesses can incorporate 360 degree feedbacks within their performance management process. Digital performance management system provide tools to gather feedback data from various sources and consolidate them seamlessly in the insights.
  • Goal Setting and Alignment: With in-built advanced tools, managers and HR leaders can implement SMART framework or customized approach to set up goals and then scale them down to establish individual employee goals to ensure higher alignment and better performance.
  • Effective Development Plans: A performance management system provides a wealth of performance data with in-built analytical tools and reports which help HRs to create effective employee development plans by identifying their skill gaps, aspirations, career path and interests.
  • Performance Insights and Analytics: A digital performance management system comes with customizable dashboards powered by smart analytical software engine. This empowers both managers and employees with analytical tools, reporting dashboards and insights.

A digital performance management system is a customizable tools which help businesses implement a tailored solution which aligns with their unique goals and help enhancing their organizational culture for higher productivity, performance, profitability and growth.

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

Conclusion

Linking performance management with the business outcome is not about conducting annual reviews, or biannual reviews and appraisals, in fact it is an era of a modern performance management approach that appreciates data driven decisions, continuous feedback and help fostering a collaborative and productive organizational culture. Implementation of a digital performance management system that supports modern performance management methodologies is not optional, but a necessity to survive and thrive in competitive markets like in Dubai, Sharjah, Abu Dhabi and in broader UAE. In this fast-paced business landscape, where the customer demands keeps changing, the market trends could shift in days, the employees have more opportunities and the competition is rising day by day, a business needs a highly effective performance management system that not only elevate their operational capabilities and performance but also help fostering a culture of performance and productivity.

Higher employee engagements help driving performance, employee satisfaction and raise employee retention. The employee retention is crucial for a long-term success. The performance management system helps aligning the individual goals with the high-level organizational goals and strategic objective boosting the outcomes. In this blog we have discussed how crucial it is to link performance management to business outcomes and how this can be achieved with a modern digital performance management system. If you want to learn more about the subject or if you want us to help you implementing a tailored performance management system for your business or organizations, 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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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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Performance Management Trends in the Digital Era

In the era where digitalization is reshaping each and every aspect of our work and personal life, the performance management systems stand at forefront of business transformation. Performance management is a framework which provides a systematic approach to monitor and improve the performance of any organization. The workforce of any business or organization is its core strength, if your workforce is performing at its best you can produce more and high quality outcome by investing less resources. Think of the employees at a customer service center, one employee is able to serve 45 customers in a shift whereas another is only able to serve 20 – 25 customers a day. How would this impact your operational cost? The performance management not only streamline human resource processes, but it also help enhancing employee productivity and satisfaction. Businesses operating in Dubai, Sharjah, Abu Dhabi and other regions of UAE are well aware of the fact that the employee retention is one of the biggest challenge of modern day business landscape.

The high employee turnaround causes a lot many problems and indicates even more problems. Therefore in order to keep your workforce engaged and to offer them a productive organizational culture businesses turn towards modern performance management systems. A modern performance management system is a digital tool which consists of software application, analytical tools, and techniques to enhance performance and employee satisfaction. In this blog we will discuss how a modern performance management system can be game changer for your business.

Performance Management Trends in the Digital Era
Performance Management Trends in the Digital Era

What is Performance Management?

By definition, the performance management is a business process which involves continuous communication and feedback between the managers/supervisors and the employees. Traditionally the performance cycle is one year long, and at the end of each year the managers sits with the employees, interview them, get their feedback, analyze their progress towards set goals and objectives and on the bases of these feedbacks, reviews and progress manager determine how well or poorly an employee performance throughout the year. The primary goal of performance management is to align employee objectives with high-level organizational goals. The performance management system not only aligning employee objectives with organizational goals but it also ensures that the employee develop and become more skilled while ensuring a steady and sustainable business growth. The performance management system provides tools and streamline processes which help businesses create more effective employee objectives, while utilizing a systematic approach and digital framework to closely monitor employee performance and ensure every employee achieve their goals that contributes to the high-level organizational goal and objectives.

What is Performance Management?
What is Performance Management?

What are the Drawbacks of Traditional/Manual Performance Management?

The traditional performance management system are manual, usually following a one year long performance cycle, which means the appraisal is done at the end of very year. This process in itself is outdated, and incapable of meeting the modern needs of the businesses. However, there are several drawbacks of using traditional/manual performance management methods such as:

  1. Lack of Flexibility: The traditional performance management methods are annual or bi-annual which lacks the flexibility require to deal with dynamic job roles and frequent changes in the goals and objectives, which are crucial for course correction.
  2. Personal Bias: One of the biggest drawback of traditional/manual performance management process is that it is prone to human bias. Sometimes managers have bias towards certain employees, but most of the times employees think that their evaluation is not fair due to manager bias, hence reduced the overall fairness, accuracy and transparency of the system.
  3. Limited Feedbacks: Since the manager and the employees are not engaged throughout the year, the reviews and feedbacks are also infrequent, therefore it forms a gap between the needs and the actions hindering the improvement process and reduce the overall efficacy of the system.
  4. Lack of Employee Engagements: The employees are very less engaged in the performance management activities as most of the decisions are unilateral and employees have absolutely no or very little say over the policy making and even on their own development processes.
  5. Time-Consuming: The traditional or manual performance management process is very time consuming, majorly based on manual reviews and feedback processes involving a lot of paperwork and manual analysis. Furthermore the HR and employees both have to spare a lot of time for these activities.
  6. Unsatisfied Employees: The traditional/manual performance management system lacks the ability to satisfy employees because most of the employees and the HR leader doesn’t trust the system and are very skeptic. Poor communication, infrequent feedbacks and lack of engagement lead to further distrust and failed to satisfy employees, unsatisfied employees tend to leave sooner or later, causing more problems for the HR and the business as well.

The modern day employees wants instant gratification, they need more frequent feedback, higher contribution to the process and demand higher engagement. Which is not possible with traditional/manual performance management systems. Therefore businesses and organizations are turning toward digital performance management systems.

What are the Drawbacks of Traditional/Manual Performance Management?
What are the Drawbacks of Traditional/Manual Performance Management?

What is a Digital Performance Management System?

A digital performance management system is a technology-based solution that help businesses implement and adopt to modern performance management processes and techniques. The digital performance management systems are the latest trend in the rapidly evolving performance management sector. A business’s success very much depends on the performance of its employees, in order to boost this performance businesses implement several technologies and adopt to modern practices which help them make their employee more productive, happy and satisfied. A digital performance management system not only meet the modern performance management needs, but is proven to be many times more effective and accurate from the traditional/manual performance management practices. The digital performance management systems comes with a centralized software application and customizable tools which help businesses and organizations to implement modern performance management practices as per their needs and help them boost employee productivity with better monitoring, evaluation, transparent and accurate analytical and software tools.  In this blog we will discuss the emerging performance management system features and top trends.

