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April 3, 2023

What is Continuous Performance Management? Complete Guide!

Businesses in Dubai and all around the UAE have recognized that the several traditional practices and methods are not effective anymore. The markets have become more fast-paced and the changes are rapid which demands more efficiency and readiness. Businesses also need to optimize their productivity and efficiency in order to increase profitability. The performance management system is the ultimate tool to achieve those goals. Businesses use performance management to maximize the potential and performance of their employees, to encourage them to perform well and prepare them for the coming challenges. The performance management system is a very crucial process which help businesses to improve their human resources, identify problems and find solutions to those problems to maximize the outcome. The performance management system not only help tracking the employee performance but it also help improving the communication between the employees and the managers which is a great way to improve productivity and efficiency. The performance management bridges the gap between the employee and managers and help businesses increase employee retention and loyalty and groom their talent to maximize their contribution.

What is the Difference between Traditional and Continuous Performance Management

Traditionally the performance management was an annual process, or at maximum bi-annual. The employee appraisals and performance discussions were done once in a year or twice in a year and that is it. However, the continuous performance management is designed for more agile businesses to help them deal with the modern people management problems. As name suggests the continuous performance management is a continuous process. Although the goals for both traditional and continuous performance management could be the same but the experience and outcome is totally different. The businesses have realized this and now a day’s more and more businesses are implementing the modern continuous performance management systems. The continuous performance management allow managers to interact with employees more often either by performance management software, survey tools, or one-on-one meetings, and it helps them track their performance more effectively. The continuous performance management not only track performance effectively but it is also more helpful in communicating goals and identifying the problems. That is what makes continuous performance management superior than the traditional performance management.

What is the Continuous Performance Management Process?

The continuous performance management system and process is different from traditional performance management, usually a software tool is used to aid the continuous performance management process. The continuous performance management process is more comprehensive and frequent, that is why a performance management software can make the process more effective and convenient. Here are the basic components of the continuous performance management process:

Regular Check-Ins:The regular check-ins and more frequent feedback is the foundation of the modern continuous performance management system. There is no certain limit of the number of check-in, mostly businesses do monthly and in some cases weekly are also proven to be very effective. The regular check-ins are essential component of the continuous performance management process, although the frequency could be different from case to case.
360 Degree and 720 Degree Feedbacks:Traditionally the managers were the only one to give feedback to employees, however, that is not enough and businesses have developed a more detailed feedback collection method which includes more sources than just the manager such as supervisors, managers, peers, subordinates, cross-departmental colleagues, and even customers, suppliers and any other stakeholders. For that the 360 degree feedback method is used. The 720 degree feedback is simply a 360 degree feedback conducted twice, the first round help building employee development program and the second round will help to understand the positive or negative impact of the program on employees.
Evolving Goals and Objectives:The continuous performance management process includes regular check-ins but those check-ins can only be beneficial if the managers and employees focus on a few aspects such as employee’s current progress with comparison to their goals and objectives, identifying their problems and needs which could have impact on their goals. The personal development aspect of the performance management is very important for the employees, the evolving goals and objectives can help both managers and the employees to set goals and objectives, making changes or tweaking existing goals and objectives, and also making a plan of action for the future based on that check-in.
Real-time Performance Data and Reports:Every performance management process is incomplete without generating performance data and making reports. The continuous performance management process provides businesses with real-time performance data, regular and customized reports on employee performance, performance trends, teams’ performance and everything in between. These reports help managers understand the strengths and weaknesses of their employees and teams and also help them identify and rectify the problems that are harming the performance.

The continuous performance management system is a great tool to maximize the performance of the organization and also increase employee satisfaction by offering them effective personal development programs, including their voice in the decision making processes, help resolving them their problems and much more.

What are the Benefits of Continuous Performance Management System?

