The performance management cycle and processes

Without proper processes and practices, performance management can be one giant HR headache. Knowing how each employee is performing, whether they are achieving their goals, and contributing to company objectives will quickly be overshadowed by other important aspects of people management.

Putting a process in place, such as a performance management cycle, allows managers and team leads to gain a 360-degree view of employee performance. Finding the gaps and opportunities to improve employee performance and achieve company goals. Plus, with the support of performance management software, this can be made even easier!

What is the performance management cycle?

A performance management cycle is the process of continuous improvement and development of your employees. It helps to set a clear plan for how you expect your staff to improve over time, working with their line manager or team leaders to do so.

The cycle should be used to:

• Set appropriate goals.

• Retain your top talent.

• Explore all the options to help the employee achieve their goals.

• Provide all the tools, resources, and support needed to put the goals into action.

• Continuously review and reward progress against the pre-set goals.

• Develop your current employees.

Stages of the performance management cycle

The performance management cycle is traditionally split into several stages.

In this article we will look at the 5 core stages. Identifying areas of focus for managers and business leaders.

The key stages are:

1. Plan

2. Monitor

3. Develop

4. Review

5. Reward

Stage 1 – Plan

Performance planning is where goals and objectives are set. It's important you set clear and achievable goals, not doing so won't improve performance. You should work with each employee and set goals that improve individual development. Remember, one employee will work differently to another.

Employees setting their own goals can lead to increased ownership and a greater commitment to achieving them. Make them aware of the key performance indicators and company goals they should work alongside. This'll help to create achievable targets.

Stage 2 – Monitor 

The second stage is to monitor employees' performance based on previous goals set. If you work within a HR department, this job will usually fall under the responsibility of the employee’s direct line manager. However, you may want to support the process by providing documents and templates for the record of one-to-one meetings.

Monitoring is the period that the employees are working on their goals as part of their daily tasks. Employees can use this stage to undertake some further training or start their personal development plan.

Ideally these should be held monthly with the employee to monitor progress and discuss any concerns they may have. There are many subjects you can cover during the meeting, such as accomplishments, progress, concerns, and support.

Here are some questions that can be asked:

• What is the employee most proud of over the last month?

• Does the employee feel they're on track to hit their goals?

• Is anything getting in the way of the employee hitting their goals?

• Does the employee need to revise their goals?

• Is there any help the employee needs to hit their goals?

Stage 3 – Develop

The development stage of the cycle is to use any data found in the monitoring stage to improve the employee's performance. It may involve making changes to an employee's development plan or providing a refresher course if required.

Another option is to provide an assignment or task that helps to improve their skills or knowledge. Ensure any tasks set are manageable and won't increase any workplace stress on the employee or wider team.

Stage 4 – Review

Managers and employees should meet regularly to discuss how they both feel the employee is performing. These performance reviews should be as honest as possible, as they’ are an important way to monitor the employee's progress towards the pre-determined set of goals.

Some common questions during a performance review are:

• Which goals were achieved?

• Which goals weren't achieved and why?

• What can be done differently moving forwards?

• Did the employee feel they got enough support needed to achieve the goals?

Performance appraisals have been the main choice for performance assessment in the past. But the modern workplace has less focus on past performance, with more on regular reviews maybe twice or even three times a year.

A key part of the review stage is assessing performance and the employer providing instant feedback. Senior management should use this stage to set new goals with the aim of further developing skills.

Stage 5 – Reward

The fourth stage of the cycle is to reward your employees based on pre-determined goals. It can be used to enhance performance long term.

Rewarding good performance is arguably more important than punishing someone who is struggling, as it's an important part of employee engagement. Employees who feel they're recognised by their employer are more likely to stay with the company for longer.

Rewarding your employees for their performance

You can choose to reward your employee in a number of ways. And these rewards can coincide with the achievement of wider company goals and objectives.

For example:

• Salary increases or employee bonuses

• Promotions

• Additional annual leave

Recognition and praise of an employee when they have worked hard to achieve their goals is what helps to motivate the workforce. Supporting workplace culture and employee engagement.

If an employee feels recognised for their contribution to the business, they’ are much more likely to commit to the role. Staying in their position and supporting business growth. This is an important element of employee retention.

The benefits of performance management processes

By having structured performance management processes in place, you can clearly identify goals and objectives for each employee. Explaining what these are, why they are important and how they can be achieved.

Employees will then be aware of their role and responsibilities within this process and how their personal and professional development contributes to business growth and success.

Both for employees, your managers, and the business, a performance management process offers some of the following benefits:

• Effective communication

• Increased productivity

• Improved quality of work output

• Talent recognition

• Enhanced decision making

• Clearer identification of underperformance in the workplace

• Goals and objectives set in line with company targets

5 ways technology can enhance your performance management processes

To complement your performance management process and your use of the performance management cycle, you can choose to make use of modern technology. Solutions like HR software and performance management software can enhance your approach to managing employee performance.

Gain a 360-degree view of team performance and development 

In one screen you can monitor the performance and progress of your team. Helping you to clearly identify who is on track to achieve their goals and who may be falling behind.

Set employee goals and track progress

Performance management software allows you to create and update goals for each employee. Providing features to set time-bound objectives and keep track of this in one easy-to-access place.

One-to-one meetings can be structured and more efficient

Structure agendas for your upcoming meetings, giving employees and managers an opportunity to prepare any questions or raise any concerns they may have. This helps to provide clear topics for each week or monthly catch-up, making sure you’re covering every important point.

Gather performance metrics for individuals

For a quick analysis of an employee’s current performance and progress, you can review performance metrics. Providing a clear focal point for performance reviews and one-to-one meetings. This helps to improve the efficiency of your processes and removes the need for micromanagement tactics.

Document employee appraisal notes in one place

With performance management software you can keep all your employee performance review documentation in one place. Giving you quick access to previous notes and upcoming meeting agendas. Say goodbye to dated spreadsheets and piles of paperwork!

Enhance your performance management processes with BrightHR

When running a business, how your employees perform can be crucial to the growth of your company. So, it's important you know how to set and track goals with them, improving performance.

Failure to do so can lead to you losing your best employees, their development being halted, or your employees not feeling valued.

Empower your employees and enhance your performance management processes with performance management software.

To find out how BrightHR can support the performance of your business, book a free demo today or get in touch with our team.