Businesses have many challenges in managing workforce, the performance management and the employee engagements are the two most crucial aspects. Employee engagement directly impact business success, engaged employees tend to be more productive, loyal and motivated. That is why any modern performance management system is incomplete without incorporating best employee engagement practices. Traditionally performance management focuses on setting up goals and achieving them, and the employee engagement on the other hand, focuses on fostering a positive and friendly work environment.
That is the reason the performance management and employee engagement are not only intertwined but interlinked also and for business success managers need to focus on both. The employee engagement not only have positive impact on overall performance of the organization, but it also elevates customer experience, product/service quality, and employee turnover. A motivated workforce is a key to success in today’s rapidly evolving business landscape. If your employees are motivated they tend to produce better outcomes in any unconventional condition.
Studies showed that the employee engagement is declining since past few years, and businesses operating in Dubai, Abu Dhabi, Sharjah and other regions of UAE also felt that. This fueled the rapid adaptation of modern digital performance management system and practices. In this blog we will discuss how a modern digital performance management system can completely transform the employee performance management and employee engagement processes. Moreover a customized solution can be a great help in linking performance management with business outcomes which boosts productivity and profitability.
See Also: Performance Management System: Best Practices
What is a Modern Performance Management System?
A performance management system is a well-structured process to assess, evaluate and improve employee performance and the quality of the outcome produced by these employees. A modern performance management system just does the same with an addition of implementing a software solution which empower and improve each and every aspect of your performance management system. The modern performance management system is not limited to annual reviews and appraisals. It can vary in terms of complexity, design and features, but at its core it is a continuous process which includes continuously providing guidance, support and encouragement to employees, ensuring they stay on track and eliminating the obstacles which are or could compromise performance.
Businesses can design a tailormade performance management system as per their diverse and exclusive business needs. This is what makes custom performance management system more effective. A modern digital performance management system offer comprehensive tools and methodologies that continuously optimize employee performance throughout the year. Whether it is feedback, reviews, one-on-one meetings, performance evaluation, course correction or appreciation, the modern performance management system operates throughout the entire year.
Beyond only monitoring and improving efficiency the modern performance management system provides well-organized framework for employee growth and development, which is essential for trust building. With a modern performance management system both employees and management knows where they stand and do collaborative and constructive efforts to elevate overall organizational performance.
See Also: Employee Performance Management Process with PMS
Why Employee Engagement is Crucial for Business Success?
Businesses who implement employee engagement initiatives tend to perform much better than the business who still follow the traditional and outdated performance management practices. For example, continuous feedback loops, regular employee-manager interaction, including employee say in crucial internal processes and decision related to performance management, etc. All these help engaging employees, and give them a sense of importance and value. This sentiment is crucial for motivation and help HR and mentors to effectively boost operational performance and profitability. According to studies, engaged employees tend to be around 17% more productive and 21% more profitable than disengaged employees.
It is because the disengaged employees are demotivated and tend to be less efficient. Moreover the employee turnover is also greatly impacted by employee engagements, an engaged employee is 87% more likely to stay in the organization. Employee retention is one of the biggest challenge in modern performance management. Employees tend to leave for better opportunities, if you offer them great working environment, a positive organizational culture and keep them engaged, they are most likely to stay even if offered higher salaries and perks. That is why employee engagement is very crucial for businesses.
Furthermore the engaged employees has a sense of ownership and pride in their work, which fuels the innovation. The engaged employees are always the ones who came up with innovative solutions, creative ideas and tend to be more aligned with high-level organizational goals. A digital performance management system offer advanced tools for enhancing employee engagement.
See Also: Choosing a Performance Management System A Buyer’s Guide
How a Modern Performance Management System Increases Employee Engagement?
A modern performance management system offers advanced tools and intuitive dashboards for both management and the employees. This help businesses effectively implement their performance management strategies and polices, which resultantly amplify the impact of performance management and employee engagement processes. The modern performance management system greatly improve the following aspects to increase employee engagements:
Setting Clear and Realistic Goals Increase Employee Engagements
The modern performance management system digitalize the performance management process and various HR activities which drive efficiency. Moreover the performance management system can automate a variety of relevant processes which help improving the entire performance management process. Setting up goals, is one of the most fundamental and crucial aspect of performance management. The high-level organizational goals and strategic objectives are driven by organization’s vision, these are then channeled down to different business functions, departments, teams and till individual employee.
