by Melany Gallant for Halogen Software’s TalentSpace blog. To read the complete article, check out others, learn more about the firm, and sign up for email alerts, please click here

What is performance management?

Performance management is a process that provides feedback, accountability, and documentation for performance outcomes. It helps employees to channel their talents toward organizational goals.

That’s a fairly straightforward explanation, and you’ve likely heard it phrased in a few different ways covering essentially the same material.

However in defining terms like this, what isn’t always brought to light is ownership and responsibility for the program. So let’s talk about that for a moment.

Who owns the performance management process and its success or failure?

Hint: It isn’t just the responsibility of the HR department or people managers. Your entire organization is accountable.

And, organizational culture affects how performance is managed. If your company’s culture doesn’t reflect that cross-organizational accountability, then performance management will fail.

Good HR leaders who have their fingers on the pulse of their organizations will intuitively know which areas of performance must be addressed. But even the best talent programs won’t work if your people managers and your employees aren’t held accountable for participation.

Why is participation so important? Because investing the right amount of time, effort, and resources in performance management can yield results:

o 22% higher shareholder returns (McKinsey)
o 30% increase in company value (Watson Wyatt)
o 19% increase in operating income (Towers Watson)

What can HR do to drive high performance in your organization?

Set clear goals and expectations – Ensure personal goals in some way contribute to the achievement of the organization’s high level goals. Give your managers and employees (since they should participate in writing their own goals) annual training on how to write effective goals. It’s not an easy skill to master, and we easily forget how to do it well. And make it a priority in you organization to regularly communicate the progress and status for high level organizational goals.

Tip: Provide a sample of an effectively written goal (aka SMART goal) on your review form.

o In terms of setting expectations, make sure managers and employees review goals set for the year. Use organizational and job-specific competencies to clarify expectations and help describe what it takes to be successful in a role.

o Provide regular feedback – Think of feedback and recognition as an investment in future performance. Have managers provide both formal and informal feedback and recognition. Managers should clearly tell employees what they are doing well, and why the behavior is valued (impact on team, organization, customer, etc.).

o Feedback should clearly tell what behavior needs to change/improve and why (impact on team, organization, customer, etc.). Feedback should include a specific example of when the behavior in question was demonstrated (no generalizations!).

Support employee development and success– Building organizational bench strength is just good business. By investing in your employee’s development, you ensure your organization has the built-in knowledge skills and experience it needs to succeed, both today and tomorrow. It’s also a critical way to drive up employee retention.

Remember, development can take many forms: mentoring, job shadowing, volunteer work, lunch and learn sessions, reading books/journals/blogs, coaching, cross-functional team assignments, webinars, podcasts, etc. Managers (and HR) should engage employees to identify the learning activities most appropriate to their needs.

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Melany is a Certified Human Capital Strategist and the Halogen Software blog manager responsible for coordinating our authors’ posts and providing social media insight as it relates to HR strategy and organizational objectives. For the Halogen blog, Melany writes about tips and best practices for driving employee motivation, performance and development. She is a total book nerd and a die-hard fan of her family and chocolate