The continuous performance management is slowly taking over the traditional performance management processes. The famous Adobe and then Accenture shifted from traditional performance management to continuous performance management systems and have witnessed great increase in their productivity and efficiency. Here are some key benefits of the performance management system:

Increased Adoptability:The continuous performance management system help businesses to quickly identify the needs for training or career development opportunities whichprevents any competencies or skills gap which can hinder the organization’s performance and productivity.
Make Feedback More Effective:The continuous performance management system provides regular feedbacks to the employees, the employee concerns are addressed immediately, the poor performance is identified quickly, the course correction is done regularly, and employees can easily communicate with their managers which makes feedback more actionable and effective for the employees.
Improve Corporate Culture: The continuous performance management system encourages regular and more frequent discussions and feedbacks which help both employees and managers to improve themselves, the employees will get a better sense of what is expected from them and the managers can become a better mentor and guide which will result in a more productive and improved corporate culture.
Increase Employee Engagements: The continuous performance management process frequently and regularly engage employees and managers in discussions and feedback sessions, which help increasing employee engagement, raise their interest and trust, and also help managers communicate the goals and objectives more clearly, these all help improving morale and increase employee performance and efficiency.
Effective Goal Setting Mechanisms: The continuous performance management process or any modern performance management system offer features to increase the effectiveness of goals and their impact on employee performance. The managers can easily set SMART goals, OKRs and configure KPIs to effectively communication and monitor the goals and performance.
High Quality Performance Data: The managers usually rely on direct feedback discussions or line of reporting. However, the continuous performance management system makes feedback more objective. It provides accurate performance metrics, and offer intuitive performance dashboard to provide a more in-depth performance analysis and highly quality performance data which help improving the accuracy and efficacy of the managers’ decisions.

These are just the few key benefits of implementing a continuous performance management system. It is important to understand that the performance management software should also be able to support the process you want to implement. The businesses in Dubai and all around the UAE have also realized the importance of continuous performance management and its benefits, which is why since past few years the entire country is rapidly adopting to modern performance management processes.

Conclusion

The continuous performance management is far superior then the traditional annual performance management processes. A powerful performance management software is used to streamline the continuous performance management process. Furthermore the continuous performance management process is not only more frequent but it offer real-time performance data and monitoring capabilities which can significantly increase the vision and understanding of the managers and help them take the right decisions at the right time. Another great benefits of continuous performance management system is that it is much more transparent and accurate than the traditional performance management system. It doesn’t have many flaws that are inherent in the traditional performance management process. The digital aspect of the system also help HR to automate several processes which reduce their workload and improve the efficiency.In this blog we have discussed the continuous performance management system and its key benefits. If you want to learn more about the subject or if you want us to help your organization implement a bespoke tailor-made highly cost-effective continuous performance management system, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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April 15, 2021April 18, 2021

Employee Performance Management is a small part of Performance Management System

Employee performance management is basically a small part of a performance management system. Most often business does not differentiate between both. In reality, employee performance management is just a module of a very large scale performance management system that measures the KPIs of the entire organization or enterprise. The performance management system not only includes an employee performance management module but it includes a lot many other modules that when put together forms an enterprise performance management system. For example, the performance management system includes the performance of the supply chain, production units, marketing, sales, customer support, customer retention, leads and conversions, revenue and finance, operations, IT and infrastructure, transport and everything else which is a part of the enterprise. However, the employee performance management module only measure and monitor the performance of the employees.

Here are the details of the two tools:

1. Employee Performance Management

The main objectives of employee performance management are to understand the efficiency of the employees, which could be further narrow down to their job roles, projects, behaviour, and much more. There are different KPIs (key performance indicators) that are used to monitor and measure the performance of an employee, team/group, and department. These KPIs will help the business in taking employees related decisions such as promotion, compensations, bonuses, personal development, career development, transfers, and termination. The best approach is to set clear and discrete expectations and goals and then measure the performance and achievements against those expectations. Employee performance management is a part of the enterprise performance management system which is connected with a lot many other enterprise systems and organizational tools to collect data and feedback, then all the inputs are carefully analyzed through a very powerful software engine and at the end, the reports are being generated which are very clear and realistic measurements of the performance of an employee. On the basis of these reports and data, the management can easily take vital decision to improve their overall efficiency and output. The only right person for the right job will be able to produce desired results.

