Tag: Effective performance management system

No matter what your business goals are, effective performance management process is absolutely necessary for any business to sustain and grow. The primary objective of performance management is to maximize the employee performance which drive productivity and profitability. In the modern business landscape, where the competition is tougher, the customers’ demands are skyrocketing, and hiring skillful staff is becoming more difficult, the performance management have become crucial for the business. Here in Dubai and all around the UAE, businesses tend to follow traditional performance management methods. A PMS or performance management system/software provides a modern and highly advanced framework to track, monitor and improve performance of the business. Another great advantage of the performance management is that it make businesses agile, responsive and help them deal with the rapid changes in the market and customer trends. The performance management system help businesses effectively build top-level objectives and goals and implement strategies to scale them down up to individual goals and daily tasks of the employees. This align each and every individual employee with the high-level organizational goals and objectives and ensures progress in the right direction.

What is PMS?

PMS or performance management system is usually referred to a software application which help organizations to implement various performance management processes and strategies. The manual performance management requires a lot of resources and it is time consuming, however, when done with the help of a PMS it become simpler, easier, and more impactful. Usually the manual performance management processes have annual appraisal or sometimes biannual evaluation, however, the performance management system (PMS) enable businesses to monitor and manage performance in real-time, it collects data in real-time rather once or twice a year, which make it more impactful. The PMS is also referred to as performance management software, basically it is a software exclusively designed for the performance management processes. The biggest advantage of using a PMS is that it can automatically collect performance data, monitor KPIs, and it also help streamlining the reviews and other appraisal processes. The digitalization and automation reduce the effort and make process more convenient and impactful. The managers get more visibility with the real-time performance data which enable them to take actions in time to maximize the outcome for the performance cycle.

The managers can view all the performance data such as Balanced Score Cards, KPIs, Reviews & Ratings, BARS data, and other performance matrices at a single dashboard. There are penalty of in-built analytical tools which allow managers to perform several analysis with just a few clicks. The intuitive UIs and simplicity of the system makes it a perfect tool for performance management needs. Furthermore it capture the data in real-time and it is also capable of performing several automated analysis, which allow management to set triggers for alerts and notifications. Every user dashboard gets real-time updates, so the managers can get the very recent performance data which help them understand the current performance, progress and it also help them easily identify the obstacles and areas of improvement. Hence the managers can take decisions in real-time and do course corrections instantly. This also help them rectify the problems and boost the performance of the employees for the performance cycle.

That is the reason the modern performance management is incomplete with a highly efficient technological solution. The PMS or performance management system or performance management software is exclusively designed for the businesses to maximize its impact and to increase the convenience. The PMS supports almost all modern performance management processes and methods. Here are some of the most important and commonly used performance management processes in Dubai and all around the UAE.

The Pain Points of Traditional Performance Management Process without PMS

The markets have changed drastically in past decade, the businesses have to adopt to new practices and modern processes in order to keep up with the pace. The modern business environment is continuously evolving, the customer behavior and the employee behavior is also changing. This left traditional decades old performance management processes ineffective and prone to errors and mistakes. Businesses, large enterprises, government sector and private sector in Dubai and all across UAE have realized that the modern problems require modern solutions. The PMS or Performance Management System/Software help such businesses and organizations to leverage the technology to improve their performance management processes. Here are a few notable pain points of a traditional performance management methods that can be avoided with the modern performance management processes through a PMS:

1. Course Correction: The traditional performance management processes such as annual or biannual evaluation doesn’t give enough time to the employees to do course correction. The PMS on the other hand ensure real-time monitoring and performance evaluation, the managers can instantly understand if an employee is deviating.
2. Rating Mechanisms:The traditional performance management processes have poor rating mechanisms, which led both employees and the managers to not trust the rating process. The PMS makes monitoring simple, effective and highly accurate with modern KPIs and performance tracking mechanisms.
3. Transparency: The traditional performance appraisal processes lack transparency, due to no check and balance on the employee’s actual performance and heavily rely on the reviewer’s point of view. The PMS resolve this problem effectively and provides a framework to monitor the performance and it also provides universal rules and criteria to measure the performance.
4. Goals and Objectives:The traditional performance management processes lack ability to set achievable but challenging goals for the employees. The PMS allow businesses to setup effective goals and objectives on the bases of the employee capabilities, strengths and also ensures the employee’sgoalsand objectives align with the high-level organizational goals and objectives.
5. Employee Engagement:The traditional performance management processes lack adequate employee engagement which make them less productive and in some cases counter-productive. The PMS encourages more frequent discussion, reviews, feedbacks and evaluation which encourages both employees and managers to improve communication and engagements.

