Performance Management and Talent Management

 Performance Management and Talent Management



Image Courtesy of McKinsey.com

Performance Management is a necessary part of Talent Management in term of following and improving employee performance.

Performance Management contribution are;

  • ·      Clear and expected goal that employee is going to achieve.
·      Establish communication channel for employee feedback
·      Recognize high performance and address low performance issues
·      Setting fair standardize criteria for performance evaluation and give constructive comments
·      Implement Performance improvement plans, raise, promotion, termination.
·      Set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals to assist employee growth.

managing employee performance led to improvement in employee performance, customer satisfaction, overall organization talents to grow and retain.

 

According to 2018 McKinsey analysis on People Performance Management,  

Employees perform the best, when performance management system is perceived as fair by employee and Management. In order to create positive and effective performance management with fairness in the system, HRM and Management need to implement these three Performance Management practices; Effective Coaching by manager, Goals linked to business priorities, Differentiated compensation.

 


Graph Courtesy of McKinsey.com

 

Effective coaching by Manager

Managers are important aspect of employee performance; they are responsible for employee engagement. HRM need to implement Ongoing training of Manager coaching program and feedback to have better Managers in organization. It improves Mangers to be effective in communication, leadership, coaching and managing their role to improve employee performance. Effective manager performs better coaching of employees and communication with employees and its lead to improvement in Performance Management system and its fairness.

Goals Link to Business Priorities

HRM need to Align Performance Management Goals to Organization priorities and strategies. 2017 Mckensy Study found that Performance Management goals need to revisit more than once per year to be effective.  Linking employee performance goals and Organization priorities create higher level of perceived fairness. HRM need implement strategy that how individual performance are contribution to achieve Organization common goals and strategy. The regular review of Performance Management goal and Organization Priorities, ensure positive impact on Employee Performance.

 

Differentiate Compensation

Unfairness rewards and compensation result in lower employee engagement and higher turnover. HRM need to have strategy to have meaningful compensation differentiation among low, midlevel and high performers for fairness and positive performance management. HRM need to recognize and compensate top talents for employee retention and Organization competitiveness. HRM need to utilize performance management technology to monitor, support, coach top talents for optimizing goals and performance, professional development and new opportunities, and compensation packages to engage and retain in organization.

 

Conclusion

Performance Management is essential part of Talent Management Strategy of Organization. Performance Management streamline effort of HRM and Management function in identifying Performance and skill gap, Talent Development and achieving Organization goals efficiently. By having better train Manager, Performance Management goals that aligned with Organization, differentiated compensation, perceived fairness in Performance Management system, all these allow to attain employee engagement and retention.

 

References:

Betterworks (2018). McKinsey Shares Their 3 Silver Bullets of Performance Management. [online] Betterworks. Available at: https://www.betterworks.com/magazine/mckinsey-shares-their-3-silver-bullets-of-performance-management/./.[Accessed 15 Dec. 2023].

‌Chowdhury, S., Hioe, E. and Schaninger, B. (2018). Harnessing the power of performance management | McKinsey. [online] www.mckinsey.com. Available at: https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/harnessing-the-power-of-performance-management. /.[Accessed 15 Dec. 2023].

‌Gurung, P. (2022). Talent Management vs. Performance Management: What’s the Difference? [online] Great Learning Blog: Free Resources what Matters to shape your Career! Available at: https://www.mygreatlearning.com/blog/talent-management-vs-performance-management/#What%20is%20performance%20management? [Accessed 15 Dec. 2023].

‌Mckinsey (2023). What is talent management? | McKinsey. [online] www.mckinsey.com. Available at: https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-talent-management. [Accessed 15 Dec. 2023].

‌Pollock, S. (n.d.). 7 Key Components of Talent Management | ClearCompany. [online] blog.clearcompany.com. Available at: https://blog.clearcompany.com/what-are-the-key-components-of-talent-management#:~:text=What%20Are%20the%20Key%20Components%20of%20Talent%20Management%3F [Accessed 15 Dec. 2023].

‌Villegas, F. (2022). Talent Management: What it is, Process & Key Components |. [online] QuestionPro. Available at: https://www.questionpro.com/blog/talent-management/.[Accessed 15 Dec. 2023].

‌Vulpen, E. van (2019). What is Performance Management? A Full Guide. [online] AIHR. Available at: https://www.aihr.com/blog/what-is-performance-management/./.[Accessed 15 Dec. 2023].

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