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

Challenges Businesses can Overcome with a Digital Performance Management System

A digital performance management system can address several challenges modern day business are facing. It provides a comprehensive framework and support tools to improve the efficacy and impact of the performance management process. Here are some common challenges of the traditional methods which modern digital performance management system can easily overcome:

  1. Continuous and Real-time Feedback: The modern digital performance management systems offer continuous and real-time feedback data. The continuous feedback and real-time data increase managers’ visibility enabling them to take timely actions and course correction.
  2. Informed Decisions: The modern performance management systems offer a variety of monitoring tools and real-time updates, enabling managers to quickly identify the obstacles and problems. Comprehensive and customizable reports enable data-driven decisions and timely actions.
  3. Digitalization and Automation: The modern performance management system comes with a highly effective performance management software which digitalized several performance management processes, making it more effective and hustle free. The digitalization also drive automation lifting up the heavy workload from the HR team and managers.
  4. Flexibility and Adoptability: Modern performance management systems heavily rely on a software tools which offers great many features and customization to make the system more flexible and adoptable. Businesses can adopt to emerging needs and changes with in-built tools in a totally seamless manner.
  5. Employee Engagement: The modern performance management system offers variety of user interfaces and dashboards for various management levels and job roles. Intuitive user interfaces engage employees in their performance management activities and also streamline communication which enhance employee satisfaction.
  6. Effective and Efficient: The digital performance management systems are more effective, thanks to the digitalization and the automation it brings along. Furthermore the in-built tools, centralized management framework, real-time monitoring and data updates make performance management process much more efficient.
  7. Higher Employee Development: The digital performance management systems offer in-depth insight to employee performance and provide advanced tools for career planning, employee development programs and skill enhancement drives. All these tools help increasing employee satisfaction and also raise retention rate.

Businesses can completely transform the way they conduct their performance management by implementing a modern digital performance management system. It is not just an upgrade to modern technology but it provides a systematic framework to gradually boost the performance and productivity enabling businesses and organizations to leverage the true potential of their workforce.

Challenges Businesses can Overcome with a Digital Performance Management System
Challenges Businesses can Overcome with a Digital Performance Management System

How Automation and AI is Redefining the Performance Management

The Human Resource is one of the essential business function. Without a high-performing HR a business can never achieve its desired goals and objectives. A digital performance management system is a tool which not only help HR team but also aid administration and provide higher management with deep insights, better understanding of internal process, workforce capabilities and various aspects of growth and scalability. The digitalization drives automation and with the advancement of the technology and AI or Artificial Intelligence businesses are boosting their operational and functional capabilities. The integration of digital and technology-driven tools empowered by advanced algorithms and artificial intelligence businesses can greatly boost their performance and capabilities. Traditionally the performance management is limited to annual or bi-annual reviews, paper-pen based feedback forms, subjective assessments and manual work.

The modern performance management software equipped with AI and advanced analytical tools are completely reshaping the performance management. Businesses can have real-time reporting, behavioral analysis, technical analysis, and various analysis in intuitive performance monitoring dashboards and above all the data is updated in real-time. All these features help management quickly identify and rectify problems. This ensures that each and every employee is fully aligned with the high-level organization goals and objectives.

How Automation and AI is Redefining the Performance Management?
How Automation and AI is Redefining the Performance Management?

What are they Key Advantages of a Digital Performance Management System?

As I have mentioned above the digital performance management system can help businesses overcoming several challenges of traditional/manual performance management methods, the digital performance management system offers several benefits which further improve performance and help businesses gain a huge competitive advantage by achieving highest possible operational and administrative efficiency. Here are key advantages of a digital performance management system:

  1. Align Employees with Business Goals: Aligning employees with business goals is crucial for the success. For that the most important thing is to be able to create individual goals and objectives that positively contributes to the high-level organizational goals and objectives. It is also important to communicate those goals and objectives with at most clarity to create a purpose-driven workforce who knows what they are doing, why they are doing it and what do they will achieve by success. A digital performance management system offers specialized tools to align employees with the high-level business goals along with real-time monitoring tools to keep employee aligned with the business goals through the performance cycle.
  2. Enhanced Feedback and Reviews: There are several methods businesses use to improve the quality of the feedback and reviews. These feedback are reviews are absolutely essential for making crucial decisions and defining employees’ career path. Therefore adopting to 360 degree review or 720 degree reviews could provide a much deeper insight to employees’ performance as well as the performance of the managers and even higher management. All these features help highlighting the factors that are hindering performance and also provide valuable insight to take decisive actions and strategic decisions to rectify these problems.
  3. Better Investments in Employee Development: Businesses are investing huge amount of money and efforts in employee development programs. However, without an accurate and deeper understanding of employee’s strengths and weaknesses, the employee development programs failed to deliver desired results. The digital performance management system provides full 360 degree view of employee strengths, weaknesses and also the context of their performance. All these tools help businesses to design employee development, up-skilling and reskilling programs with much higher impact which later contributes to the overall success.
  4. Higher Focus on Contextual Performance Management: Businesses are utilizing digital performance management systems to increase their focus on the contextual performance management. The major difference between the contextual performance management and traditional performance management is that rather than focusing on regular performance metrics the contextual performance management also includes the environment conditions in which employee operates, the team dynamics, employee skillset, and even the external factors such as personal and economic conditions of the employees as well. This level of information skyrocket the accuracy, fairness and transparency of the performance management system and greatly improve employee satisfaction.
  5. Reward and Recognition: Businesses are realizing the importance of reward and recognition. It is not just the monetary gain that the employee seeks the most, but only appreciation and proper acknowledgement of their achievement could greatly increase their happiness and satisfaction. The modern performance management systems offer a comprehensive framework to design a successful reward and recognition program. Instead of one-fit-all businesses are leaning towards the personalized rewards, hence the digital performance management system makes it easier to help designing a reward and recognition program which suits employee’s expectations. The modern performance management system help management greatly boost motivation and drive performance while maintaining maximum level of engagement.

A modern performance management system is capable of boosting productivity and performance while ensuring employee satisfaction and higher retention rate. The digital performance management systems also help in recruiting, onboarding and off-boarding activities keeping the overall morale high and ensuring highest level of transparency and accuracy in the performance management system.

What are they Key Advantages of a Digital Performance Management System?
What are they Key Advantages of a Digital Performance Management System?

Conclusion

Businesses in Dubai, Sharjah, Abu Dhabi and all around the UAE are well aware of the importance of employee retention and employee satisfaction. Businesses are using various different performance management systems and methods to do the same. However, with the passage of time the traditional/manual performance management systems are losing their ability to make desired impact. Both managers and employees are losing trust over traditional performance management methods. Therefore business are turning towards the more modern and advanced digital performance management systems. The annual or bi-annual reviews are replaced by the more in-depth contextual performance management and continuous feedbacks. Businesses are increasing employee engagements in the decision making, goal setting and various strategically important processes. All this is possible due to the advanced capabilities and features of a digital performance management system. A centralized management framework with personalized dashboards and real-time data, businesses can effectively overcome all challenges of past. Furthermore the easy customization, flexible control integration with AI and advanced tools can greatly improve the control and visibility and help management make their performance management process more effective, impactful and fruitful.

