How to Combine Performance Management and Employee Engagement

A huge part of successful internal growth is performance management and this has seen some changes in recent years. Organizations are learning that performance management isn't just about goal setting and assessing employees, it should actually be used as a tool to drive engagement. After all, if you can't improve engagement, you can’t improve productivity. 

In this guide, we’re going to take a look at performance management and employee engagement as two separate tools, before looking at how they are intrinsically linked and how you can combine the two in your organization.

What is performance management?

Performance management is the process of ensuring a set output or activity is being achieved and is meeting the company’s overall goals. This can focus on the performance of the organization as a whole, as a specific department, as a specific team, or just as one employee. It essentially measures whether employees are reaching their targets.

What is employee engagement?

Employee engagement is the emotional commitment that workers feel towards your organization and their role within it. It’s about their commitment to achieving their specific targets and to contributing towards the overall success of the company. Employees who are engaged in their role are more productive and care about the company and the work they do there. Therefore, organizations must put effective processes in place to drive engagement and employee happiness.

How are the two linked and why is it so important to combine them?

At a glance, these seem like two very different processes. However, studies have found a direct link between engagement and performance. In fact, the more research that becomes available the clearer it becomes that engagement and performance are two sides of the same coin.

After all, the only way an organization can grow is through nurturing the skills and engagement of its workforce, so performance management without considering engagement doesn't really make any sense. As Josh Bersin explains, engagement drives performance and performance fuels engagement, thus people success equals business success.

On an individual level, we are of course responsible for certain deliverables, outputs, and results at work. But over the years, organizations have recognized that employees are not robots, they have aspirations and personal goals too and managers must therefore engage with them, listen to them, and give regular feedback. By combining performance management and employee engagement, organizations have created a new type of leadership, a new way of managing people, engaging with them, and driving the overall success of the company. That’s why it’s so important to combine the two.

How can you combine performance management and employee engagement in your organization?

There are several steps you can take that will combine these two processes seamlessly and help both employees and managers to become more engaged and productive at work.

1. Equipping managers

As we’ve discussed, combining the two has created a new type of leadership, where managers no longer simply give orders. Nowadays businesses function more like complex networks and managers must be able to support and lead their teams effectively. Using employee feedback and leadership training, you can equip managers with the skills they need to encourage open and honest conversations with their teams and to ensure everyone is happy and engaged in their role. 

2. Asking for and giving feedback

You need to be able to recognize the signs of when employees aren’t engaged; they may not be hitting targets anymore and they may seem disinterested in their work. But how can you then get to the root of the issue? Asking for feedback is an important way to find out how staff are feeling and to implement real changes that reflect this.

You must also be giving your staff regular feedback. Employees can’t be expected to know how they're getting on and how to improve if they're never told. By organizing regular catch-ups with their teams, managers can let staff know how they're doing and what they need to do to develop. Something which contributes hugely to their overall engagement and satisfaction. 

3. Goal setting

Organizations will have their set goals, be that growing their workforce, increasing profits, offering better customer service etc., so it stands to reason that all employees should have the same. Otherwise, it might feel like they're shouting into a void. They’ll spend each day working with no direction and no real indication of whether they're doing a good job or contributing to the overall success of the business.

Setting goals and updating them regularly is the key to driving engagement and productivity. These also give you measurable results so both managers and their teams can see what needs to be done to move forward.

4. Performance reviews

Performance reviews have been around for decades and they don't seem to be going away. These give managers a formal opportunity to discuss the progress of their employees and to offer advice and objectives on how to take things to the next level. They also offer a good opportunity to promote employees who hit all their targets and are ready to take the next step within the organization.

5. Rewarding employees

One way to directly link performance and engagement is by rewarding your employees for their hard work. This can be done on a monthly, quarterly, or yearly basis, perhaps in the form of an ‘employee of the month’ scheme or annual bonuses for hitting targets. This shows your appreciation whilst giving them the drive to continue working hard and reaching their goals in the future.