What is Performance Planning?
Performance planning is the management of employee performance by developing a plan for ensuring the required level of performance. It is achieved by developing a plan that helps achieve organisational targets within a specific time frame. Later on, one can compare the targets set with the ones achieved and understand the overall improvement in the performance of the company.
Performance planning enables organisations to set a base level of performance for their employees. It sets the expectation of employee performance, enabling them to undertake their tasks to the best of their abilities. It also helps them align their personal goals with those of the organisation, resulting in a win-win situation for both the employees and their employers.
What is the Process of Performance Planning?
Developing a performance plan is a complex process as it requires the involvement of multiple departments, such as HR, training, and management. While it is a time-consuming and stressful process, it is critical for the growth of the organisation.
The performance planning process can be categorised into 9 steps as follows:
1. Automate Performance Analytics
The first step is to automate the process of performance analytics by deploying a dedicated performance management system. This system should be fed with the performance data of all employees, which can be undertaken by their supervisors along with the HR team. You can also use performance surveys, which help store this data in an easily accessible central location. Additionally, it also helps the managers gather performance data related to any employee quickly.
2. Explain Performance Reviews
The next step is to help the employees understand the performance review process. Your employees should be aware of how their performance is evaluated, enabling them to share their concerns before they become larger issues. Hence, companies should ensure that during the onboarding process, employees are made aware of the working of their performance analytics system. It helps them understand that their organisation believes in open communication and transparent processes.
3. Align Goals
Once your employees are aware of your performance plan, you should align your organisational goals with those of individuals and teams. By aligning them, you are essentially providing them with added incentive to fulfil the organisational goals. It also helps them understand what their organisation is expecting from them, resulting in better output.
4. Define Performance Strategies
Once the employees are aware of the goals and how their performance will be evaluated, the next step is to define the exact strategies to be used in achieving these goals. You should also ensure that adequate resources are allocated to your staff members to ensure that they can attain the goals within the specified time frame.
5. Show ‘The Bigger Picture’
Additionally, you must ensure that your employees are aware of ‘the bigger picture’. Hence, you should help your employees realise the importance of their role for the organisation. It helps them understand their relevance to the company, resulting in increased loyalty and retention.
6. Set Performance Objectives
The next step is to understand where your employees stand currently in terms of performance. Depending on their expertise and experience, you can decide who requires more training and who would be better suited to fulfil specific roles within the organisation. Hence, you should have a discussion with each team member regarding their performance and expectations before finalising their performance objectives.
7. Develop Transparent Communication
Similarly, you should also develop a transparent communication plan to ensure that your employees have a clear idea of what is expected of them. They should also be encouraged to ask questions and clear their doubts whenever required. Having transparent communication channels also enables them to provide feedback and speak their mind, providing you with in-depth insights into your employees’ performance and outlook towards your organisation.
8. Set Regular Performance Reviews
You should set regular performance reviews to ensure that the managers are aware of their team’s performance. With regular reviews, they will be able to appreciate the ones performing well while tackling the challenges of underperformers. They will be able to understand whether there is any issue with their methods and processes, or whether their employees require additional training. Hence, regular performance reviews act as checkpoints in achieving organisational objectives.
9. Optimise Performance Plan
The final and ongoing step is to optimise your performance plan. Based on employee feedback and the effectiveness of your initial performance plan, you should make necessary optimisations and deploy them to ensure that your plan remains successful. By acting on the feedback received, you will also be able to ensure employee satisfaction and loyalty, as they understand that their suggestions are effective in shaping their company.
Importance of Performance Planning
Performance planning is important to organizations as it provides various benefits to companies. Some of the major reasons why it is relevant for organizations are:
➔ Alignment with Organizational Goals
Performance planning ensures that individual goals are aligned with the organization’s goals and objectives. Hence, it gives the employees a personal stake in ensuring the achievement of organizational goals, allowing them to understand the relevance of their work.
➔ Expectation Setting
Performance planning also sets the right expectations for the employees. It defines the responsibilities of job roles, enabling employees to understand how their performance will be evaluated by the company.