In this blog we have discussed all major aspects of the modern performance management. If you want to learn more about the subject or if you want our help to build and implement a customized 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 Design a Modern Performance Management System?

The overall business landscape have drastically changed over the past decade, with the rise of smartphones, internet, social media and digital communication, the way business are building and nurturing their relationships with their customers have completely changed. In the modern fast-paced and highly competitive market environment it is crucial for a business to adopt to modern practices, methodologies and technologies. The performance management system is no exception at all, if you will compare the modern performance management system with the performance management practices just around a decade back, the present day performance management is totally unrecognizable. The modern performance management systems are designed with an aim to support every organization’s unique internal culture, minimize the influence of bureaucracy, increase transparency and maximize the impact of the performance management and human resource programs. Dubai, Sharjah, Abu Dhabi and other emirates of UAE are witnessing continuous growth, which is attracting more businesses and raising the competition. The governments are also turning toward a modern UAE government performance appraisal system in order to ensure excellent services for the citizens. Furthermore the rapidly changing market trends, and ever-increasing customer demands are compelling businesses to utilize their resources at the maximum potential in order to ensure stability and growth. That is what make performance management system a game-changing tool.

How to Design a Modern Performance Management System?
How to Design a Modern Performance Management System?

What is a Modern Performance Management System?

The major difference between the traditional and modern performance management system is that the old method relies on annual reviews, the modern methods offer more frequent reviews, better performance data collection and analysis, and include software tools which makes the employee performance management process more effective and impactful. When the employees doesn’t have a proper communication with their managers, they are blindfolded and couldn’t know if they are progressing in the right direction or not. Another biggest difference between traditional and modern performance management system is that it focuses on the people and help managers maximizing their potential. However, the traditional performance management system focus on what has been done in past, and have no visibility of the future at all. The software aided modern performance management system is more integrated, robust, responsive, and reactive and can easily be incorporated in the modern work flows.  The modern performance management system offer a more contextual and comprehensive performance data which help managers and employees to identify the problems and help them set course for the future to achieve the excellence. The modern performance management system doesn’t only focus on the monetary incentives, but it offers in-depth employee development programs, it is more engaging and empowering, and help building trust on the performance management process.

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

What is a Modern Performance Management System?
What is a Modern Performance Management System?

What are the Characteristics of a Modern Performance Management System?

Businesses should be aware of modern performance management trends. Because in order to implement a modern performance management system you must understand what the characteristics of a modern performance management system are which distinguished it from a traditional performance management model.

  1. Digital Transformation: The biggest advantage of a modern performance management system is that it enables digital transformation by implement software based solutions and tools. The performance management software help automating several tasks driving efficiency and accuracy in the process.
  2. People Focused: The modern performance management systems focused on both the high-performing employees as well as the low-performer. It offer a great balance between the accountability and the development, which encourage all employees to perform better and also help low performers to achieve their goals while rewarding high-performing employees.
  3. Continuous: The modern day employees want more frequent and instant reward, they don’t like the concept of waiting for an entire year. A continuous performance management system offer continuous communication, frequent reviews (biannual, quarterly, and even monthly), continuous feedback and frequent one-on-one meetings.
  4. Transparent: Most of the business leaders and the employees don’t trust on traditional performance management system due to several factors. However the modern performance management system offers more transparency, it provide more accessibility to performance data and can keep the record of all past data, meetings, and reviews.
  5. Adaptive: The modern performance management systems are great and offer castigation which enables them to adopt to changes in trends, needs and even allow businesses to implement customized performance management strategies and policies. The ability to integrate with other systems and collect performance data from multiple sources make them more adaptable.

See Also: Benefits of Implementing a Modern Performance Management System

These are the essential features which distinguishes between traditional and modern performance management system.

What are the Characteristics of a Modern Performance Management System?
What are the Characteristics of a Modern Performance Management System?

Step-by-Step Guide on Designing a Modern Performance Management System

Now that we understood the difference between traditional and modern performance management system and its benefits as well, let us dive into the actual process of designing a modern performance management system which resonates with your organizational culture and performance needs.

  1. Identify Your Needs: It is important to understand the needs of your organization. Every business have different priorities, different challenges and different culture, this is why it is important to identify your needs. You will have to review the current performance management model and then do some brainstorming to identify the needs of your new strategy.
  2. Chose The Purpose: Once you identify your needs, you should chose the primary purpose of your modern performance management system. There are five major purposes of implementing a performance management framework, accountability, organizational alignment, cultural alignment, development, and recognition. You should prioritize each one as per your needs.
  3. Understand the Workflows: Understand who is making decisions and how decisions are being made. How the information are flowing, what communication channels you are currently using and what you are planning to use in future. Understand how you are currently defining roles, goals and objectives and how the success should look like.
  4. Performance Fundamentals: No matter what performance management model you want to use, the performance fundamentals are the same, reviews, feedbacks and goals. Implement mechanisms to make reviews fair and transparent. Implement SMART goals, focus on accountability, development and alignment and lastly implement continuous feedback model.

See Also: How the HR should select a Performance Management System?

If you follow the above steps you can easily identify your needs and the scope of your new modern performance management system. There are two ways to implement a new performance management system. First you can acquire a ready-made commercial off-the-shelf solution, or the second and more effective way is to acquire a professional software development agency in Dubai, such as RSI Concepts and let them build a customized performance management system as per your needs.

Step-by-Step Guide on Designing a Modern Performance Management System
Step-by-Step Guide on Designing a Modern Performance Management System

How to Analyze the Effectiveness of your New Performance Management Model

Once you implemented a tailor-made modern performance management system you will definitely witness improvements, however, in order to analyze the effectiveness of your new performance management system you can perform a thorough analysis using the following steps:

  1. Start with market research, understand your industry trends, and set the performance benchmarks for your industry.
  2. Set and enlist organizational goals and objectives and accordingly set the individual goals that you are planning to achieve with your new performance management system.
  3. Based on your organizational goals and objectives define how the success should look like for individual goals, also classify performance in three categories, high-performer, low-performer and average performers.
  4. Now compare your design of performance management system and its success measures with this performance management model based on industry benchmarks.
  5. Now try to minimize the gap between both performance management models and you will get a most efficient performance management system.

This analysis will help you improving your design of modern performance management system and it will help you maximizing the impact of your performance management program.

See Also: 5 Challenges in implementing Performance Management System

How to Analyze the Effectiveness of your New Performance Management Model?
How to Analyze the Effectiveness of your New Performance Management Model?

