The Art of Performance Management: Drawing the Best from Employees

Employers may wish to put a pin on this statistic: In 2019 and 2020, three in four wrongful dismissal claims lodged were unsubstantiated, according to the Ministry of Manpower.ⁱ The Ministry attributed the situation to “poor communication from employers and the lack of more robust grievance handling processes”. 

In other words, these workers perceived that their employers had treated them unfairly or there were no proper outlets to voice their grievances, leading them to report to the authorities. 

An effective performance management system could prevent such incidents. Not only can it reduce disgruntlement, it can also have tremendous benefits for business goals and talent development. 

Performance management refers to a systematic process that monitors employee performance and consists of appraisals, regular feedback and identifying training/development needs. Over the years, the tools and practices used to assess performance have constantly evolved – from the traditional top-down approach to the 360-degree feedback where peers and even subordinates have a say in each other’s assessment. 

Regardless of the process, effective performance management is essential to business success. It helps organisations align all employees to strategic objectives and offers early warning signals of potential problems. 

Organisations that pay attention to performance management enjoy these benefits:

Enhanced Employee Engagement

Rather than view performance management as simply setting goals and figuring out if employees hit or miss the targets, see it instead as an employee engagement strategy.

These conversations offer employees guidance not just on their performance, but also shows them how their roles connect to overall business goals. 

According to a survey of more than 700 human resource leaders, 89 per cent agree that ongoing feedback has a positive impact on their organisations. Such reviews are more likely to be perceived as accurate and improve the quality of conversations and employee development.ⁱⁱ

By practising constant communication and equipping managers to engage in performance conversations with employees, everyone is on the same page – which is especially important in a hybrid workplace.

One way of viewing performance management is as a forward-looking talent development process that drives business goals. 

Stronger Company Performance 

Performance management goes beyond identifying and helping to improve poor performers. It should also enhance good performers. Higher employee performance will boost company financial performance, growing not just employees but the entire organisation as well.ⁱⁱⁱ

According to McKinsey, among respondents who deem their organisations’ performance management systems as effective, 60 per cent say their companies have outperformed peers. This is nearly three times more than those who rate their companies’ performance management as ineffective.^iv 

Performance management, when carried out well, enhances a company’s long-term prospects, boosting both business goals and talent objectives. On the other hand, if it is carried out poorly, it could result in misunderstanding and accusations of wrongful dismissal. 

With the average manager spending about 210 hours^v  – or five weeks – doing appraisals of performance each year, why not maximise that time to draw the best from your employees with an effective performance management system. 

References:

[i] https://www.straitstimes.com/singapore/130-unsubstantiated-wrongful-dismissal-claims-referred-to-employment-tribunal-each-year-majority-dismissed-or-withdrawn-mom

[ii] https://www.workhuman.com/press-releases/globoforce-shrm-human/

[iii] https://www.indeed.com/career-advice/career-development/benefits-of-performance-management-system

[iv] https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/harnessing-the-power-of-performance-management

[v] https://hbr.org/2016/10/the-performance-management-revolution