Not Sure if You Need Performance Management? This Guide Can Help You
Introduction
Employers need to monitor their workers’ performance to ensure that each individual meets their daily or weekly goals and objectives. This is essential to any successful corporation as it allows business owners to identify areas where their staff members may need additional training or support. It also helps them recognize employee strengths and weaknesses to allocate resources better and create an environment that encourages productivity and success.
At Q2 HR Solutions, we can help you execute performance management in the Philippines. Our team has decades of experience in the industry, and on top of helping you find the right people, we are dedicated to helping you oversee your current workforce. Count on us to help you decrease turnover rates, improve employer branding, boost your bottom line, and more.
What Is Performance Management in the Philippines?
As the name implies, performance management is a corporate tool used by managers to oversee and evaluate their employees’ work. When executed well, it can help both parties see eye-to-eye concerning their expectations, goals, and career progress. It views individuals in the context of a more extensive workplace system, which is why those in higher positions can determine if a person’s work aligns with the corporation’s overall vision.
Performance management programs in the Philippines use various tools to create and measure goals, objectives, and milestones. Overall, this initiative aims to define effective performance and develop processes to measure an employee’s current status. Rather than following the traditional year-end reviews, it turns every interaction between the worker and manager into an opportunity to learn.
Kinds of Performance Management Systems
There are various types of strategic performance management systems that companies in the Philippines utilize. Depending on their current setup, most corporations use a combination of the following:
Balanced Scorecard
Known as one of the most popular options, the balanced scorecard (BSC) strategy considers four different business perspectives: financial, customer, internal processes, and people. It gives employers a deeper understanding of these components and helps them understand how vital they are to each other. Additionally, this structured reporting process requires you to review your strategy regularly and adjust it as needed.
The balanced scorecard in strategic management has three main components, namely:
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Objectives – These are high-level organizational goals that clearly state what you are trying to achieve strategically. They are broken down according to the four perspectives.
Measures – Also known as key performance indicators, measures help you understand if you can accomplish your objectives strategically.
Initiatives – These are key action programs or projects developed by management to achieve objectives.
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Management by Objectives
Although management by objectives has many variations, it centers on creating a set of organizational objectives used as guides when creating individual employee objectives. This approach has been around for quite a while. However, it often doesn’t appear in strategy documents.
Here are a few things you can look out for to identify if a company is utilizing this approach:
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The objectives are a collaborative effort between the leaders and employees so that the latter creates buy-in and helps the former identify how to obtain the goal.
Unlike the BSC approach, the objectives don’t necessarily have to align with an overall strategy.
There may be less emphasis placed on how the objectives are achieved, with the organization often simply relying on either the measures or projects.
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Budget-Driven Business Plans
A company's overall budget can heavily affect its performance management plans. This doesn’t necessarily have to be negative, though, since there are many ways to work around such limitations. “Work plans” are often linked to the overall financial capacity of the company, which is why the projects and programs that usually deliver results are carefully crafted to ensure that the allotted amount is not exceeded.
This strategy is less commonly used but works for some organizations. Its key characteristics include the following:
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Managers may group income sources and expenses into categories to more easily identify areas that need downsizing or investing.
The approach is driven by finance, as opposed to its other counterparts that are led by a strategy department.
Department heads are required to consider last year’s spending to ensure that the future activities they wish to accomplish will not affect the planned budget.
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The Stages of Performance Management
A strategic performance management system has five key components, which are:
Planning
You must set performance expectations and goals to which groups and individuals can channel their efforts. It is advisable that you involve your employees in the planning process to help them better understand the organization’s goals, the measures that need to be taken, the reasoning for each initiative, and the level of responsibility required.
Additionally, make sure to establish the elements and standards of their performance and appraisal plans. These should all be measurable, understandable, verifiable, equitable, and achievable, all while being flexible enough if ever program objectives or work requirements are changed.
Monitoring
All your assignments and projects must be monitored continually. You must consistently measure the performance of each individual and provide ongoing feedback to help your employees reach their goals.
You can conduct progress reviews with your team members, where their performance is set alongside their elements and standards. This way, you can also immediately determine if an individual needs assistance to help boost the quality of their work rather than waiting until the end of the year, which is when summary ratings are usually assigned.
Developing
To ensure that you can provide for your employees’ developmental needs, you must give them ample training. This way, they can take on assignments that help them strengthen their job-related skills and competencies while they practice leadership or autonomy.
Overall, effective performance management in the Philippines provides employers with an excellent opportunity to spot their employees’ developmental needs. This is because the first two stages (planning and monitoring) make any deficiencies evident. Areas for improving good performance may also appear, which means they can help individuals grow even more.
Rating
Essentially, rating means grading an employee’s performance against the elements and standards set for their role. This numerical data directly affects various personnel actions, such as within-grade pay increases and additional retention service credit.
Summarizing employee performance or ratings can also be incredibly beneficial to organizations. They can use this data to compare an individual’s current productivity levels with the last month. Using this document, they can also help identify their best performers, which is especially important for the last stage of performance management.
Rewarding
The basic principle of effective management is that all behavior is controlled by its consequences, which should be formal and informal as well as positive and negative. This is why recognizing employees, whether individually or as members of a group, for their performance and contributions is vital.
Although good performance should be acknowledged with a simple “thank you,” this is not enough. Leaders should be able to provide their employees with formal rewards such as cash, time off, and other nonmonetary items.
Frequently Asked QuestionsWhat Are the Main Objectives of Performance Management?
Although the specifics differ from company to company, performance management in the Philippines has five major objectives:
Create clear and succinct role definitions, expectations, and goals
Boost employee engagement
Improve managerial skills
Increase productivity through stellar performance
Craft a performance reward program
Who Is Responsible for Performance Management?
Managers, or those in leadership positions, are responsible for their team members' guidance and correction. They will help each employee improve their performance and maintain it once it reaches the desired level. However, the responsibility doesn’t fall entirely on their shoulders. Employees also need to voice their concerns if they feel they aren’t getting enough coaching to improve themselves.
What Are the Common Concerns Faced in Performance Management?
Many corporations struggle with performance management, and this is perfectly normal. Some of the most common concerns business owners face nowadays include the following:
Difficulty with time management and task prioritization
Lost time due to excessive absences, tardiness, etc.
Slow response times to incoming requests
Late assignment submission
Trouble staying on task
Conclusion
Performance management is an essential part of any business. It helps ensure that employees perform at their best and that the organization meets its goals. But how do you know if you need performance management?
At Q2 HR Solutions, we can help you understand the benefits of performance management, when it should be used, and how to implement it in your organization. With our help, you can make informed decisions when handling your employees and the different scenarios involving them. Reach out to us today to learn more!
