The performance management is a powerful tool for leading the organization. The proper goal setting process ensures that managers and employees follow the business strategy. The unified and crosschecked goals ensure that employees cooperate. The functions share the same vision, and they are willing to fulfill it. The performance appraisal can increase the employees’ motivation as they see the consequences of the appraisals. The calibrated results of the performance management lead to identification of top performers and high potentials. The benefits of the performance management are too huge not to utilize them.
Performance Management Benefits for HR
HR is the owner of the performance management system in the organization. It develops the system, receives the regular feedback and works with the performance management results to build a better organization.
HR uses the performance management as the system for building the common corporate culture. The goals and values are set in accordance with the corporate culture. HR can empathize several values, or it can increase the weight of the particular category in goals. Employees and managers are smart. They adjust their behavior quickly.
HR benefits from data collected in a standardized way. Managers evaluate employees against goals and values. HR can use data to identify gaps in the organization. HR can plan the training and development needs; it can identify employees suitable for the leadership development program.
The Performance Management decreases the personnel expenses and manages them. The bonuses are paid to top performers, and they are differentiated. The motivation of employees increases, the fluctuation decreases and it has a hugely positive impact on the personnel expenses.
The performance management has a positive impact on the role of Human Resources in the organization. The system needs to be calibrated, and HR can consult and recommend many goals assigned to the organization. Additionally, HR can set the people management goals for the whole managerial population in the company.
Performance Management Benefits for Organization
The organization needs to navigate all employees the same direction, and it needs to spread the common vision and goals for everyone. The performance management with the goal setting process is the best tools for these tasks. HR centrally manages the performance management, and it sets the basic principles for the goal setting process.
The organization can benefit from the managed sales volumes. The organization offers many products, but it can point the most profitable products in goals for the sales staff. It can improve the quality of products by putting the quality into the goals of the production staff.
The organization needs employees to be centered about the shared vision. The performance management system improves the internal communication. As the top management has the same goals as employees, the top management can communicate the progress during the year.
Performance Management Benefits for Employees
The performance has a positive impact on the employee engagement. The visible and direct connection of goals to the company goals improves motivation and engagement. The employees love to understand their goals. The direct connection to the company goals is the best way to explain the personal goals.
The employees receive a formalized feedback. The form of the feedback is standardized, and every employee has a chance to hear about the career opportunities. The employee can express interest in the move to a different department. Everything is recorded. HR uses information provided for planning vacancies.