Conclusion

Implementing a modern performance management system can greatly improve your employees’ performance, engagements and help you increase retention. When the employees and managers both trust on the performance management models and tools they tend to perform well and it also help elevating their morale which is absolutely essential for productivity and efficiency. There are several modern performance management systems available in the market, however, it is highly unlikely that any off-the-shelf performance management software can fulfill all your needs and produce the desired results. That is why we recommend going for a customized performance management system. In this blog we have discussed the difference between a traditional and modern performance management system, we also discussed how you can design a perfect performance management system which will empower your management and workforce. If is important to critically analyze the performance management model that you are building for your business. You can revise your model many times before reaching to the optimum results. If you want to learn more about the subject or if you want our help to design your new modern 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.

See Also: Why Custom Performance Management System is more Effective?

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Employee Evaluation and KPIs for Better Employee Performance

With the rise of technology, the customer expectations have increased, the market trends have been changed, and the competition is getting tougher day by day. Businesses need to be very productive in order to be able to survive in the current market landscape of UAE. An effective performance management is the solution to level up your game and out-perform your competition. Businesses operating in Dubai, Sharjah, Abu Dhabi and other parts of the country are well-aware of the competitiveness of the market and the skyrocketed demands of the customers. That is why businesses are continuously seeking ways to optimize their internal processes, operations and workforce. Most of the large businesses, enterprises and organizations are using some kind of performance management process, to monitor and improve their performance. Whereas, small and medium sized businesses usually don’t focus much on this aspect. However, the performance management is equally important and effective for all types and sizes of businesses and organizations.

Employee Evaluation and KPIs for Better Employee Performance
Employee Evaluation and KPIs for Better Employee Performance

It is important for a business to understand where they need improvements and how they can leverage the true potential of their workforce to achieve the business goals. For any business employee turnover is a very challenging aspect of HR. Employee retention is connected to employee satisfaction. The employee satisfaction and employee retention is linked to employee engagements. If you are providing a highly engaging environment to your employees where they are given a productive organizational culture, your employee turnover will be less, not only that the employee satisfaction also results in higher customer satisfaction which translates to growth and profitability. When it comes to performance management the employee evaluation and KPIs are they key factors. A good performance management system must provide a comprehensive framework to evaluate employees and monitor their KPIs. In this blog we will discuss how employee evaluation and KPIs can help businesses improve their performance.

For any business employee turnover is a very challenging aspect of HR.
For any business employee turnover is a very challenging aspect of HR.

What is the difference between a KPI and a metric?

People often confuse a KPI and Metric, however, both are different. A KPI or key performance indicator is a high-level indicator which provide context about the business goal and it tells how these goals are related to different business functions. The metric is a low-level perspective and it is used to track activities and processes of different business functions. For example, a business wants to increase its customer satisfaction by 20%. That would be a KPI. In order to achieve that goal, different business functions such as customer service team, sales team, marketing, management and various other departments will have to improve their performance, each department or business functions’ metrics will be used to measure the impact of their activities and processes on the high-leave business goal. The best metric to measure customer satisfaction is the NPS or net promoter score, businesses can also use other metrics such as customer satisfaction index to understand their progress towards their goal.

What is the difference between a KPI and a metric?
What is the difference between a KPI and a metric?

How to set KPIs which are aligned with high-level business goals?

The most common mistake businesses made during their performance management campaign is not aligning their KPIs with their high-level business goals. Here are a few key points to consider while creating KPIs:

  1. Start by setting up or analyzing your business goals, for example, if you want to increase sales, or raise customer satisfaction, etc.
  2. Define what you will measure, for example, in case of customer satisfaction you can measure customer satisfaction index, and in case of sales you can measure the increase in sales.
  3. Once you know what you will measure, you have to understand how you can collect that data, for sales, it is easier you can just see how much sales you made, for customer satisfaction you can use NPS or customer happiness gauge, etc.
  4. In order to measure the performance you must have to be able to communicate and relate the KPI to the employees and managers. Your KPI should be able to engage the employees and it should be able to raise the morale and motivate them to put efforts towards achieving it.
  5. Adopting SMART framework is a great way to boost employee engagement. The SMART stands for Scalable, Measurable, Attainable, Realistic and Time-bound. Implementing SMART framework and defining the targets or target range is crucial.
  6. Make an action plan for if the KPI falls outside of the target range, and ensure your action plan is realistic and executable given the circumstances and available tools, workforce or skillsets in hand.
  7. Reviewing and analyzing the performance data is a continuous task, the KPIs should be monitored regularly and the data should be analyzed properly to extract meaningful insight from it.
  8. It is important to fine tune your KPIs over the time to ensure your KPIs deliver value to your business and will remain relevant to your business goals, industry benchmarks and competitive landscape.

If you will follow the above steps it would be much easier to set effective KPIs and if you have to redefine them or improve them you can also do easily with the above mentioned steps.

How to set KPIs which are aligned with high-level business goals?
How to set KPIs which are aligned with high-level business goals?

How to collect employee performance data?

When we are measuring something it is usually a number, however, the human performance is not something which can entirely be measured on the bases of hard numbers. Although a good performance management system measures employee performance in quantifiable metrics but this is not as that simple as measuring the weight or height. Here are a few most effective methods of measuring the employee performance:

  • Rating Scales: Using the rating scales or graphical rating scales is one of the best way to measure employee performance in different performance areas. The graphical rating scales are usually sequential numbers such as 1 to 10 or 1 to 5. Usually the rating scales are used to measure the behavioral competencies, for technical competencies other tools are used.
  • Feedbacks: The feedbacks or 360O Feedback is one of the most commonly used and most effective method to collect employee performance data. The 360O Feedback includes taking feedback from supervisor/manager, peers, customers, suppliers, cross-team management, and any other stakeholder and then it is analyzed for common trends and similarities.
  • One-to-One: The one to one meetings are a great way to quickly evaluate the performance and identify the areas of improvement. A good performance management system also facilitate one-on-one meetings and provide intuitive features to document them. The one-on-one meetings and discussions can help bridging the communication gap between the managers and employees which is essential for improving the performance.
  • Management by Objectives: The Management by Objectives or MBO is a process where the employees and the managers define the objectives with mutual understanding. Thus the employees have a better understanding of what is to be expected from them and how the success would be measured. This is a great way to increase employee engagement and improve communication between employees and the managers.
  • Self-Evaluation: The employee self-evaluation is one of the best way to increase employee engagements and motivation. Often employees are more critical of their performance than the managers are. Which help managers to compare the employee’s self-evaluation with their evaluations. It help finding similarities and provide a better understanding of the employee performance, it also help managers to build good employee development and training programs.
  • Check-list Forms: A simple check-list form is a great way to quickly evaluate an employee. It could be used for both behavioral and technical competencies. It will help managers identify the employees with major deficiencies in important performance areas and help them improve training programs and also in forming high-performing teams.

