What Is Performance Management? 4 Key Insights for Encouraging Employees and Teams

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A group of managers discusses company performance at a desk.

Successful businesses rely on effective communication among managers, employees, and teams. By establishing standards of excellence for their businesses, managers create work environments in which everyone can better perform their duties. Performance management provides an effective way for managers to establish accountability and provide feedback for their employees. Understanding the significance and impact of performance management in a business is important for students and professionals who are pursuing a career in management. Managers benefit their companies when they exhibit specific leadership skills, such as encouraging employees and teams to perform to their highest potential. Students and professionals can deepen their knowledge and practice of leadership skills by pursuing higher education and earning one or multiple Online Graduate Business Certificates.

What Is Performance Management?

Businesses and companies define and implement performance management differently. However, at its core, performance management provides the standard by which a business understands and assesses its own performance. Managers use performance management to establish common ground with employees regarding the company’s expectations and goals.

Some managers review their employees on an annual basis, while others do so more consistently, assessing how individuals contribute to the overall performance and growth of the business. Managers can conduct performance management in a variety of ways. The goal is to see how much work an employee completes and the level of excellence with which they complete it.

Some managers use a 9-box grid to assess an employee’s performance and potential. Others use tools such as 360-degree feedback and 180-degree feedback, in which different people in a company provide feedback on an employee. Another form of performance management is Net Promoter Score, which assesses an employee on a scale of 1-10. After assessing an employee’s performance through a certain framework, whether Net Promoter Score, 360-degree feedback, or 180-degree feedback, managers can constructively communicate with employees on ways to further grow and improve.

4 Key Insights for Encouraging Employees and Teams

Since managers can implement performance management in different ways, it is important that they communicate with their companies about their methods. While performance management can potentially be a source of tension and stress in a work environment, managers can work toward making the process a regular and positive experience. Managers can encourage their employees and teams by implementing the following four key insights:

  • Value employees’ contributions — Before, during, and after performance management, managers can remind their employees and teams that their hard work contributes to the larger purpose of the company. Employees help troubleshoot and solve problems, drive sales, connect with clients, and ultimately help increase profits. By recognizing how employees help their companies, managers can establish positive and healthy work environments.
  • Provide effective communication — Managers can discuss company goals with employees on a regular basis to encourage effective communication regarding company progress. They can use the process of performance management to set important company standards, but can also use the process to establish ongoing conversations. By regularly meeting to discuss performance-based tasks, managers can measure an employee’s progress and identify what skills they need to further develop.
  • Establish team building — By getting to know their employees and cultivating a collegial environment, managers can align team-building activities with company objectives. Employees can feel more confident about fulfilling company expectations and goals if they are comfortable and trust the people they work with.
  • Encourage employees with feedback — Managers can establish rules for performance management, but should also provide encouraging feedback that will enable their employees to grow. Managers should offer positive feedback regarding what employees are doing well and constructive feedback for what they need to improve. Since performance management is an ongoing process, managers can help ensure the growth of their companies by providing effective feedback for achievable goals.

Learning Performance Management

By incorporating these four key insights, managers can boost both the morale and productivity of employees. Managers can also normalize performance management and alleviate stress for their employees, while still maintaining a standard for the company.

Professionals and students who are interested in management can learn more about performance management through earning a graduate degree or graduate certificates. Some graduate programs focus specifically on developing the leadership skills to effectively conduct performance management in the modern workplace.

Two programs at Ohio University — the Online Master of Science in Management and the Online Graduate Business Certificates — serve to develop leadership skills that managers can incorporate into their companies. The Management and Leadership Certificate particularly equips students to apply leadership practices and make strategic decisions.

In the course called Managing Individuals and Teams, students learn to analytically approach problematic interactions between employees and resolve team conflicts. In the course titled Teams and Researching the Business Environment, students learn how to cultivate positive work environments and conduct effective performance management. Students will also learn to apply normative and behavioral decision-making skills after taking Managerial Decisions and Challenges. The courses in the certificate program help students implement strategic leadership practices as well as make effective operational and administrative decisions.

Learn More

While successful managers have an understanding of business analytics, operations, and finance, they also cultivate safe and trusting work environments for their employees. An important aspect of any business environment consists of effective performance management. Managers can encourage their employees and teams through the thoughtful development and careful application of performance management, while also ensuring the growth of their companies.

Students and professionals who are interested in furthering their education and management skills would do well to look into the Online Graduate Business Certificates program and Online Master of Science in Management degree at Ohio University.

Learn more about how these programs can help you pursue your professional goals and successfully implement performance management in the workplace.

Recommended Reading

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Business News Daily, “What Is Performance Management?”

D!gitalist Magazine, “What Is Performance Management? 5 Reasons Why It Matters”

Entrepreneur, “10 Insights on Building, Motivating and Managing an Exceptional Team”

Forbes, “The Future Of Performance Management: A Redesign Leading To Creativity, Resilience And Collaboration”

McKinsey & Company, “Performance Management: Why Keeping Score is so Important, and so Hard”

Ohio University, Online Graduate Business Certificates

Ohio University, Online Master of Science in Management