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March 20, 20244 mins Read

5 Steps for Effective Performance Management

By: Alexia Pretorius

In contrast to the traditional approach of performance management, organisations that balance stability with adaptability and form a dynamic structure that thrives on a network of teams are more successful in adapting to a constantly changing world.

Ideally these agile teams operate within a culture that prioritises individuals, nurtures fast learning and growth and supports quick decision-making, all enabled by the latest technology to safeguard opportunities for value creation. These teams open up creative flexibility to allow modern ways of work, for example, hybrid/remote working hours, in delivering quality output and overall business success.

There are, of course, challenges that the agile organisation faces.

Two of the main challenges are:

  • How do you convince employees to have individual goals, when the weight of performance is based on the team performance?
  • Who will be responsible for evaluating the individual employee’s goals, if there is no set leader/manager, as the team is responsible for producing the outputs?

To answer these challenges and to execute performance management in an agile environment successfully, one needs to consider the following five points:

  1. Creation of the right team composition
  2. Focused Goal Creation
  3. Investment in Managerial Coaching skills
  4. Continuous Performance Evaluation
  5. Modern Incentives

1. Creation of the right team composition

The key lies in creating teams that are empowered in managing themselves effectively. It starts with how and who you recruit into your business. One should consider, but not be limited to evaluating cognitive, behavourial competencies, emotional intelligence, leadership skills and technical expertise as a foundation to the make-up of the team. Agile environments require empowered teams with a high level of individual accountability.  These teams need to be skilled in decision making, support quick learning and feedback while using technology to enable them to track their progress daily.

2. Focused Goal Creation

This is the most critical step to focus on.  The teams need to be empowered and informed to make decisions regarding the business priorities.  The priorities need to be transparent to the team, so that clear and defined goals can be created through collaboration and teamwork.

  • Team Objectives and individual targets.

The team will decide collectively on the setting of objectives and key results, to deliver on the organisations business priorities and core values.   The team will also ensure that there is a sense of meaning and purpose attached to the setting of objectives and everyone will be aware of what their individual contribution and job-specific competencies are, to meet their individual targets and thus achieve the team objectives. This will ensure accountability is instilled and nurture intrinsic motivation and ownership.

  • Prioritising results

The team will prioritise results over detailed instructions and will adapt to the changing business environment when required.  This flexibility is supported by quarterly business reviews that facilitate alignment and adaptability and enhance engagement and ambition, but also foster a stronger commitment to self-set goals compared to those imposed by others.

  • Transparency and Communication in objective-setting

Transparency and clear, concise, timeous communication in objective-setting and performance metrics reduces confusion and improves overall efficiency in processes and delivery. This approach ensures alignment and fosters a culture of urgency and collaboration.

3. Investment in Managerial Coaching skills

Investment in managerial coaching skills is vital for effective performance management. Coaching skills redefine leadership roles and to remain agile there needs to be continuous feedback. Continuous feedback encourages open dialogue for feedback and development opportunities among all employees, thereby nurturing a culture of risk-taking, quick learning, and personal growth.

4. Continuous Performance Evaluation is key.

Continuous performance evaluation goes hand in hand with continuous feedback. It involves gathering feedback from multiple sources to ensure fair and balanced assessments. Emphasising individual contributions within team contexts and aligning rewards with desired behaviours and values, helps to maintain motivation and fairness.

5. Modern Incentives

Moreover, successful agile organisations look at the employee as whole and consider their individual needs and wants and place emphasis on intrinsic motivation and non-monetary incentives and opportunities for personal and professional growth, to enhance job satisfaction and retention.

In summary, by inculcating flexibility, continuous feedback, and a strong emphasis on intrinsic motivation and values-aligned behaviour, agile performance management systems create high performing, dynamic and a fulfilling work environment that leads to business success and engaged employees.

#performancemanagement #agileperformancemanagement #professionalgrowth