The modern performance management with PMS (Performance Management System/Software) help businesses avoid all of the above. The ability to digitalize the performance management process and automated data collection allow businesses to effectively execute their performance management strategies to achieve their high-level organizational goals and objectives.

PMS Helps Setting up Goals and Objectives

Setting up goals and objectives is one of the most important and crucial aspect of performance management process. PMS help business set up realistic goals and strategic objectives and scale them down to individual employee. This help businesses align all the resources with the high-level organizational goals and objectives. The goals and objectives are basically the criteria to measure the performance of employees, teams, departments, managers, and the overall business. Here are the three most common types of goals:

• Purpose Oriented Goals: These goals define what performance target or success will mean for each individual employee, hence key performance indicators are set accordingly. The purpose oriented goals are monitored continuously. For example keeping customer happiness and satisfaction equal or above 80%.
• Project Based Goals:These goals are set for a precise outcome of a particular project along with the timeline. These goals are set for the individual employees as well as for the project teams/departments. For example, the IT team should be able to launch new mobile applications within 3 months.
• Employee Personal Development: The employee personal development or professional growth oriented goals define the performance level an employee needs to outgrow itself. Majorly these goals require employees to learn new skills & abilities and acquire new knowledge.

The goal is a long term achievement, however the objective is a short term measureable action/outcome required to achieve a goal. It is important that these goals & objectives are clearly communicated to the employees so they can set target for their performance and try to outperform themselves in the next phase. That is how the performance can be improved and optimized gradually over the time.

PMS Helps Implementing SMART Framework

SMART Framework is a modernized method to set up goals and objectives. The SMART goals tend to produce maximum results. The SMART is acronym, it stands for:

• SMART – Specific: The goals should be clear, understandable and must point to a particular outcome.
• SMART – Measurable: The goal should be able to produce the measurable data that can be tracked in order to measure the performance and progress.
• SMART – Achievable:The goals should be achievable, mostly businesses aim too high, which results in demotivating the employees when they know they can’t achieve them.
• SMART – Realistic/Relevant: The goals should be realistic and relevant to the employees and teams, so they can achieve them.
• SMART – Time-bound:Each goal should be time-bound with a clear start and end date, so the employees know when they will be evaluated and in what time they will have to achieve them.

When employees get SMART goals they can focus on a certain thing and improve their professional and intellectual skills. Most of the time when the goals are not set properly the employees doesn’t feel growing, they are performing their tasks aimlessly, and when they look back they think they have achieved nothing. This results in employee turnover which is another factor that impact the performance of a team, department or sometime the entire organization. When employees start achieving their goals which also add value to their experience, skills and capabilities, they got motivated and try to perform better.

PMS Streamlines Performance Review Process

The employees always have concerns about the performance reviews, there are several surveys and studies which suggested that the manual performance reviews are not a good criteria to measure the performance of an employee. The manual reviews could be biased and the reviewer usually only consider the most recent performance or incidents to measure the performance of the entire year. Which is never accurate. The transparency and accuracy are some of the major causes that large enterprises have started ditching the traditional performance management and review processes since 2010. Here in UAE businesses have just started adopting PMS (Performance Management System/Software) that is why it is relatively easier for the market to embrace the change. Earlier it was just the large enterprises, organizations, government entities and multinational who had an effective performance management system in place, however, now a days, medium and small sized enterprises and private sector too is rapidly adopting performance management processes to maximize the performance and to gain a better competitive advantage.

