Implementation of Enhanced Metrics with Performance Management Systems

Posted by Shy Lee on July 24th, 2019

When the volatile nature of market requirements is considered, the businesses have turned to the rationalization of the performance management of each employee regardless of the profile. Traditionally, the industries didn’t feel the requirement of optimization in output measurement in each department or employee. Since the market has become client-driven and the competition has left the consumers with choices in abundance. The steep increase in the cost of operation has mainly contributed to the current situation. Therefore, a scientific approach to the subject was sought, and the Performance Management Systems will prove to be game-changers because of their tailored approach to each individual profile. This leads to the development of independent metrics for the work profiles and enhances the process of performance measurement — all the parameters affecting an employee’s performance in a direct or indirect manner. Personalized attention makes a lot of difference in the organization’s ability to utilize the employees at optimal levels. We shall have a look at the application of PMS for implementation of enhanced metrics in the business environments.

Performance parameter Acquisition and Configuration for Job Profiles

There is an existing system of approaching all the work profiles in every company. These metrics have a multitude of limitations as they are developed in a similar manner for all the work profiles. In reality, no two patterns have the same parameters, and they cannot be assessed on the basis of the universal standards. The PMS shall acquire enormous data from each employee in the form of daily reporting of work. The HR can set the KRA, and KPI components for each job profile and the PMS shall calculate the performance percentage on the basis of these standards. The computation will also generate new rules by correlating the aspects which help in the effective utilization of the employees. The improved metrics are acquired by the system, and they are initially screened for being relevant to the company. When the analysis is approved by the HR executives, these new matrices are included in the process of evaluation. HR can make changes in the configuration accordingly. Therefore, optimization is made possible.

Integration of Performance with Pay Policy and Incentivization of the Positive Traits

The newly acquired performance metrics for each profile are integrated with the pay policy by defining the performance levels. These levels are set on the basis of the employee’s experience and the productive output of the work. The bifurcations are made on the basis of the established benchmarks in the industry. The pay policy shall accommodate the variable part of the salary on the basis of the individual achievement of the employee apart from the criterion established by the employer. The behavioural patterns are also assessed, and the traits useful for the organization are identified with the help of PMS. Once the identification is made, the company can incentivize those traits to align the individual goals with the company’s business interests. The emergence of such policies will help in shaping a positive work culture as the employees are motivated to improve their working patterns to increase their efficiency. The incentivization can be kept of both financial and non-financial types as per the Maslow’s law of hierarchy of needs. 

Talent Nurturing and Higher Employee Retention

The use of tailored performance indices can be made in the process of developing the employees’ competencies in a methodical approach. When the employees exhibit a particular level of efficiency and team management competencies, they can be promoted to higher designations.

The staff members who have aptitude in multiple domains can be identified and cultivated as multi-departmental assets. They prove to be very efficient cross-departmental managers. The use of PMS based metrics will help in managing every employee on an utterly personalized basis. The appraisals and promotions made in this manner are fruitful to the company, and they also contribute to higher employee retention rates.

Therefore, we can deduce that the introduction of better indices for output measurement adds a fundamental advantage of tailored work monitoring. The dedicated automation-based employee performance management system will help businesses in managing the utilization of all resources with minimum human intervention at all levels. They also improve the company’s outlook on the entire profitability management of the business.