Performance Management Cycle Stages

 

Performance management cycle

 Peter Drucker's 1954 book "Management by Objects" is where the idea of the performance management cycle first appeared. According to his book, management needs to divide organizational goals into more manageable, specific goals for each team member and individual.

Michael Armstrong's book "Handbook of Performance Management" contains the most frequently cited performance management cycle. He explained the four phases of a performance review cycle in it. They are review, track, act, and plan. It has been improved over time to meet the demands of the organization's current needs.

A typical performance management cycle has four key stages. Let’s explore them in more detail. 

1-Planning

The planning stage is dedicated to establishing performance expectations with employees. Job descriptions should clearly outline these goals to attract the right candidates.

After hiring the candidate, you need to reconfirm these expectations and set SMART goals and employee performance metrics together.

The employee should be actively involved in the planning process because this increases satisfaction and motivation to improve. Employee performance plans should also be flexible so they can be adjusted for changing objectives and requirements along the way

Both parties will talk about the training and development objectives for the cycle in addition to letting the employees help set their own goals. Establishing a training and development program is essential to demonstrate to staff that you care about their professional and personal development in addition to achieving company objectives.

Planning is therefore an essential step in the performance management cycle; when done correctly, the other phases go smoothly.

2. Monitoring     

The objectives established during the planning stage are closely monitored during the monitoring phase.

Planning and not following up with it is a recipe for failure. Managers and supervisors are to monitor the goals continuously throughout the performance cycle to ensure progress and alignment.

Managers used to follow up once or twice a year, but as we now know, this didn't always work. To guarantee that throughout the performance cycle, the staff members are on track to meet their objectives. To resolve any problems and offer assistance, there must be continuous follow-up and feedback.

When working with highly educated professionals, it's crucial to concentrate on whether the goal is accomplished rather than how. Micromanagement and figuring out how this objective must be accomplished are things a manager should avoid. For monitoring to be effective, good management practices are essential.

Long-term objectives may intimidate staff members rather than inspire them, which is another reason to conduct ongoing monitoring. Supervisors and managers can assist by dividing them into quarterly or monthly objectives. Only with an ongoing feedback system will it be possible to identify issues early and offer sufficient assistance.

3. Developing and Reviewing               

Development plays a vital role in improving performance. As a result of active monitoring, areas of improvement can be identified. The management conducts a review at the end of the cycle. The third cycle should be merely a formality between the manager and employees if the manager or supervisor got along well with the worker in the first two.

This can be accomplished through training and development, as well as through difficult tasks and additional chances for both professional and personal development.

The third performance management cycle is also when the employee can give their perspective on their performance and receive comprehensive feedback from management.

4. Rating and Rewards

At this point, teams and employees receive ratings from management. When employees fail to meet their goals, management should take the proper action. In the other word it is inevitable to rate performance in order to ascertain the value that employees bring to the company.

This is usually done during the employee’s (bi) annual performance appraisal. If an employee consistently performs poorly, they may not be in the proper role or company, and the parties involved should terminate their employment. When an employee performs exceptionally well, they should be commended for their efforts.

This action sends the message that the company values those who put in the work and get results. It also signals to employees that the organization appreciates their input. This last stage of the performance cycle is essential because not acknowledging your employees can demotivate them, and the worst-case scenario leads to resignation. It can also reduce productivity, knowing that management will not reward their efforts.  This can be through giving them praise, a raise, time off, recognition items, a promotion, or all of the above.

After completing a cycle, it’s time to come together again and begin a new one.

Note:

Peter Drucker based the performance management cycle concept on the conventional method of employee appraisal. Businesses can modify it to conform to the emerging idea of ongoing feedback. Because of the structure it offers, it is timeless and guarantees that businesses maximize employee performance.

 

References:

 

Vulpen, E. van (2019). What is the Performance Management Cycle? [online] AIHR. Available at: https://www.aihr.com/blog/performance-management-cycle/.

 

Marr, B. (2021). What is performance management? A super simple explanation for everyone. [online] Bernard Marr. Available at: https://bernardmarr.com/what-is-performance-management-a-super-simple-explanation-for-everyone/.

 

hr.berkeley.edu. (n.d.). Phase I: Planning | People & Culture. [online] Available at: https://hr.berkeley.edu/hr-network/central-guide-managing-hr/managing-hr/managing-successfully/performance-management/planning.