An effective employee performance management includes the followings:

Goals and Expectations

The performance should be measured by the achievements and accomplishments of the employees and the achievements are weighed against the goals. The goals are set as per the expectations, and the expectations are based on the employee role, experience and skills or education. This is how KPI management works. You analyze and weigh the employee then set up expectations and KPIs to measure their performance. The goals and expectations related to KPIs are in fact a set of multiple KPIs:

Project Goals

These goals and related KPIs are based on the employee performance in different projects which are being measured and monitored for a year. There could be multiple projects in a single year or a single project could also last for multiple years.

Job Role/Description

These goals are based on the job description or title of the employee. Obviously, the goals and KPIs of a crane operator will be different from a construction supervisor. So each job role and title have their own objectives, contributions and expectations depending solely on their job role/description.

Response to Challenges

This often knows as stretched goals too. These are the goals and expectations set for unusual or challenging conditions and scenarios. The measurements are taken of how well or bad the employee respond or act in challenging conditions on the basis of the outcome of their actions.

Behavioural Expectations

These are the expectations of the enterprise from an employee towards the people, assets and resources around them or under their command. For example, how an employee behaves to their colleagues, subordinates, team lead, manager, supervisor, etc. The behavioural goals also include KPIs that provide data about “how” a goal can be achieved through a particular employee.

Monitoring and Performance KPIs Measurement

Once the goals are set, then there is a need to establish a system of KPIs that can measure the performance of the employee toward the set goals and the expectations from them. The performance management includes a complete review of employee performance in all relevant topics. Along with various KPIs, a continuous feedback process is established and the monitoring process is also continuous or for a particular employee review cycle. In most cases the monitoring and the KPIs measurement is continuous. The management notes down those indicators and held regular dialogues between the employee and their manager to keep improving the outcome for the rest of the review cycle. The dialogue should be two-way communication in which the employee should also be allowed to express their concerns, needs and opinions. Then the organizations can take accurate steps to boost the employee’s performance.

No matter what format or type of the review methodology has been used, the reviewer must have a very clear understanding of each stage of the review and the parameters they are evaluating an employee against. There are so many different approaches and methodologies that are very commonly used in Dubai, UAE and each one of them have some advantages and some drawbacks too. Hence, the performance should be measured on various scales to get a definitive answer.

Multi-source Feedback or 360 Feedback

This is the most popular review method. Not only in Dubai, UAE but all over the world enterprises and organizations are using this method to measure employee performance. It includes feedback from the supervisor, manager, co-workers, subordinates and people around the employees. The objective of this feedback to understand the employee behaviour towards work and its impact on his performance and others’ performance or work too.

Management by Objectives

Management by Objective or also known as the MBO KPI is the process of evaluating the performance of an employee towards the individual goals and their contribution to the team, departmental and overall organizational goals. Usually, the MBO is for managers, team leads, supervisors, project coordinators and people with non-routine jobs.

Ranking Scale

The ranking scale is basically a process of distributing or putting employees in a discrete set or sub-set on the basis of their performance. Although ranking a group of employees or teams is very easy but the results are not so accurate. However, ranking individual employees in a certain group could be difficult as there would be a lot of different levels and the differentiation between those levels would be narrow to get meaningful results.

Competency Scale

The competency scale measures the performance of the employee for different routine tasks based on their job role/description. As the goals and expectations are set for each job role, so the KPIs can be set easily and accurate data can be collected by measuring the employee performance in their routine tasks and job responsibilities.

Employee Capacity/Productivity

Employee Capacity or Productivity is not a very linear KPI, the result of this scale are usually used to distribute the workload in different employees, teams and/or larger groups. This KPI help understanding which employee is working on their maximum output level and which employee can handle some more work.

Employee Billable Percentage

The employee billable percentage KPI is also known as utilization rate, this process measures the billable and non-billable work hours required or been taken for a particular task. This could be a great help in determining the internal cost of a particular project and also the performance of the employees/teams.