See Also: How the HR should select a Performance Management System?
The goals and objective give directions to employees and tell them what organization is expecting from them and how employees can succeed in achieving their goals. The modern performance management system provides tools, frameworks and methods to establish SMART Goals by collective and collaborative efforts. The SMART Goals is a complete goal setting framework which means Specific, Measurable, Achievable, Realistic/Relevant, Time-bound. Here are a few things to consider while creating employee goals:
- Break down large strategic objective or project into smaller, manageable and achievable tasks
- Set realistic deadline to achieve those tasks, the accountability is a very important driver
- Implement periodic/continuous monitoring policy, review and course correction for better results
- Encourage employee feedback and suggestions in goal setting and relevant decisions
- Critically analyze and enlist potential obstacles, short comings, disruptions and their solutions
Implementing SMART Goal setting framework and sensible strategy can greatly improve the success rate, it also gives employee clear understanding of their progress and build a sense of motivation and achievement. When employees successfully achieve small goals and milestones, it build a sense of success and increase their momentum to deal with bigger challenges. The sense of success, progress and achievement is a very powerful driver it keeps employee motivated, engaged and invested in their work.
See Also: The Future of Performance Appraisals: 6 Innovations and Changes [Quick Guide]
Continuous Feedback, Guidance and Positive Criticism Keep Employees Engaged and Motivated
The traditional performance management systems lacks seriously on their annual review practice. The modern and digital performance management systems on the other hand offer a continuous monitoring and review mechanisms which help businesses adopt and implement continuous performance management strategies. The employee can get regular feedbacks, guidance from managers, and they can also share their concerns to rectify the issues and to remove the obstacles that are or can hinder the performance. The regular interaction with supervisors, managers and mentors help employees critically evaluate their performance and enable them to make real-time adjustments in their performance. This is also vital for aligning employees with their and high-level strategic goals and objectives.
- Timely Feedback Means Timely Actions: When the employees gets regular feedbacks, they have plenty of time to make adjustments and to improve their work instead of waiting for months for the reviews, which not only demotivate employees but also cause more damage to their performance and progress.
- Encourage Growth and Improvements: Whether it is professional competency or behavioral competency, continuous feedback help employees identify their areas of improvement and also provide them guidance to make improvement. These improvements results in rapid growth and put employees in right direction, helping them to choose the right career path forward.
The regular feedbacks also foster confidence and trust. When the employee see their progress and achievements are noticed, their problems are proactively addressed, they tend to be more engaged and motivated. Regular inputs from managers build a sense of importance and value, it tells employee that the managers are committed to their success and growth which is vital for employee retention.
See Also: What are the Features of a Best Performance Management System?
Rewards and Recognition Engage Employees and Foster a Productive Work Environment
Rewards and Recognitions plays a crucial role boosting morale and improving performance. In fact these are some of the most powerful motivators. When employees’ accomplishments are acknowledged they feel a sense of value and pride which not only motivates them but also other employees to perform well in future. When the employees are appreciated they are more likely to work with more commitment, responsibly and with higher dedication.
Businesses operating in Dubai, Abu Dhabi, Sharjah and other regions of UAE always struggle with high turnover, a well-thought reward and recognition strategy could not only help attracting top talent but it will also be very helpful in retaining experienced workforce.
See Also: 5 Performance Management Problems and How to Solve Them
Appropriate rewards and appreciations help in:
- Boosting Morale: Recognizing employee’s achievements, hard work, and efforts not raise job satisfaction but also boost their morale, which keeps them motivated for higher productivity.
- Motivation for Others: When high-performing employees are recognized and rewarded, it also motivates others to strive for excellence.
- Reduce Turnover: Reducing employee turnover is crucial for any business’s success, rewards and recognitions are two most impactful factors to keep employees satisfied and loyal.
A good performance management system not only help businesses build effective reward and recognition strategies but it also help them evaluating the impact of these strategies which is an excellent feature to make improvements in future. Some proven reward and recognition strategies are:
- Tangible Rewards: The tangible rewards can be offering merchandises, gift vouchers, movie tickets, meals, cash bonuses, and such things can be a great motivator for higher performance.
- Intangible Rewards: Non-material rewards can boost morale and drive high performance such as, additional vocations, flexible work hours, opportunities for personal development, etc.
- Social and Public Recognitions: Recognizing employee’s achievements publicly such as in meetings, company-wide email notification, or at social media can be a great motivator.