There are several other ways and methods to collect employee performance data, however, the most important thing to understand is that the employee performance management requires continuous monitoring and tracking of the employee performance.

How to collect employee performance data?
How to collect employee performance data?

Conclusion

No matter how high-tech or advanced your IT infrastructure, assembly line, production plant or customer service center it, one thing is essential and it is your employees who will be utilizing those technologies and resources to generate value. The value which will help you satisfy and retain your customers and help you build a good brand image. Markets in Dubai, Sharjah, and Abu Dhabi or in any other emirate of the UAE are very competitive, the customers tend to switch very quickly if a business fails to meet their needs or expectations. In such a tough and competitive market landscape it is important to ensure you are utilizing your resources at their full potential whether it is human resource or non-human resource. That is why the performance management system is so crucial for a businesses of all types and sizes. The two core aspects of performance management are employee evaluation and KPIs. In this blog we have discussed what KPIs are and how businesses can utilize them to harvest the highest possible value form their resources. If you want to learn more about the subject or if you want our help to implement a highly cost-effective and tailor-made 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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Why Custom Performance Management System is more Effective?

In the fast-paced business landscape it is extremely important for a business to utilize its resources at fullest potential. Businesses operating in Dubai, Sharjah, Abu Dhabi and anywhere else in UAE are well aware of the fact that the markets in this country tend to change very quickly, the customer demands are also increasing endlessly. That is why businesses all around the UAE give a lot of attention to performance management frameworks. The performance management is one of the primary task of the HR department and that is the reason HR leaders and businesses are ready to invest a lot in performance management systems and programs. There is another strong reason for investing in performance management system which is the adaptation of agile processes and methods. When businesses adopt agility, a gap is formed naturally between the managers and the employees. Most of the time the business leaders and managers failed to implement proper people management practices which results in dissatisfaction and distrust among the employees and undermine their performance and productivity.

Why Custom Performance Management System is more Effective?
Why Custom Performance Management System is more Effective?

The modern day employees are also more concerned about their personal development and growth, they want more frequent feedback from their managers which help them improve their skills and productivity. There has been several surveys and studies all around the world which suggested more than 80% of the business leaders lost faith on the traditional performance management practices and annual appraisal processes. Almost similar percentage of employees also express their distrust on traditional performance management methods. Therefore a modern, digitalized and technology based performance management system is needed. Basically a performance management system is a software tool, which can provide a continuous performance monitoring tools and analytical data and allow both managers and employees to access valuable performance management data in a very intuitive and interactive manner. Only a modern digital performance management system solution can fulfill the needs of the modern businesses. In this blog we will discuss why a custom performance management system is more effective for your business.

Only a modern digital performance management system solution can fulfill the needs of the modern businesses.
Only a modern digital performance management system solution can fulfill the needs of the modern businesses

What is the Difference between a COTS and Custom Performance Management System?

Before we discuss what is the difference between a custom and COTS performance management system it is important to understand that a performance management system is a software which is used to streamline and improve the performance management processes such as one-on-one meetings, acquiring feedback, appraisal, developing personal development and training programs and other such tasks. For any HR department it is their prime goal to retain and sustain a skilled workforce and ensure other business functions can get the required talent and skillset. The performance management system is built on a powerful analytical and statistical engine, along with smart algorithms and AI software tools which makes it more efficient, impactful and effective. When it comes to acquire a new software tool there are two options, one is hiring a professional software development agency like RSI Concepts and have a tailor-made solution which matches 100% of your business needs. The second option is to quickly implement a cloud-based solution or acquire a ready-made performance management software. Both the ready-made and cloud-based solutions are COTS software, it means Commercial Off-the-shelf Software. The COTS are not designed for a single business or a specific set of users, in fact they are general purpose tools which are designed and available to a mass audience ranging from a few hundred to millions of users.

What is the Difference between a COTSand Custom Performance Management System?
What is the Difference between a COTS and Custom Performance Management System?

What made Custom Performance Management System Superior and a Better Match to your Needs?

Whenever a business needs a software solution and they decide to go with a commercial off-the-shelf software or COTS they usually seek to match as much of their needs as possible, on an average a good COTS solution will meet your 80% of needs. That means you will have to make compromise for the rest of the 20% of your needs. That is one of the major reason business prefer to have a tailor-made custom software solution because a custom software solution is capable of meeting 100% of your needs as it will be exclusively designed for your needs. Another great advantage of a custom performance management system is that it can provide a great competitive advantage. Furthermore the custom performance management system is exclusively designed for your business, so you also hold the ownership rights for the product. This will free your business from vendor-dependency. Businesses can manage, customize and upgrade custom performance management system in-house as well as they can choose any vendor to do so, as the entire software tool and its resources such as source code, databases and integration tools are handed over to the business who will be using it.

What made Custom Performance Management System Superior and a Better Match to your Needs?
What made Custom Performance Management System Superior and a Better Match to your Needs?

Here are some key advantages of choosing a custom performance management system over a COTS solution:

Custom Performance Management System: Effectively Implement Strategy

It is important to understand that the performance management is a very flexible concept. Every business has a unique organizational culture so does the strategy to implement different performance methods. It is due to the preference which every business have different from the other. These preferences are based on the business goals, strategic objectives and their desire to improve certain aspects of the performance. For example, some businesses might prioritize the technical competencies and some might want to focus on behavioral competencies and so on. Along with that for a different set of employees the KPIs are different the desired outcome is different, hence the strategy and focused performance aspects would be different. Furthermore there are different performance management methods and every business would have different choice, on top of that most business leader prefer to use a combination of two or more methods to implement their own unique performance management strategy. That is the reason the commercial off-the-shelf software solutions can never fulfill all of your needs. Furthermore the COTS are built as per industry standards and offers more rigid framework. However, a custom performance management system can offer you more control, flexibility, freedom and customization which enable you to effectively implement your own unique performance management strategy. You can utilize in-built templates and configurations wizards to setup your own customized KPIs, OKRs and performance metrics as per your needs. This allow you to laser focus on your prioritized aspects of the performance management which can greatly improve the impact and outcome.

There are different performance management methods and every business would have different choice
There are different performance management methods and every business would have different choice

Custom Performance Management System: Easy Integration with Data and Third-party Systems

The entire performance management system depends on collecting, flow and analysis of the data. It is extremely important to understand that if data collection would be easier, the outcome would be more accurate. That is why most modern performance management systems have ability to automatically collect data. Businesses can manually upload data too or they can use dedicated dashboards to input the data but it is important that uploading data or integration and automated-data collection is as per the needs of the business. The IT infrastructure of any organization is a very complex eco-system, it develops gradually and evolve as per the needs and changes within the organization or due to the impact of external factors. This means there would be a lot of different system some of which might be integrated already with the central information system. There could be a lot technology platforms and different vendors that a business is using to form their IT infrastructure. When a new software application is deployed in such environment the biggest challenge is integration and communication between different third-party systems and tools. Since the commercial off-the-shelf software are usually standardized tools, hence integration could be a big challenge, it could be very expensive and in some cases it could be impossible. However, the customized performance management system is exclusively built for your needs, so all these problems are already accounted for. All these challenges can be dealt effectively and with convenience when you have full control over the structure of the software that you are building. That is why the customized performance management system are more effective in integrating with third-party tools and databases, which allow them to easily attain automation and built innovative features to minimize the effort and workload of the users. Even in case of manual uploads or dedicated dashboard to input data the customized performance management system is much more effective and far superior to any COTS solution in the market.