Although the traditional performance review processes are failing, but that doesn’t mean the performance reviews are ineffective. In fact the performance reviews can help maximizing the performance by providing valuable feedback to the managers and the employees which help them boost performance and employee engagements. If done correctly with a proper performance management system the performance reviews can help businesses bridging the communication gap between the managers and the employees, it brings more transparency and produce highly accurate performance data. The main objective behind implementing a digital PMS (Performance Management System) is to improve the employee performance review process to promote constructive criticism and acknowledge the achievements of the employees. When employees are rewarded or acknowledged about their good performance and the areas of improvement are highlighted to them, they tend to get motivated to perform better. This way the employees start focusing more on their weaknesses and tend to put efforts to upgrade their skills, knowledge and even behavior.

Highly Effective 360 Degree Feedback and Reviews with PMS

The 360 degree feedback is one of the most important aspect of performance management. It is a modern method help boosting the performance by increasing employee engagement, motivation and by identifying the problems and obstacles which can impact the performance. The 360 degree feedback is a multi-dimensional feedback mainly collected from the managers, peers, customers, sub-ordinates, stakeholders and any other concerned person or manager. This provide a 360 degree view of an employee’s performance from multiple sources which reduce the inaccuracy and maximize the transparency. There are five major components of this performance management process:

1. Managerial Feedback: The feedback and reviews from managers are the traditional method of performance management process. This review included feedback from the supervisor or manager, and it can also include feedback from line-managers or higher management.
2. Peer to Peer Reviews: The coworkers can provide a very unique and precise prospective to the employee performance. More importantly the peer to peer reviews are a great process to evaluate the ability of an employee to perform in a team.
3. Customer Reviews:The customer’s reviews help businesses understand the performance and behavior of customer facing employees. The customer reviews could be taken from internal and external customers, stakeholders and any other relevant person who interacts with the employee.
4. Subordinate Feedback:The upward feedback and reviews are not common in traditional performance management processes however, they are critically important. It help evaluating and improving the performance of the supervisors, managers and senior staff.
5. Self-Appraisals: The self-appraisals are when employees review their own performance. The PMS provide a structured feedback mechanism that let employees look back at their performance and rate it. Usually the self-appraisals are biased, but they allow employees to see their strengths and weaknesses.

The 360 Degree Feedbacks and Reviews are a great process to increase employee engagement and awareness. The employees can easily learn what is expected from them and how did they performed and what impact their performance have on the stakeholders. Furthermore the 360 Degree Feedback and Reviews serves as a bedrock for the training, counselling, and employee development processes. The PMS itself encourages employee engagement but the 360 Degree Feedback and Reviews are the best method to boost employee engagement. Employee engagement motivates them to perform better.

Implement Management by Objectives (MBO) Process with PMS

TheManagement by Objectives or MBO is one of the modern performance management process. The PMS enable managers and employees to make plans, set objectives, performance matrices and everything for the upcoming appraisal period. After setting up clear goals and objectives that align with the high-level organizational goals, the manager and the employees have multiple discussions or feedbacks to understand the ongoing progress. After that the manager and employees can readjust their performance goals and objectives to make sure they remain aligned with the high-level organizational goals and objectives, this is also called course correction. Furthermore the Management by Objectives (MBO) process allow the managers to constantly improve the performance and resolve any issues or problems that employees are facing to rectify them in time. This kind of performance management have higher success rate. The Management by Objectives (MBO) also increase employee engagement and raise their level of trust on the managers as well as on the employer.

The management by objectives or MBO is one of the best way to align the individual goals with the high-level organizational goals. The goals are set under the SMART framework so the success is rewarded and the failure is dealt as per the company policy, usually by more training and counseling or transfer, etc. The Management by Objectives (MBO) can be easily implemented all across the entire organization with the help of a PMS. This ensures the higher levels of success. When employees also got involved in the decision making process such as goal setting, evaluation, etc. they feel more emotionally connected to those goals and objectives. This raise their morale and motivates them to perform better. On top of that the frequent assessment also ensures the employees remain on track throughout the entire performance appraisal period which also amplify the success rate. The MBO is also a great process to maximize the communication and provider maximum understanding of the goals and objectives to the employees and it also tells them what is to be expected from them and how they should do it in order to achieve the goals. That is why MBO has higher success rate.