Graphic Rating Scale

This scale is basically a set of various KPIs such as attendance, quality of work, the number of tasks against a given period of time, dependability and also behavioural KPIs. These KPIs are easy to set and the data collected is highly accurate.

Revenue and Profit per Employee

These are very basic and very important KPIs to measure the overall employees’ performance. For the employees the measurement is simple, total revenue or profit divided by the number of employees. It is critical to understand what your employees are bringing in. Both KPIsindicate to the organizations and enterprises that what their workforce is costing them and how much revenue and profit they are generating.

These are some of the very basic KPIs used to measure employee performance. There are literally thousands of KPIs which are available and can be used. Only after a careful examination and understanding of both the ‘Goals’ and ‘KPIs’ businesses should choose the KPIs that completely align with their objectives. There are a lot many other factors that can cause errors or inaccurate assessment such as insufficient data collection, favouritism, lack of differentiation or intertwined KPIs, and many more. So, it is always wise to seek the help of professional Employee Performance Management Solution providers, such as RSI Concepts.

2. Performance Management System

The Performance Management System also referred to as Corporate or Enterprise Performance Management System is a system that measures and manages the performance of the entire business or enterprise. It includes the performance management of all departments, employees, key players, and key factors that contributes to the overall performance of a business. All the data has been collected from various KPIs, processes, matrices, methodologies and tools is gathered and analyzed in a Performance Management System. The goals, objectives and expectations are being set for not only individuals but for teams, departments, production units, sales and marketing campaigns and much more. The operational cost and performance, the effectiveness of the entire infrastructure of the enterprise such as the technology, human resource, supply chain, resources, revenues, cost, profits and everything in between is closely monitored and measured under the umbrella of the performance management system. The Performance Management System in itself is a very huge system and cover a lot of topics that is why we will only list some important KPIs that are used to determine the performance of an entire business, corporation or enterprise:

Financial KPIs: Financial KPIs include revenue, cost, profit, internal costs, raw material costs, cost of the product or services sold, sales, sales for a particular product/service category, cost of resources and raw materials, operational cost, per employee cost and return and so on.
Employee KPIs: Employee KPIs include all the above-mentioned indicators which help business understand the cost, profit, gains and performance of the individual employees as well as of team and departments.
Marketing KPIs: Marketing KPIs include marketing campaigns, cost, return, leads, quality of leads, sales as the result of a particular marketing campaign and all details to assess and review the performance of the marketing department.
HR KPIs: HR KPIs include the performance of the HR department, staff and services, employee turnover rate, employee satisfaction, and recruitment performance. These KPI also include the indicators of expenses and returns and overall performance of the HR department.
Customer KPIs: Customer KPIs include a number of happy and unhappy customers, returning customers, customer churn rate, new customers, customer lifetime, customer acquisition cost, and customer support and so on.

These are just a few major KPIs used to assess the performance of an entire enterprise or corporation via a Performance Management System. There are a lot more KPIs that are used to further narrow down various variables to closely monitor and measure the performance of various factors which when concluded represent the overall performance of an entire enterprise.

See More: How a KPI Software can help provide better Customer Journey?

Conclusion

Businesses most often confuse Employee Performance Management with the Performance Management System. Employee performance management is just a small module of a performance management system. The Performance Management System measures various indicators which starts from the lowest level which is individual employee’s performance and ends at the overall performance assessment of the entire business or enterprise. Business and enterprises invest heavily in order to ensure their growth. These investments include all sort of technological solutions, infrastructure, human resource, employee development and training, customer retention programs, marketing and a lot more. It is very important to closely monitor each and everything to understand whether your efforts are in the right direction or not. Another important thing is to ensure your employees and customers are happy and your employees and other elements are working on their maximum potential to ensure the low operational cost of the business and maximum profit.

RSI Concepts is a well-reputed brand in providing performance management systems, KPI and OKR management solutions. If you need to know more, or if you are interested in a quote, feel free to reach us out through our Contact Us page.

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