Easy Integration with Data and Third-party Systems
Easy Integration with Data and Third-party Systems

Custom Performance Management System: Get Customized Features and UI

Similar to performance strategy implementation, the features of the performance management system also require customization if you want to align the system with your needs. The biggest problem with the commercial off-the-shelf performance management software is that they are built according to the industry standards and only follow standardized procedures and processes. Which is helpful but sometimes it could be a hurdle instead of support. The custom performance management system software is exclusively designed as per your requirements hence there is no such barrier or limitation. You can customize each and every feature, process, SOP, protocol and even the reporting formats and designs. For any performance management system the ultimate goal is to collect performance data, drive reports from the data and then take informed decisions to maximize the probability of the success. There is another most important aspect which is the user interface (UI). Most of the businesses doesn’t focus much on it, however, it is extremely important aspect of any software application. With the custom performance management system you can customize the GUI or UI as per your requirements, you can have your customized branding, and even functionalities can be customized and labeled as per your needs which can greatly enhance the efficiency and efficacy of the performance management system. The stock or off-the-shelf solutions doesn’t offer such customizations.

Get Customized Features and UI
Get Customized Features and UI

Custom Performance Management System: High Scalability and Easy Upgrade

Whenever businesses are acquiring any software solution, the scalability and ability to upgrade it in future are the two most important aspects to consider. The commercial off-the-shelf software comes with several restrictions and limitations. Similarly the commercial off-the-shelf performance management system could be easier and quicker to deploy but down the road it will pose more challenges. Furthermore these software are usually cloud-based and comes in different tiers and plans which are designed to target a specific size or industry. Hence if you need some features which are not available in your plan you might have to subscribe for additional plan, which will be more expensive and at the end of the day most of the features comes with expensive plan might not be useful for your business. The markets evolve very fast, the customer demands could change over the night, and business need to be very vigilant and responsive towards such changes, which is usually not possible with the commercial off-the-shelf solutions. Furthermore these applications take ages to develop and build new features, there are several challenges for the vendor to upgrade them. Businesses keep growing and after sometime scaling up these software would cost you a lot. The custom performance management system is completely free from all those limitations and restrictions. You can customize it whenever you want, you can scale it up or downsize it whenever you need and without paying even a single dime. Furthermore you can also customize your custom performance management system to add new features or to make changes at a nominal cost unlike the COTS which incurs hefty fees and charges for such requirements.

High Scalability and Easy Upgrade
High Scalability and Easy Upgrade

Custom Performance Management System: Cost-effective and High ROI

When we compare the initial cost of the commercial off-the-shelf solutions and the customized software applications, the COTS apparently looks more cost-effective. However, that is not true at all. The COTS can be deployed quickly but won’t be able to fully match your 100% of the requirements, however, the custom performance management systems have higher initial cost but can fully aligned with your requirements and fulfill your 100% of the needs. In order to compare the cost we will have to look at the ROI over a longer period of the time. The stock or commercial off-the-shelf solutions have regular subscription charges which you will have to pay on monthly, quarterly or yearly bases as per your plan. You will have no control over the software vendor, the vendor will own the application and in some cases your data is also stored at vendor’s server which is not as that secure. However, the custom performance management system is exclusively designed for your business, the vendor doesn’t have the ownership of the application, instead you will own the ownership rights of the software and you will also own all the software code, resources and the entire application which will be handed over to you. You can have full control over your custom performance management system, there is no vendor dependency, you can chose any vendor or even in-house team to maintain and upgrade your software. Your data will be hosted with you or at the server/cloud of your choice which offers better security. There will be no subscription fee or hidden charges, the customization will be very cost-efficient and if you calculate the ROI over an extended period of time the custom performance management system will cost you less than half of a reputed commercial off-the-shelf performance management system. The custom performance management system have longer life-cycle which can be further extended by making few changes and iterations, but in case of COTS you might have to acquire a completely new software after a few years.

Cost-effective and High ROI
Cost-effective and High ROI

Conclusion

Businesses operating in Dubai, Sharjah, Abu Dhabi or any other emirate of UAE knows that very well that the markets here are very competitive. The overall government policies and environment is very investor-friendly hence the competition will keep rising in future too. Furthermore the customer demands are also skyrocketing and the market is subjected to rapid changes. In such environment if a business want to maintain a steady growth it is extremely important for them to have a proactive performance management strategy. The modern day employees need higher engagements and the business leaders also want more productive and effective tools to maximize the performance and productivity of their organization. That is why businesses deploy performance management systems which are mainly a dedicated software application designed to streamline the performance management processes and aid management in performing performance management tasks. When it comes to acquire a performance management system software, businesses have two way, one is finding a suitable commercial off-the-shelf solution and quickly implement it and the other is slightly longer path, which is to develop a tailor-made and fully customized performance management system which is exclusively designed for the business by keeping in mind all the needs, requirements, and existing IT infrastructure.

In this blog we have discussed several aspects of performance management system and tried to highlight the aspects which make custom performance management system more superior, effective and impactful then its counterpart, the commercial off-the-shelf performance management software. If you want to learn more about the subject or if you want our help to develop an exclusive tailor-made custom 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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5 Challenges in implementing Performance Management System

5 Challenges in implementing Performance Management System

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.

5 Challenges in implementing Performance Management System

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.

5 Challenges in implementing Performance Management System

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.

What is a Performance Management System?

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.

Challenges in Implementing Performance Management System: Customized Software

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: Customized Software

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.

Challenges in Implementing Performance Management System: Goals & Objectives

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: Goals & Objectives

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.

Challenges in Implementing Performance Management System: Evaluation & Feedback

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: Evaluation & Feedback

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.

Challenges in Implementing Performance Management System: Rewards & Development

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: Rewards & Development

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.

Challenges in Implementing Performance Management System: System Integration

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.

Challenges in Implementing Performance Management System: System Integration

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.

Check out this: Why customized CRM Software is better than Off-the-shelf Solution?

