What is Performance Management?
Defining performance management is simple: it’s everything a company does to track and improve how effectively an employee does their job. The responsibility falls on HR leaders to give managers the tools they need to reward successful performance and find ways to help employees who are struggling.
How companies do this varies a lot. What doesn’t change, though, is that without successful performance management, your team—and your business—will never reach its full potential.
Why Performance Management Matters
Caring about employee performance isn’t just about producing great results (though that matters). It’s also about keeping employees motivated and engaged. A job isn’t just about a paycheck—employees want to learn. The good news is, when you invest in performance, the whole business benefits.
There are big risks to ignoring performance management. High turnover is expensive: SHRM estimate it costs 6 to 9 months’ salary to replace an employee. That’s before you factor in the loss of company culture and the blow to your succession planning. The alternative is even worse: disengaged employees sticking around, putting in the bare minimum effort and holding back your growth.
Traditional Performance Management
Usually, performance management goes something like this: managers save all their feedback for an annual review, looking back at an employee’s performance for the entire year. If an employee isn’t meeting the expected standard, they risk being put on a performance improvement plan and, if their poor performance continues, having their employment terminated.
The problem is, this holds back growth. Employees spend most of the time lacking guidance, unsure how to improve, then a year’s worth of feedback (and stress) is packed into one meeting. Meanwhile, managers struggle to provide a fair and unbiased overview of such a long period.
The Importance of Talent Development
Performance management needs a rethink. High-performing companies require a culture of continuous development, where managers give employees regular, future-focused feedback tied to measurable goals. Performance management should be an ongoing conversation, where employees and supervisors work together to align on goals and drive better performance.
Paycor Talent Development simplifies this entire process. Our robust, low-touch solution gives you the tools you need to provide effective feedback, informed by data and past conversations. Automated workflows mean you avoid repetitive tasks, and have more time to focus on what’s important.