Why do people matter more than results? No people, no results! Effective performance management can only exist with a good performance culture. It is the combined effect of the two that makes the difference. All companies practice performance management – but only a few succeed in building an authentic performance culture.
Read this article to learn more about performance management and performance culture, and why people should always be at the heart of it.
Performance culture is goal oriented. More specifically, it is the goal people have in mind when striving to perform well. Developing people’s talents and motivating the organization through a common purpose is crucial to building a performance culture. What is this common purpose? It’s to improve the performance of the whole organization.
What is performance management and performance culture?
Performance management is the ongoing process of communication between management and employees to achieve strategic goals. The process is linked to other organizational systems, including strategic planning, team development, compensation, succession planning, and HR technology. However, the key to good performance management is and remains the people.
Forbes defines performance culture as “a high performance or growth culture that fosters an environment in which employees: strive to improve themselves to make the most of the situation they find themselves in with the resources available to them.”
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Why is performance management so important?
Fast-moving business landscapes require effective performance management. With new trends emerging every year, HR must continually evolve to meet the demands of this dynamic work environment.
Failure to understand new trends leads to demotivated and disengaged employees, resulting in poor business performance. The good news is that more and more companies are waking up to the importance of performance management. However, to improve overall business performance, it is crucial to understand what performance management is.
Goals at the heart of performance culture
Linking personal values and job performance is a game changer. When focusing on performance management rather than performance culture, people lose sight of the bigger picture and their role in the organization’s goals. But people want to be part of the big picture!
McKinsey research has shown that people who believe their work has meaning are four times more engaged. Nothing is more motivating than the feeling of being part of something bigger. No performance review can beat the motivation of seeing your work impact a common goal.
Gallup research has found that “a 10% improvement in employees’ commitment to their company’s mission or purpose leads to an 8.1% reduction in turnover and a 4.4% increase in profitability“.
How to start building an effective performance culture
There are three ways to start building a performance culture. First, determine how you will measure your success in this process, for example, by measuring employee engagement. Then use survey and feedback tools to assess the current situation and set goals. Finally, give employees the tools they need to build good relationships, including those between managers and their peers.
Performance management is more about data than culture. It needs to be more product-oriented and focused on developing the organization and its people. The company should look at performance management not as a piece of paper where each item on a list is ticked off but to translate them into something concrete in the performance culture.
