Organisations are always working towards increasing their productivity and growing bigger by the day. It owes a lot to its employees. Employee productivity and efficiency drives a company’s growth. Therefore, companies need to ensure that clear objectives and expectations are set for their employees and the same is communicated to them too. But setting goals is not enough. It is equally important to evaluate, measure, monitor, and enhance employee performance on these set goals on a recurring basis.
Managing employee performance at work enables the Human Resource Management Team to make several decisions regarding their employees such as performance appraisals, coaching and training requirements, hiring and firing needs, etc. A regular and continuous track of its employee’s performance also serves as a record and builds transparency in the organisation culture.
The simple act of paying positive attention to people has a great deal to do with productivity.
Every employee in an organisation has their own set of KRAs (Key Responsibility Areas). They are required to meet set benchmarks and even exceed them while fulfilling these responsibilities. These tasks and goals are aligned with the organisation’s aims and objectives. A regular and consistent check on performance helps HR measure and evaluate employees’ efficiency in meeting responsibilities and accomplishing objectives. It is only with this continuous measurement that the company can identify whether goals are being met on a consistent basis or not.
Employees need to be adept in various skills from technical to soft skills like leadership, innovation, team spirit, etc. By measuring the performance of each employee, HR attempts to identify skill gaps and bridge them with Training and Development programs, and Coaching sessions. Tracking the performance of your employees helps not only to identify these gaps but also select the right program to bridge them.
Deploying the right Enrichment Program is only the beginning of the process to improve employee productivity. However, the process is complete only after monitoring the success of these programs through performance evaluation and identifying if there is a need for further improvement. Continuous performance assessment comes in handy to evaluate the effectiveness of these various programs like training and development modules or coaching sessions and finding out if performance has improved after their implementation.
Monitoring achievement of goals on a regular basis helps HR give constructive feedback to its employees. Whether they are ranking high on the records or there is further scope of improvement, positive feedback goes a long way in building healthy relationships between employees and management. It sets the stage for two way communication where employees can share their concerns with the management and vice versa.
Many organisations have Reward mechanisms linked to performance. It becomes imperative for HR to keep a track of employee performance to find out the deserving candidates and appreciate their efforts and achievements through awards, certificates, monetary or other compensations. Rewarding the right candidate brings transparency in the organisation and also builds healthy competition between peers.
Many HR theories have proven the crucial and direct relationship between motivation and employee productivity. Though some employees may be intrinsically motivated, there are many for whom achievements and recognition become critical to keep them going. Performance management serves as a motivator for all employees, always challenging them to improve their scores over time. It also helps them compare their previous performance with their current ones and guides them to find out areas of improvement.
Performance Appraisal is the time of the year every employee looks forward to and eagerly waits for. Yearly performance is evaluated on certain predefined parameters and a score is given to each employee. The increment is determined based on this rating and that is how the revised salary structure is formed for the new employment year. It is needless to say how vital it is to monitor the performance of all employees for deciding their appraisals.
Depending upon the industry, many organisations have a hybrid pay structure. The Cost-To-Company is a combination of fixed pay and flexible pay where the flexible component is based on individual performances over several measurable criteria, eg. the number of sales per month. To follow this structure, a strong and accurate performance monitoring system is a prerequisite.
Organisations have a hierarchical structure and every employee has an ambition to reach to the top. It becomes very difficult for HR to ensure that only the deserving employees reach there. However, it is their duty to provide equal opportunities to everyone. The selection criterion, thus, becomes the evaluation scores presented by the performance appraisal. Continuous monitoring helps HR decide the career path for its employees and also plan their human resource requirements.
In the corporate world, there is no place for redundancy. It is only talent that gets a place and a pay. Companies are never willing to part with their efficient employees and can even offer a higher pay to retain them. But if the performance is not worthy, they will not think twice before terminating them too. So, whether or not an employee is a good fit is decided based on several factors out of which, performance gets the highest weightage.
The main aim of a performance monitoring system is to improve employee productivity and thus lead to an increase in the overall productivity of the company. As they say, “every penny counts” and so does the performance of every employee.
In a nutshell, without setting goals and measuring performance regularly, organisations will be directionless and eventually become stagnant. All HR functions revolve around employees and their contribution to the organisation. So the performance management system has to be competent enough to measure employee performance accurately over several parameters including the intangible ones.
Continuous Performance Management (CPM) is a salient feature of the Performance Management and Goal Management Solution provided by SAP SuccessFactors. It provides a complete solution by informing the employees about their performance and enabling the management to guide them by providing continuous and constructive feedback.
Empower your HR department with SAP technology for a smooth transition to a completely digital human resource department. SAP SuccessFactors is a cloud-based HxM solution that covers all of your HR needs as an employer and helps you retain and reward your employees with its flawless performance review system which is in accordance with the Sarbanes-Oxley Act for a transparent and accessible review system.
To know more on how SAP SuccessFactors Performance & Goals can help your organisation, book a demo today.