Which is Better – Performance Management or Performance Reviews?

Feeling like your team is disengaged, lacking motivation, or merely showing up to put in a few hours of work each day? The problem could lie in your performance evaluation system. Effective leadership is often overlooked as emphasis is placed on the annual performance review. You can take your firm to a higher level of standards and accountability by burying annual reviews and adopting a targeted performance management system.

Active leadership encompasses a continuous learning and development program with mini reviews throughout the year. Performance management is an essential tool for top performing advisory firms. This requires time and effort, but will improve overall effectiveness and can increase positive outcomes.

Why Annual Performance Reviews Don’t Work

Annual performance reviews have become a habitual line item in employee handbooks; promising team members one review each year. For most, it’s a dreaded process that is done only out of obligation or outdated processes.

Annual reviews are typically based on a scoring system that provides no direction to employees or the firm. They fail to encourage personal development, damage trust in the workplace, and don’t harmonize with the vision, mission, and goals of your firm. Additionally, annual performance reviews hinder the opportunity for managers to provide constructive and valuable feedback that will encourage team member growth.

Benefits of Performance Management

Performance management systems will:

Encourage personal and team development

Provide a roadmap for intentional success

Performance management will strengthen the foundation of your firm by:

Ensure goals are consistently met

Provide focus on fundamental areas in your firm

Clarify job expectations and responsibilities

Improve communication

Compel employee behavior to align with your firm’s mission, vision, and goals

Enhance employee engagement and productivity

How to Implement a Performance Management System

The process of implementing a performance management system is highly detailed. Here are a series of steps to get you started:

Update job descriptions that include the purpose, duties, and responsibilities

Set performance goals that are measurable

Prioritize each job responsibility and goal

Define performance standards for each component within the job description

Schedule meetings with employees to review performance and provide feedback

Document a record of performance

Implement a learning and development program readily available for employees

Incorporate the opportunity to gather feedback from employee peers and/or clients

Encourage human resource departments, managers, and supervisors to be accountable for performance improvement. All components in your firm are part of a system that creates value for your clients. The same holds true with a performance management system in that all components must be functioning to create value for your employees and the firm.