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Performance Management through OKR System

Performance Management through OKR System

The technology have integrated far deeper in our daily lives than we can perceive. The businesses are no exception at all. The modern businesses face modern problems which requires modern solutions. For any business having everything in order is critical. When all employees and resources are aligned with the high-level organizational goals and objectives, only then the highest performance can be achieved. Usually businesses have enough resources, but they are either not properly using them or simply there is too much waste in the system. It could be both non-human and human resource which is underutilized or utilized incorrectly. The biggest challenge for the HR department is to ensure all the required skillsets and talent is made available all the time to all departments within the organization. However, that is not just achallenge, in fact that is the prime goal of the HR. In order to achieve this goal, the HR will have to face many challenges and obstacles. Furthermore the HR is also responsible to keep improving the workforce by implementing strategies and plans for training, motivation, and performance management.

Performance Management through OKR System

The HR is also responsible for hiring new staff to fill in the gaps that may arise down the road. This all can be done only if the HR will have clear visibility of the performance of the existing resource and understand the gaps between the workforce or skillset that are needed to meet the requirements.Businesses and enterprises in Dubai and all around the UAE are using a variety of performance management system to maximize the productivity and performance which ultimately translates into higher profitability and revenue. The biggest advantage of using an agile performance management system or CPM (continuous performance management) is that it provides a very effective framework for goal management. It improves visibility, accountability and help aligning teams and individuals with high-level organization goals.

Performance Management through OKR System

The OKRs also help businesses achieve autonomy and let teams work autonomously by making them able to understand how their work is contributing to the high-level organizational goals and objectives. Most of the times businesses confuse OKRs with the Performance Management, however, the OKRs are a framework for the goal management and the performance management majorly tend to evaluate employee performance.This doesn’t mean the performance management and the OKRs are rivals or can’t work together, in fact if a business wants to enjoy the maximum of both, they should align and integrate OKRs within their performance management process.

What is the Difference between the Performance Management and OKRs?

The OKRs are Objectives and Key Results. The OKRs are set by teams and managers for the teams and it always have a clear goal and objectives which can be measured clearly by the outcome. For example. We will improve customer service by increasing customer satisfaction. The improvement in customer service is an objective and how much improvement is done, that can be measured by the customer satisfaction survey, or by NPS score or even by reduction in customer churn rate or even by all those factors altogether. To achieve the OKRs several different employees will have to work together. In our example, in order to improve customer service, many teams must have to work together to produce the desired outcome. However, the performance management is entirely a different process with a different scope. It involves, high-level planning, continuous monitoring, reviewing or evaluation and then rewards & acknowledgements for the individual employees instead of teams. Although performance management also measures the teams’ performance but the main focus is at the individual performance.

What is the Difference between the Performance Management and OKRs?

The OKRs are not the employee evaluation, in fact it is the measure of the employees’ and teams’ contribution to the high-level goals and objectives. The performance management on the other hand is the evaluation of the performance of each employees for a given period of time. Hence the OKRs and the performance reviews should be kept separate and independent. Neither should dictate the other. The performance management system focuses on the outputs and attainments while the OKRs focus on the outcomes. Most of the outcomes for a business are not an individual effort, but a collective and collaborative effort by multiple employees and teams. That is why the OKRs focus on the outcomes instead of individual outputs. The OKRs inspire innovation and are designed to encourage teams to set more bold and stretched goals. Which encourage the entire teams to perform better and motivates them. The performance management doesn’t require collaboration as it is focused on individual goals, however, the OKRs encourage collaborations and demand collective efforts to maximize the outcome that is aligned with the high-level organizational goals and objectives.

What is the Difference between the Performance Management and OKRs?

How Businesses can Improve Performance Management through OKR System?

Now that we have established a clear understanding of the performance management system and OKR system, we will discuss how both can be used in parallel to maximize the results. The OKRs are also used to aid performance management process but unlike the traditional performance management system the OKRs focus more on broader goals and results. The OKRs have two parts, the objectives and the key results. Usually there are 3 to 5 primary objectives with additional 3 to 5 supportive or relevant objectives. These goals and objectives tend to be measured with quantifiable outcomes which are usually monitored through KPIs (key performance indicators). The biggest advantage of the OKRs is that all the goals are communicated well with the teams they have their say in it, and all goals are aligned with the high-level organizational goals and objectives. The goals set under OKR framework are always achievable but challenging which is a key to maximize the outcome. The OKRs cycle is also more frequent, usually it is 2 to 4 months, unlike the performance management cycle which is usually 12 months. This also provide better visibility and much deeper understanding of the progress and the factors that are impacting the productivity.

How Businesses can Improve Performance Management through OKR System?

Basically the OKRs are used to support faster growth and help businesses in more dynamic and fast changing markets. There are several multinational businesses and enterprises who have performed exceptionally with OKR system, such as:

  • Google
  • Intel Corporation
  • Meta (Facebook)

And many more. All those companies are well-known for their hyper-growth and global expansion. The OKR system helped them and thousands of others to effectively maximize the productivity of their teams and individual employees.

Here are some key benefits of using OKR System to boost the performance:

OKR System Align all Resources with your Vision and High-level Organizational Goals

Every organization have a long term vision, in order to achieve that visions businesses set high-level organization goals and objectives. On the bases of these high-level organizational goals and objectives, the management develop plans and strategies which help them achieve those goals and objectives. Usually these goals and objectives scaled down to lower hierarchies such as different business functions, departments, teams and even individual employees. The prime goal is to achieve the high-level organizational goals and objectives that led the business to achieve its vision down the road. The OKRs are usually set in the same fashion. Start with high-level organizational OKRs, which later divided into departments, teams and even individuals. With a traditional performance management system a time comes when achieving the goals of the individuals, teams or even departments could become very difficult while performing daily tasks or work as per the respective job role or function. However, with OKR System business can assign different goals to the teams and departments and different goals for the individual employees which ultimately aligns with the high-level organizational goals and objectives. This can significantly boost the performance and produce better outcomes.

OKR System Align all Resources with your Vision and High-level Organizational Goals

OKR System Produce Better Outcome and Results

The OKRs can be written in many ways, however the most common method is to define objectives and key results that are the milestones and these milestones outline progress instead of activity. The employees or teams should met those milestones in order to achieve the high-level organizational goals and objectives. The OKRs are great at communicating the goals and required efforts with clear timelines which can help achieving the high-level organizational goals and objectives.

The founder of the OKR framework and former CEO of Intel Corporation, Mr. Andrew Stephen Groveonce said about the OKRs:

“Stressing output is the key to increasing productivity.”

Google is another great example of stressing on the output and stretching the goals to achieve hyper-growth using OKR System. Mr. Larry Page, the co-founder of the Google once said:

“OKRs have helped lead us to 10X growth, many times over.”

When it comes to productivity, the output is what a team or individual does and the outcome is the effect of that output on the overall progress of the business towards their high-level organizational goals and vision. The OKR system can enable super-fast growth and transformation in any business. It support agile performance management and enable businesses to resolve problems and address issues midway. Which significantly reduce the time that is usually required by a traditional performance management system. Hence businesses can rapidly grow and expand while also maximizing their efficiency and performance.

