Why Performance Management Requires Leadership

You can’t have a performance management system without someone that oversees the everyday happenings around the office. However, just because the organization’s management has a hand in the performance of their employees doesn’t mean that’s where the buck stops. Organizational leadership has to be involved in the performance management system as well, as they ultimately dictate the performance culture of the organization. Performance reviews give leaders the information they need to analyze the data and help improve their team’s performance. They promote high-performance standards through regular performance feedback and goal-setting through coaching. Organizational leadership has to set these changes in motion.


1.  Leadership needs to focus the team
There are many moving parts to performance management that need oversight including aspects like performance reviews to make sure employees stay on track. As a leader, your responsibility in any given performance appraisal is to motivate, coach, and mentor through effective means of communication and recognition. SHRM defines performance reviews and performance improvement as a standard for performance management [1]:

“The most comprehensive application of a dynamic performance management system occurs when the cause and effect connections of current performance are used to define and align future performance. In the field of human resources, the latter connection can be achieved by incorporating the concepts of goal setting and performance improvement plans into the feedback processes of a performance management system.”

2.  The team needs leadership to create a performance strategy
Your employees need to understand where their team is headed. That means as a leader, you have to be the one that gets them to that end point. Unfortunately, however, 55% of organizations say that the business leadership is not entirely engrossed in performance management as they should be [2]. Employee alignment, goal coordination, and subsequently strategy suffer when leadership takes a step back from performance management integration.
When leadership has an active role in performance management and creates a strategy for their system, employees are more likely to stay on track with their personal goals as well as organization goals. Not to mention, their managers take accountability for their team’s overall alignment and correct performance issues as they arise. A strategic performance plan keeps the entire team focused on one end goal.
3.  Leaders track and analyze performance data
Even though leaders may not aggregate these numbers themselves, they are responsible for understanding what these numbers mean for the performance of their team and the overall success of the organization. With the plethora of talent management systems, 56.3% leadership has begun to recognize the need to integrate their performance management and plan to do so in the next 12 months [3].
Aspects of the performance management system like employee performance reviews can shed light onto practices that need to be altered or areas where employees need training across the board. Unfortunately, the performance appraisal process isn’t approved by everyone; 58% of employees said it wasn’t an effective use of anyone’s time [4]. With communication and collaboration as a part of the company culture however, you can ensure this data and the changes that are made thereafter stick and actually improve the performance standards throughout your organization.
Leadership needs a heavy hand in performance management. Organizational leadership sets the standards for employee performance standards and company culture quality. Your employees look to you to set examples and to keep them focused on achieving company goals. You can’t do this without an effective performance management strategy and the information to track from that performance management system. Through a strategic performance management system, leaders can identify developmental and training needs throughout the organization and adjust their programs accordingly.

Download: Conduct Effective Performance Reviews

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