Performance management, commonly associated with annual reviews and employee development, serves another critical function that often goes unnoticed: acting as an audit mechanism. This internal audit ensures that employees’ contributions align seamlessly with the company’s plans and goals. This article highlights why performance management is indispensable for gauging such alignment and how it contributes to organisational efficacy.
1. Setting the Benchmark
Defining Company Objectives
Before auditing alignment, it’s crucial to understand what the company aims to achieve clearly. Performance management aids in setting these benchmarks, providing a reference point for subsequent evaluations.
2. Continual Assessment
Monitoring Through Milestones
Effective performance management is an ongoing process, allowing regular check-ins to ensure employee activities align with company goals. These continual assessments can include quarterly reviews, project post-mortems, or even ad-hoc meetings to discuss progress.
3. Identifying Deviations
Early Warning Signs
Through regular assessments, performance management helps spot any deviations or inconsistencies early on. This early identification enables timely corrective actions, preventing potential misalignment from snowballing into more significant issues.
4. Facilitating Realignment
Performance management offers a structured framework for feedback. If necessary, employees receive insights into how their performance measures against company objectives and actionable recommendations for realignment.
5. Data-Driven Decisions
Performance metrics and KPIs (Key Performance Indicators) generated through performance management can offer quantitative data, providing empirical evidence for alignment or lack thereof. This data-driven approach enhances the credibility of the audit.
Implementing Performance Management as an Audit Mechanism
Various software solutions are available to automate the auditing process, enabling real-time tracking of performance metrics against predefined company goals.
Managers should be trained to conduct effective performance reviews focusing on employee development and alignment with company objectives.
Higher alignment often correlates with increased employee engagement, which can be measured through regular surveys.
An effective performance management audit should reflect improved business metrics such as increased revenue, customer satisfaction, or market share.
Performance management is a multi-faceted tool that goes beyond individual appraisals to act as an organisational audit mechanism. Setting benchmarks, enabling continual assessments, identifying deviations, and facilitating realignment ensures that employees’ activities resonate with the company’s plans and goals. This role of performance management as an internal audit is indispensable for maintaining strategic alignment and, thereby, ensuring organisational success.