- Personalized and Private: Customizing the recognitions as per individual employee’s preference or acknowledging their achievements in private/direct communication can be a great motivator.
The modern performance management system makes reward and recognition more impactful by linking them with the specific goals, milestones, or any other professional or behavioral competency. Which not only increase employee engagement but also amplify the impact of the reward and recognition program.
See Also: How to Customize Performance Management System
A Well-Structured Communication Framework Empower and Engage Employees
A modern performance management system comes with a comprehensive software application. The performance management software is a very smart and intuitive tool, it offers tons of in-built features along with ability to customize as per your business needs. Businesses can customize any workflow or process as per their needs, which align well with their organizational goals and objectives. However, when it comes to employee engagement tools, the communication is one of the most crucial aspect. Without an effective communication strategy a business can never engage its employees. The performance management system ensures honest, open and productive dialogue between managers and the employees.
It also encourage employees to approach managers to discuss their concerns and needs. Easy communication and a well connected organizational culture help fostering a culture of collaboration and collective efforts which elevates performance and productivity. A performance management system not only help establishing strong communication channels but it also help implementing various communication strategies for elevated performance.
See Also: Top 5 Performance Management Trends
- Regular One-on-One Meetings: The performance management system (PMS) provide a structured framework where the manager and policy maker both can setup a communication policy. The one-on-one meetings are considered to be very effective in increasing employee engagement. The managers can discuss employee performance, goals, obstacles, concerns and needs in one-on-one meetings. The performance management system automates scheduling of meetings, it ensures a safer and free environment is provided to the employees to express themselves freely. Later on the transcripts, minutes of the meetings, key discussion points, etc. can be utilized for timely feedbacks, coaching, training and mentoring.
- Effective Review and Feedback Mechanisms: The performance management system offers a variety of feedback management tools. Whether it is manager-employee feedbacks, whether it is a full-on 360 degree feedback, the performance management system convers all. The performance management system provides a fully or semi-automated feedback delivery system. It not only facilitate manager’s feedback but it also provide employees a chance to share their thoughts, and even anonymous feedbacks can also be facilitated to encourage more honest and fair discussion. The performance management system can also implement the feedback policy, a customized feedback form can be triggered upon a specific event, etc.
- Leveraging Technology and Digital Tools: The performance management system provides intuitive and bespoke tools to facilitate communication. That is not all, it also provide tools and features which help managers and employees to track progress. Businesses can integrate various third-party tools, such as appointment booking, video conferencing, company’s internal communication tools, emails, and much more. The management can automate various processes, which save them a lot of time and at the same time it makes communication more effective and impactful. By leveraging technology, businesses can foster a culture of honest and open communication, build trust and encourage collaboration which amplify employee engagements.
A good communication is essential for building trust and trust and openness is one of the most effective aspect of employee engagement. When the employee feel heard, their opinion valued, and their concerns addressed, they feel more valued, motivated and connected with their duties and objectives. A modern performance management system not only provides a variety of communication tools and mechanisms to enhance communication, but also provide effective tools to gauge the progress.
See Also: The Risk of Poor Performance Management and How to identify it?
Personal Development Programs (PDPs) for Employee Growth and Engagement
The personal development programs or PDPs are a great tool to enhance and elevate employee performance. Every employee wants to grow, everyone wants to improve and elevate their professional competencies and skillset. Businesses leaders and HR needs to develop employee development programs that can personally target each employee, hence personalized personal development programs are always more effective than any generic training program.
The employee development programs are developed on the bases of skills needed to perform a task with at most efficiency and to align employee’s skills with the organizational needs. However, a performance management system offers tools which not only include employees in personal development programs but also engage them in whole process.
By closely monitoring the employee performance, identifying their strengths and weaknesses, businesses can develop personal development programs that not only help employees grow but also make them more productive and efficient asset for the organization.
See Also: Why do businesses need both the performance management and performance appraisal?
Here are a few key benefits of personal development programs that are focused on employee growth and well-being:
- Increased Employee Engagements: When a business offer employee-focused personal development programs, the employee feel more valued, trusted, connected, motivated and engaged. It encourage employees to deliver their best and perform well.
- Boost Employee Performance: When business start focusing their development programs on covering the gaps between performance and goals, the employee acquire competencies that support them achieve their goals and results in great improvement in performance.
- Better Employee Retention: For any organization retaining the top talent is a big challenge. By developing personalized development programs, businesses can show their commitment to employee’s individual growth, which help retaining high-performing employees.
