Which is Better – Performance Management or Performance Reviews?
Categories: Blog, Human Element, Performance Evaluation
Feeling like your team is disengaged, lacking motivation, or merely showing up to put in a few hours of work each day? The problem could lie in your performance evaluation system. Effective leadership is often overlooked as emphasis is placed on the annual performance review. You can take your firm to a higher level of standards and accountability by burying annual reviews and adopting a targeted performance management system.
Active leadership encompasses a continuous learning and development program with mini reviews throughout the year. Performance management is an essential tool for top performing advisory firms. This requires time and effort, but will improve overall effectiveness and can increase positive outcomes.
Why Annual Performance Reviews Don’t Work
Annual performance reviews have become a habitual line item in employee handbooks; promising team members one review each year. For most, it’s a dreaded process that is done only out of obligation or outdated processes.
Annual reviews are typically based on a scoring system that provides no direction to employees or the firm. They fail to encourage personal development, damage trust in the workplace, and don’t harmonize with the vision, mission, and goals of your firm. Additionally, annual performance reviews hinder the opportunity for managers to provide constructive and valuable feedback that will encourage team member growth.
Benefits of Performance Management
Performance management systems will:
- Encourage personal and team development
- Provide a roadmap for intentional success
Performance management will strengthen the foundation of your firm by:
- Ensure goals are consistently met
- Provide focus on fundamental areas in your firm
- Clarify job expectations and responsibilities
- Improve communication
- Compel employee behavior to align with your firm’s mission, vision, and goals
- Enhance employee engagement and productivity
How to Implement a Performance Management System
The process of implementing a performance management system is highly detailed. Here are a series of steps to get you started:
- Update job descriptions that include the purpose, duties, and responsibilities
- Set performance goals that are measurable
- Prioritize each job responsibility and goal
- Define performance standards for each component within the job description
- Schedule meetings with employees to review performance and provide feedback
- Document a record of performance
- Implement a learning and development program readily available for employees
- Incorporate the opportunity to gather feedback from employee peers and/or clients
Encourage human resource departments, managers, and supervisors to be accountable for performance improvement. All components in your firm are part of a system that creates value for your clients. The same holds true with a performance management system in that all components must be functioning to create value for your employees and the firm.
Request more information from the Ironstone team or join the Ironstone – Financial Industry Professionals Practice Management Group on LinkedIn and start a discussion.
The foundation of our Performance Coaching and Consulting Programs are based on Ironstone’s Fundamental 4™, which is essential to design, develop, and sustain a successful business. Our ultimate goal is to help you avoid trial and error; shifting your mindset to launch your process of intentional change. [LEARN MORE]
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