August 16, 2021

By: Henry Malone

For many employers of a given business or organization, performance evaluations can be a difficult undertaking. Performance evaluations of your employees forces you to eliminate any biases in your judgement process and to make honest and fair assessments of their work over a certain period of time (i.e. quarter, half-year, year).

However, evaluating and managing a business’s performance extends well beyond promotions, raises, and reassurances of doing a good job. Monitoring and improving performance can pay significant dividends over time, while not doing so can severely irreparably set back your company.

Here are some of the reasons why performance management is so crucial today.

Provides a look into the future

Staying on top of your employee’s habitual work ethics can have a profound effect on your company’s productivity and future growth.

Allowing poor work habits to develop can lead to poor work tendencies, and eventually patterns of inefficiency can manifest and become difficult to break your employees out of. Sound performance management can help mitigate much of this risk. Identifying some of these issues as soon as possible is an important aspect of the process, to not only minimize the impact it has on the company’s output, but also to nip a lot of those bad habits in the bud. 

For someone who consistently submits projects behind schedule, a company can identify this weakness and help that individual develop better time management skills. For other weaknesses such as difficulty working within a team, an employer can detect this and assign that certain individual to a more individualistic role. 

Rooting out several of these potential problems before they have the opportunity to become legitimate issues can save your company and avoid any unnecessary trouble.

Encourages recognition and reward

For as much as performance management can root out issues within your workforce, it can also bring attention to some of the great work that your employees have done.

For employees that put significant effort into their work, often the lack of recognition for that hard work can result in frustration and a desire to want to go work for a different employer that will be more appreciative of their efforts. Therefore, giving back that recognition for activities worthy of encouragement and rewarding them can reinforce a mindset that will continue to yield productivity from employees.

Employees that receive rewards are far more likely to remain with their current employer as well, with that added aspect of retention boosting continuity within your staff. According to a survey by American Express, a third of top businesses believe that recognition and reward lead to higher staff retention.

Boosts employee feedback 

Performance evaluations and management can often seem to be a one-way street, with the employee being the one receiving all the feedback while not getting the opportunity to share their own opinions on their superior.

An effective performance management system ought to allow employees to share their concerns or frustrations, which not only allows their employers to gain a better understanding of their employees but also makes the employee and their opinion feel more valued.

In general, maintaining a strong ground for communication can only prove beneficial in professional relationships, with the lack thereof typically leading to trouble.

For more information on the importance of performance management, visit this resource from Tech Funnel, and for ways to better manage performance within your organization, check out Clear Impact’s Scorecard and Compyle management software.

About the Author:

Henry Malone received his B.A. in journalism from the University of Maryland, College Park in 2021. There, he served as Deputy Editor for the University newspaper, the Testudo Times. As a marketing and journalism intern for Clear Impact, Henry researches, writes, and edits website content and news articles focusing on the nonprofit and public sectors.