- Long-term Business Success: By personalized employee development programs, businesses can foster a highly motivated workforce with up-to-the-mark skillset. This also help businesses growing in a diverse, dynamic and highly competitive market landscape.
A modern performance management system offer comprehensive tools and features for both managers and employees to assess and evaluate performance with higher accuracy. The employee KPIs (Key Performance Indicators), their alignment with goals, their progress and feedback, are all designed to empower both employees and managers.
- Guidance and Mentoring: The performance management system provide in-depth performance analysis which enable managers to deliver personalized and targeted guidance and mentoring for the employees in much needed areas.
- Setting Up Realistic Expectations: A performance management system is equipped with AI (artificial intelligence) and smart data collection tools, which provide in-depth analytical data and insights that enable managers to set the most accurate and realistic expectations of PDPs.
- Identifying Learning Needs: The performance management system not only help managers identify the learning needs, but it also help employees to evaluate their progress by themselves. They can also give their inputs in showing their interest which makes PDPs more appealing.
- Creating Action Plans: The performance management system not only provides SMART Goal setting framework but it also offer tools to make a comprehensive plan-of-action, which help identifying the needs of resources, skills and training needs to achieve those goals.
Employees in general value personal growth a lot, when organizations start developing personalized development programs it empowers their employees. The employee feel valued, they trust the organization and become more loyal. This also help organization in fostering an up-to-date workforce, which can not only help them outperform competitors but also help them dealing with emerging challenges and changing market trends. Well-trained, engaged and motivated employees help fueling the innovation and achieving higher employee autonomy which are two major contributor for success.
See Also: Employee Performance Management is a small part of Performance Management System
Conclusion
By adopting and implementing modern performance management systems businesses can revolutionize their workforce management practices, which not only help them increasing employee engagements but also make them more competitive, efficiency and productive. The operational efficiency is a key to innovation and profitability which are the two key metrics for a successful business. A modern performance management system is a combination of highly advanced performance management practices, strategies and a performance management software. Businesses can yield real-time performance monitoring and management by implementing a modern performance management system and levering its highly engaging features to bridge the gap between employees and managers.
By encouraging honest and open communication between employees and managers, businesses can foster a culture of engagement and collaboration. A modern performance management system offers advanced tools such as continuous and real-time monitoring, feedbacks and reviews. These tools provide in-depth understanding and a variety of analytical metrics, which help managers take more informed and data-driven decisions to course correct, make performance adjustments, identify resource and training needs, etc. Clear and realistic goals, well-structured communication mechanisms, and frequent guidance from managers keep employee engaged and motivated. The engaged employees not only perform well but also tend to be more innovative and adaptable for emerging challenges.
Furthermore the performance management system drives transparency, fairness and accuracy in employee evaluation, assessments, and reviews. This help gaining employee trust, which also help fostering a culture of loyalty and collaboration which help organizations in retaining the top talent. The transparency and in-depth smart analytical data driven decision making also enhance and improve employee reward and recognition programs, it also help improving the development and training programs and help elevating the overall competencies of individual employees. When employees feel empowered, valued and trusted, they tend to be more engaged, motivated and loyal with their work. Cultivating a positive and collaborative culture help organization success in long term.
See Also: Why Performance Management System is a Necessity for Companies in Dubai
Adopting a digital and modern performance management system not only help organization retain top talent, but it also help organization in leadership development. Businesses can identify the potential in employee to become efficient managers and leaders in future. This helps management to direct and focus their resources to groom such employees who have higher potential and skills. Businesses can not only enhance and elevate the performance but they can also improve the entire workforce by fostering a culture of appreciation and collaboration. Implementing a modern performance management system doesn’t mean to have a more complex and sophisticated accountability tool, but it is an investment in the future of the organization which make businesses more competitive, productive and profitable.
Businesses operating in Dubai, Sharjah, Abu Dhabi and broader UAE know how rapid the market trends changes, and how competitive business landscape is. In such markets it is extremely important for a business to leverage the full potential of the talent and resources thay have in hand. For that the efficiency, productivity and adoptability are crucial. A modern performance management system aided with a customized software application can help businesses position themselves for sustainable and long-term growth. In this blog we have briefly discussed how performance management systems can help enhancing the employee engagement and overall organizational culture. If you want to learn more about the subject or if you want our help to design and implement a tailor-made performance management system for your business or 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.