➔ Better Productivity
Since the employees understand what is expected of them, they can deliver it on time, ensuring improved productivity overall. It also helps them understand which skills they need to improve to match their company’s expectations.
➔ Increased Accountability
Once the employees have a clear idea of their roles and responsibilities, they can be held accountable for their performance. It promotes a culture of accountability, helping the company track their progress.
➔ Improved Career Growth
Employees would be more inclined to undertake training and development programs once they understand how their company is tracking their performance. Hence, performance planning also enables employees to identify skill gaps and upskill themselves for enhanced growth.
➔ Continuous Feedback
Performance planning also provides the blueprint for regular performance feedback. Through robust performance planning strategies, companies can monitor their employees’ performance and provide them feedback on regular feedback, ensuring that they stay on track.
➔ Objective Appraisals
A robust performance plan also enables objective performance appraisals and promotions, ensuring a merit-based promotion culture. It ensures a fair appraisal process, improving employees’ trust in their company.
Objectives of Performance Planning
Since performance planning is critical in ensuring the achievement of organisational goals, it is undertaken with well-defined objectives. These objectives help the HR and management stay on the right path and ensure that these objectives are fulfilled on time, within the specified budget.
Hence, let us check out the major objectives of performance planning:
1. Align Organisational Performance Goals
Performance planning requires you to clearly define the organisational goals and set the performance levels to ensure the accomplishment of these goals. As a result, it is responsible for aligning employees’ personal goals with the organisational ones. While it motivates the employees to work harder to achieve their goals, it also helps create a shared understanding of the company’s vision, enabling better productivity.
2. Set Clear Performance Expectations
Once the organisational goals are defined, you can let your employees understand what you expect from them. You can define their Key Performance Indicators (KPIs), which enable them to understand how their performance will be measured by their organisation. Similarly, you can also define the Key Responsibility Areas (KRAs), which help them understand what their daily duties and responsibilities are, which will ensure the accomplishment of their goals.
3. Provide Transparent Communication
Performance planning also enables seamless, transparent communication as it enables regular performance feedback between managers and employees. Due to the regular performance discussions, employees can understand whether they are on the right track regarding their performance, while their supervisors will have a better idea of the progress of their projects.
4. Standardise Performance Metrics
Similarly, performance planning also results in standardised performance metrics within the organisation. Both the employees and the management will be on the same page regarding the performance expectations, ensuring well-defined job responsibilities and goals. It also increases transparency in performance analysis, ensuring better productivity in the organisation.
5. Create Career Development Plans
Performance planning also helps with the creation of career development plans for employees. Since it helps in analysing employee performance and ensuring that it remains adequate, it helps them develop career growth opportunities for their staff members who show potential. Having a clear career development within the organisation also motivates their staff members to stay with them for longer, enabling enhanced employee retention rates.
Components of Performance Planning
The major components of performance planning are related to planning and strategising of employee performance and its enhancement. These components work together to plan the development of employee performance guidelines.
Hence, let us check out the major components of performance planning:
➔ Goal Setting
Goal setting is the process of establishing well-defined goals for the company, various departments, and on an individual level. These goals should follow the SMART framework, by being Specific, Measurable, Achievable, Relevant and Time-bound. Development of these goals is a part of performance planning as it enables the staff to have clear objectives for improved productivity.
➔ Expectation Setting
Similarly, performance planning also comprises expectation setting. It defines the exact role every employee plays in the fulfilment of organisational objectives. It lists down their daily responsibilities, which define their behaviour towards their work. As a result, it sets the expectation for the employee regarding what they are supposed to achieve by undertaking their daily duties.
➔ Strategy Development
Along with the goals, the performance plan also includes strategies to achieve these goals. Strategy development outlines how employees will achieve their goals and meet expectations by identifying Key Performance Indicators (KPIs) and developing action plans. Through these strategies, employees gain a robust idea of how to achieve their goals, resulting in increased efficiency.
➔ Development Focus
Performance planning also helps identify the areas for improvement and helps create opportunities for employee growth and career development through a training management system. These opportunities help the employees understand their value to their organisation. On the other hand, the company can identify individuals with leadership potential and undertake succession planning.
