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5 Simple Questions to Ask When Creating a Performance Management System

Man in yellow shirt pondering performance management system.

Before con­struct­ing an employ­ee per­for­mance man­age­ment sys­tem, be sure to ask your­self these key questions

Whether you’re cre­at­ing a per­for­mance man­age­ment sys­tem from scratch, or your com­pa­ny is inspired to rehaul all your exist­ing process­es, you will need to put in some seri­ous thought and con­sid­er­a­tion. Specif­i­cal­ly, there are a num­ber of ques­tions you will need to reflect on and ask your­self in order to ensure you have a well-con­struct­ed per­for­mance man­age­ment sys­tem that will inspire and encour­age your work­force to excel.

Remem­ber: a poor per­for­mance man­age­ment sys­tem can have unfor­tu­nate con­se­quences, includ­ing low employ­ee morale, poor engage­ment lev­els and high turnover. To min­imise the risk of things going wrong, we have com­piled a list of five crit­i­cal ques­tions each HR man­ag­er should con­sid­er before press­ing for­ward with a new per­for­mance man­age­ment system.

1. What are my company’s values?

You might have heard of the impor­tance of estab­lish­ing clear com­pa­ny val­ues. They influ­ence every sin­gle aspect of your com­pa­ny, from recruit­ment to train­ing. They reflect what your com­pa­ny stands for and the direc­tion you are head­ing. For these rea­sons, it’s of the utmost impor­tance that you con­sid­er your company’s val­ues when cre­at­ing a new per­for­mance man­age­ment sys­tem. Flex­i­bil­i­ty, cre­ativ­i­ty, hon­esty and diver­si­ty are all val­ues that can be incor­po­rat­ed into your sys­tem in effec­tive ways.

2. How often should my com­pa­ny be con­duct­ing per­for­mance discussions?

The tra­di­tion­al per­for­mance man­age­ment cycle revolves around a sin­gle annu­al per­for­mance appraisal, but this is a sys­tem that has proven to be inef­fec­tive. For this rea­son, many com­pa­nies are opt­ing to switch to con­tin­u­ous per­for­mance man­age­ment, which involves reg­u­lar per­for­mance con­ver­sa­tions called check-ins’. The con­tin­u­ous nature of this cycle keeps employ­ees reg­u­lar­ly updat­ed with feed­back and pro­motes trans­par­ent, hon­est com­mu­ni­ca­tion between man­ag­er and employee.

Before you cre­ate a new per­for­mance man­age­ment sys­tem, decide whether you want a more tra­di­tion­al approach to per­for­mance man­age­ment or a more mod­ern, qual­i­ta­tive approach. This deci­sion will impact every­thing from the type of soft­ware you use to how you address per­for­mance-relat­ed pay.

If you would like to intro­duce reg­u­lar check-ins, we have a valu­able resource for you in the form of a free one-to-one meet­ing tem­plate. This can help get man­agers and employ­ees used to the new sys­tem. It can also guide mean­ing­ful conversations.

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3. How impor­tant is auton­o­my and flex­i­bil­i­ty to my company?

Increas­ing­ly, employ­ees are seek­ing out vacan­cies and for­ward-think­ing com­pa­nies which accom­mo­date flex­i­bil­i­ty and auton­o­my. This is par­tic­u­lar­ly true of mil­len­ni­als. In fact, even top per­form­ers are hap­py to sac­ri­fice pay for increased flex­i­bil­i­ty. If you want to incor­po­rate ele­ments of flex­i­bil­i­ty in order to attract and retain top tal­ent, you will need to con­sid­er how this will affect your per­for­mance man­age­ment sys­tem. This could come in the form of flex­i­ble hours, remote work­ing oppor­tu­ni­ties, or cre­ative time’ to explore indi­vid­ual projects. Some com­pa­nies have even tak­en the brave step of not track­ing work­ing hours or employ­ee hol­i­days — a strat­e­gy that is pay­ing off in many ways.

4. How can I cre­ate an atmos­phere and cul­ture that pri­ori­tis­es trans­par­ent communication?

It will come as no sur­prise that open and hon­est com­mu­ni­ca­tion is crit­i­cal to the suc­cess of a com­pa­ny and to the over­all per­for­mance of its work­force. Employ­ees should feel free to open up when they are strug­gling with a cer­tain task or objec­tive, they should feel con­fi­dent about admit­ting to weak­ness­es and they should be able to give feed­back and sug­gest changes to exist­ing work­place process­es and employ­ee per­for­mance man­age­ment tools.

There are many ways to encour­age open lines of com­mu­ni­ca­tion when design­ing a per­for­mance man­age­ment sys­tem. Con­sid­er invest­ing in per­for­mance man­age­ment soft­ware that allows for real-time feed­back. Intro­duce more reg­u­lar per­for­mance dis­cus­sions. Train man­agers on how to talk to their employ­ees and encour­age them. In time, it will become clear to employ­ees that they are in a safe atmos­phere that encour­ages trans­par­ent dis­cus­sions and collaboration.

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5. How do I encour­age employ­ees to be moti­vat­ed and enthu­si­as­tic about their per­son­al devel­op­ment objectives?

In order to improve com­pa­ny per­for­mance, you will need to get employ­ees excit­ed about their per­son­al devel­op­ment objec­tives. How you will do this is some­thing you will need to con­sid­er from day one and reg­u­lar­ly revis­it, depend­ing on cur­rent per­for­mance man­age­ment trends.

Con­sid­er how you will get your employ­ees to under­stand that devel­op­ment objec­tives aren’t sim­ply an arbi­trary per­for­mance man­age­ment tool. It is a means to help employ­ees advance and devel­op in areas he or she deeply cares about, in a way that will help them achieve their per­son­al career goals. You will also need to dis­cuss how you will pro­vide your employ­ees with appro­pri­ate learn­ing mate­ri­als. Final­ly, you will need to cov­er how you will give your employ­ees the auton­o­my to con­trol their own per­son­al devel­op­ment objectives.

At Clear Review, we are proud of our intu­itive, easy-to-use, con­tin­u­ous per­for­mance man­age­ment soft­ware that has helped com­pa­nies around the world improve lev­els of per­for­mance and employ­ee engage­ment. To find out more about how we can help you and your busi­ness, get in touch for a free per­for­mance man­age­ment con­sul­ta­tion.