People are the most valuable assets of any organization. Performance Management is about maintaining a high-performance workforce that delivers effectively and efficiently. Companies realize this and understand just how important employee performance and development in the context of individual and organizational objectives is to keeping up with today’s ever-changing market.
In order to ensure that employees execute work that is up to standard, companies typically employ performance management systems, helping them assess how each employee performs over the course of a specific period. Performance management aids an organization in determining which employees to reward for exemplary work and also what areas need to be worked on by each individual for further development.
The most common method of performance evaluation or appraisal is the downward evaluation, or evaluation done by a superior on a subordinate. A more holistic approach to performance management, however, is offered by 360-degree evaluation. This type of system takes input from a variety of evaluators, including subordinates, peers, customers or even the evaluatee himself, minimizing the danger of having biased results. It provides a more accurate look into the strengths as well as the weaknesses of each employee.
The 360-degree performance evaluation is a tool typically used to determine gaps between an organization’s current state and the state it wants to be in. It involves collecting perceptions about the organization’s employees’ behavior and how it affects all the people they interact with – superiors, peers, subordinates, even customers and suppliers. Through this assessment, an organization is able to determine how roles are played by specific employees and how this affects their individual performance, the team’s performance and the organization’s performance as a whole.
Once accomplished, multiple action plans may be derived from the findings. Behavior and competencies that are not in line with company goals and objectives may be singled out and interventions may be designed to address them. This may be accomplished in an infinite number of ways, some of which include restructuring, implementing training programs, and adjusting development plans.
Due to the delicate nature of this type of evaluation, it is typically recommended that it be begun from top management and be cascaded down the ranks after successful initial implementation. This model helps ensure that middle management becomes more open to the idea of being evaluated by peers and subordinates.