OKR System Produce Better Outcome and Results

 

OKR System Increase Employee Engagements

Studies have shown that only 1/3rd of the employees are truly engaged in their organizations, and improvements in employee engagement could lead to up to 10% to 30% better performance. That is why the employee engagement is very important, it also reduce employee turnover and help businesses retain valuable talent. The OKR system allow employees to actively participate in the planning process of setting up goals and objectives for both the individual employees and the teams. When employees know they are accountable and they also participate in goal setting process, they become more attached and connected to those goals and objectives. When communication is improved and the employees knows their voice will be heard, they feel more connected to the organization, this gives them a sense of purpose and make them more responsible. When the employee know what they are working for and how their efforts will add value, they become more efficient. The OKR System provides a very effective framework which enables managers to easily link the employee performance or their output with the outcomes or high-level organizational goals and objectives. Studies and surveys have revealed that 90% of the employees felt more connected to the organization after implementing OKR System.

OKR System Increase Employee Engagements

OKR System Enables Quick Adjustments and Course Correction

Most of the times managers and employees both feel that they could have done something if they had time. This feeling is common after the traditional performance management cycle. If the performance is evaluated once in a year then only after that you will be able to understand what have gone wrong and where. Mostly smaller things, or easily avoidable problems cause huge damage to the overall performance of the organizations. The OKR system is much more agile and it can make managers more proactive, rather reactive. This is what make it superior from traditional performance management systems. The OKR cycle is usually shorter, the goals and objectives are shot-term but completely aligned with the high-level organizational goals and objectives. Shot-term goals means more frequent performance reviews, the factor that all goals are quantifiable also brings transparency to the system and prevent several other traditional performance management problems. More frequent performance reviews enables managers to quickly take actions and provide guidance to the employees and teams to prevent them from deviating from the original goals. This ensures the high-level goals and objectives remains achievable and all the problems and unexpected situations are addressed with adequate actions and plans.

OKR System Enables Quick Adjustments and Course Correction

OKR Systems are Transparent in Nature

Transparency, biased reviews, favoritism and lack of context are some of the most common reasons of failure of a conventional performance management system. The OKR System is far much transparent, as the goals and objectives are set by the employees and teams so they are more accountable and they feel more responsible in achieving their goals. Furthermore the OKRs of everyone are visible to everyone. This means that every team member knows everyone’s tasks and objectives. This helps specifically when it comes to collaborative tasks, the conventional performance management system lacks this ability. When an objective is not achieved the managers and the employees are in a better position to understand the effects and impact of under-performing team members. Another great advantage of the OKR system is that the employees and teams who will be performing the tasks are setting the goals and objectives. The employees who are performing the tasks are more aware of the problems and obstacles they might be facing, that is why the OKR system always yield better outcome. Unlike traditional performance management system there are only a fewer goals and objectives in the OKRs which keep employees and teams focused on the high-priority tasks which led to high performance and better results.

OKR Systems are Transparent in Nature

Creating OKRs: Best Practices

The purpose of OKR System is to provide better understanding of high-level organizational goals and to ensure the employees and teams will perform well to achieve those goals. Creating such goals and objectives that not only align with the high-level organizational goals but also individual and team development is a very tricky task. In fact inspiring someone is very difficult in itselfit and requires a lot of skills. Most of the time when businesses and organizations adopt OKR Systems the first problem they face is the lack of understanding of the OKRs. The employee could easily get overwhelmed when they have to create goals and objectives that are not only achievable and challenging at the same time but also perfectly aligned with the high-level organizational goals. Here are a few tips to create highly effective OKRs which can truly add value to the high-level organizational goals and objectives:

  1. Simplicity: Keeping it simple is always good, employees and teams should focus on the objectives they can achieve in the given timeframe and with the current resources they have.
  2. Prioritize Objectives: Employees usually caught up thinking they will have to contribute to every department’s objectives. This could drastically reduce the efficiency and performance. The employees and teams should only focus on what is most needed from them.
  3. Make them Specific: It is important that you brainstorm different possibilities to achieve the objectives, develop a specific plan of action to achieve those objectives. Also write how the performance will be measured.
  4. Create Cascaded Objectives: Cascading objectives from organizational point of view to department, then teams and then individual objectives will eliminate all ambiguities and help employees and teams to see how their objectives will contribute to the higher objectives.
  5. Break Goals into Smaller Goals: Create highly specific smaller goals within your key results. This will clarify what exactly the employees and teams will have to do to achieve their objectives and it also keep them more focused and aligned with their and higher goals.
  6. Make it Measurable: The worst scenario is when the employees or managers are not sure if the goal is achieved or not. That is why each key result needs a unit to measure the performance. It doesn’t matter what unit you use but the result should be quantifiable.
  7. Set Stretched Goals: Stretched and ambitious goals are a good motivation. But make sure the goals are achievable and challenging at the same time. Too easy goals and unrealistic goals will demotivate the employees and teams.
  8. Recognize Achievements: It is important to keep encouraging employees and teams during the time period of the key results. Even if the key results are not achieved yet, if a milestone or a smaller goal is achieved, the teams and employees should be admired and encouraged.

Creating OKRs: Best Practices

Never Link OKRs to Compensations

When it comes to OKRs it is a well-known fact that the 100% results are never achieved. It is majorly due to the nature of the goals that are set within the OKR System. As the goals are always stretched and made challenging so only 70% to 80% of the objectives can be achieved. That is why it is never beneficial to link the OKRs with compensations and bonuses. Linking OKRs with the compensations led the employees to only do the needful work to make their metrics and KPIs eligible for the bonuses. This could also led to malpractices in the teams and employees just to meet the minimum required KPIs for the bonuses and it could completely kill the innovation from the system. That is why the OKR System is never linked to bonuses, pay increments and compensations like that.

Never Link OKRs to Compensations

See More: Top 5 Performance Management Trends in 2022 – 2023

Conclusion

The OKRs and agile or continuous performance management (CPMS) are the modernized form of performance management. However, it is important to understand that the OKRs and the performance management are two separate frameworks. The performance management and OKRs can be integrated to leverage the additional benefits of the OKR system that a typical performance management system lacks. That is why the OKRs can be utilized as the gap between the typical performance management system and the modern needs of performance management. The OKRs are also not suitable as a mechanisms to design personal development programs. The OKRs are best at bringing the transparency in the performance management process which help businesses motivate their teams and workforce to perform exceptionally well. The OKRs also gives a sense of ownership, responsibility and help connecting employees with the high-level organizational goals and objectives which is a key to success.

Whether you are using a performance management system and implemented OKRs in it or whether you haven’t used them, a dedicated OKR system software could be a great help to boost your organization’s performance. At RSI Concepts we are helping our customers to bridge the gap between the strategy and execution. Our performance management system comes with in-built dedicated OKR System and it can also be acquired as a standalone software. If you want to learn more about the subject or if you want us to help you improving your existing performance management methods and processes. 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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