PMS Improves Behaviorally Anchored Rating Scales (BARS) Process

The BARS of behaviorally anchored rating scale is a very common performance management process. The management set behavior examples, and anchor them to a numeric or measureable value/rating scale. This allow businesses and organizations to effectively measure both quantitative and qualitative aspects of the performance. However, most of the performance management processes only focus on the quantitative aspects of the performance. The BARS or behaviorally anchored rating scale is linked with multiple BARS statements that are according to a specific behavior which employee exhibit during a certain situation. These BARS statements act as a measuring tape to measure the performance of the employees. Several market studies suggest that the behaviorally anchored rating is extremely important for the overall performance management. Usually the employee behavior can have 40% share in the overall performance and the rest 60% is their technical competencies and professional skills. Each employee is evaluated against the standard associated to their job role.

The behaviorally anchored rating scale statements are refined several times to set standards for expected behavior against every job role. The BARS is a very effective process to clearly explain and communicate the requirements from each employee. When employees clearly knows what is expected from them, they tend to perform better to achieve their individual goals. The behaviorally anchored rating scale is not like other rating mechanisms, in fact it starts from 5 up till 9, where 5 represents the worst performance, 7 moderate and 9 best performance. Another great advantage of the behaviorally anchored rating scale (BARS) is that it have different statements and rating mechanisms for different job roles, rather a universal rating or evaluation process. This can significantly increase the accuracy and effectiveness of the performance management process. The employees know exactly where they will have to improve their performance and what is expected from them in the next performance cycle. The only drawback of the BARS is that it require a lot of time and effort from the managers and executive administration.

PMS Allow Creating Precise KPIs to Improve the Monitoring Mechanisms

The PMS or performance management system/software is a digital tool, it has capability to integrate with any other third-party software, tool or database. Which enable businesses to effectively create KPIs or key performance indicators for each and individual employees, teams, managers, departments, and even for the entire organization. The KPIs allow the businesses to monitor the performance against strategic and high-level organizational goals and objectives. The KPIs enable businesses to implement a more effective data driven performance management process. The KPI also link the organizational goals and objectives with the individual action. The PMS or performance management system/software allow businesses to set up KPIs in a cascade format where the move from level to level until reached at the individual level. This approach is top-down and often also called pyramid KPIs structure. The SMART Framework works on KPIs too, each KPI should be specific, measurable, attainable, relevant and time-bound. The PMS allow businesses to effectively create KPIs either by customization or using the in-built templates.

The KPIs can significantly boost performance by providing real-time monitoring capabilities. Furthermore the KPIs also help managers to explain employees about their goals and how their performance should be evaluated, this help them perform better.

Conclusion

The traditional performance management processes have proven to become ineffective in the modern business environments. Now a days’ businesses in Dubai and all around the UAE require a highly advanced technological solution for their performance management processes. The performance management system/software or PMS is a software tool that enable businesses to perform performance management tasks in a more intuitive and effective way. Rectify all pain points of the traditional performance management methods and allow businesses to include innovative and customized features to their performance management system. Moreover the PMS allow businesses to implement the modern performance management processes and methods to maximize the outcome of the performance management cycle. The PMS provide dedicated user dashboards for the employees, supervisors, line managers, senior managers, high-level management and stakeholders who can monitor and track performance of the individual employee, team, project, department or the entire enterprise at their dashboards.

The PMS ensures the management get a comprehensive view of the entire organization and each and every single resource. This provide them a better control over the progress and also enable managers to do course correction, make adjustments to ensure the high-level organizational goal is achieved at the end of the performance cycle. In this blog we have listed only a few advantages of the PMS or performance management system/software to provide our audience an overview of how the PMS can meet the performance management needs of the modern businesses. If you want to learn more or if you want us to help you building a modernized, intuitive and cost-efficient performance management system please 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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