Benefits of Performance Measurement

Continuous performance management involves ongoing, check-in meetings throughout the year, along with real-time feedback to improve employee performance on a regular basis.

As technology advances and our understanding of human motivation is improving, organizations are moving away from the once-a-year review practice, and now using continuous performance management to align with and motivate employees. It accelerates performance by giving employees a direct line of sight into how their work impacts company goals and also ensures everyone is focusing on important company priorities.

Businesses are also beginning to realize the disadvantages of the once-a-year annual review format and are looking for new ways to keep their employees motivated and their morale high.

All of the above-mentioned continuous performance management activities and actions deliver the following benefits.

Provide Rationale for Decision Making

The overall goal of Performance Management, regardless we use Traditional end-of-year review or Continuous Performance Management is to aid in the Decision Making. Whether this decision is about financing a project, hiring employees, opening new branches or increasing stock levels.
Therefore, experienced and professional teams favor those Performance Management metrics that help them to take informed decision. Because informed decision success ratios are much higher than those of impulsive and those not backed by data.

Value Optimization for End Customer

Do not confuse this in CVO – Customer Value Optimization from a marketing field, where organizations focus on raising the value of their customers to grow their businesses. On the contrary, Value Optimization from the perspective of performance management is about building work and business in a way that helps to serve the customers in a better and more productive way, which in return generates higher customer satisfaction.
Not all the projects and tasks we undertake are helping to create value for our customers. If we rate them, using scoring systems we would have some very interesting data and would be able to prioritize some, that are critically important for customers and some that we do for satisfying other stakeholders that can be postponed or even canceled.

Maintain Focus

Objectives set by organization based on Critical Success Factors are the destinations for all efforts put by all the elements of the enterprise, nevertheless due to local and external or micro and macro factors individuals and teams veer off the course towards meeting organizational goals.
Continuous Performance Management helps to prevent inefficient utilization of resources in a way that does not contribute to meeting strategic goals whether on individual, functional or entity level.

Identify Trends

Identifying trends is one of the key benefits of Performance Management. It helps the organizations to identify trends that can influence the enterprise in a positive or negative manner.
Positive trends usually get more support and resource allocation in order to strengthen and sustain them. In addition, these desirable trends can be studied and useful behavior patterns extracted to be applied for future similar projects.
Whereas, using continuous performance review, negative trends can be identified at early stages before it is too late and organizations objectives are not completely failed, and surely lessons learnt are used by smart organizations to prevent reoccurrence and eliminate escalations in future projects.

Highlights Training Needs

ntroducing more frequent reviews, whether formal or informal, can help to better understand the skillset of employees. Providing an open forum for employees to share and discuss their roles regularly can help to identify training needs before they have an impact on productivity.
Whether your employees need to brush up on a certain skill or simply get up to speed with new trends for their role; performance management and regular reviews can help to identify any shortcomings or future training requirements.

Creates more Engaging Work Environment

A continuous performance management system provides an open forum for managers and employees to interact, share, and discuss their roles regularly. This can help tremendously in helping to identify any shortcomings or training requirements.
It helps employees understand how they are performing and what they can do to improve, and if it does require improvement, another question can be answered – “why does it need improvement?” is it because employees need to develop their skills or because of gaps within the organization.
Once these are identified, the company can provide training to the employees to develop their skills so that they have the knowledge and experience they need to deliver quality performance, or if the company should hire new members into the team who meet the skill set requirements.
It also allows employees them to give feedback on their managers and company. When both sides can give and receive feedback continuously, the employee and management both benefit, which renders the performance management cycle more effective.
Continuous performance management helps create a good rapport between employees and their managers, allowing for a continuous cycle of improvement.

Recognizes Employee Productivity

Happy employees are more productive and work harder if their performance were being recognized. Regular feedback and reviews are important in keeping employee morale high.
A continuous performance management system provides the perfect platform for formal recognition of performance. Everyone likes being told when they’re doing a good job and benefits from having their achievements and accomplishments recognized.

Increases Employee Retention

Understanding what motivates an employee and formally recognizing their efforts can help management decide the best way to reward their performance. This, in turn, will help retain employees. According to HR Daily Advisor, companies that implement regular employee feedback have turnover rates that are 14.9% lower than for employees who receive no feedback. Employees who feel unacknowledged and poorly managed don’t stick around. They look for challenge and recognition elsewhere.
Regular feedback sessions allow employees to raise and resolve issues. When these open, ongoing, fluid conversations with management are a part of work culture, employees can express opinions and issues freely and it ceases to be awkward. Also, managers are kept in the loop about the team’s performance and of any issues.

Facilitates Goals Setting- the SMART way

A continuous performance management system can help modify and update goals according to the performance of the employee, team, and organization. The system adapts to the changing business environment, and ensures that the goals are dynamic and evolving – this is very important to actualizing the very essence of continuous performance management.
An effective performance management system helps define an employee’s SMART goals within the workplace, eliminating any ambiguity or confusion regarding goal setting. When employees get clarity on what their goals are and what is expected of them, it encourages them to be more involved in the organizational goals. This ultimately makes it easier to arrive at the right objectives for the organization as a whole.
Continuous performance management is intensitive, however the benefits of this method are worth the effort and commitment from your company.