As the economy picks up and companies begin to shift focus from maintaining financial stability to cultivating employee growth, performance management will prove to be a key way to enhance employee engagement and job satisfaction.

Pamela Stroko, an HR expert at Taleo, a provider of Web-based candidate screening and recruiting software, spoke recently about what goes into a successful performance management program.

"Performance management is at the core of engagement and business results," Stroko said, adding that performance management should be introduced as early as the recruitment and onboarding process. "Within the first 90 days, the manager should have a conversation that says, 'Here's what your role is and here are the results you have to deliver.'"

Stroko said that an employee engagement conversation should take place at least once a quarter.

"The first quarter is about setting goals, the next one could be a development plan and then the third quarter could be a mid-year check in," Stroko said, with the last quarter check-in including an assessment.

According to Gallup, companies that have top quartile engagement scores significantly outperform companies in the bottom quartile with over three times the earnings per share growth, 18% higher productivity and 12% higher profitability.

So where does the journey to better performance management begin? Storko outlined six steps of implementing an effective performance management strategy.

First, she said, employers need to "build the foundation. You have to look at where you are today. If you're really going to rate performance management, you have to rate whether or not you have clear job descriptions - if you have them written in behavioral terms and [clearly state] what 'good" is." Stroko said.

Step two is creating a multi-year plan. "You want to implement new performance management process, so you're going to have to put in place some change approach to move the organization toward that vision," she added.

Third, Stroko emphasized the importance of educating managers. "They're the key to great performance management. Oftentimes, we haven't developed them to be coaches and help with development planning," Stroko said. "They need training on what a good feedback discussion looks like."

Step four involves creating strategic goals based on the goals at the top of the organization, with no more than four goals at the top that cascade down to rank-and-file workers.

Fifth, compensation and development programs are crucial to engaging employees to produce better performance. "There should be a development conversation that is connected to learning. There is a strong connection in performance between what the business is trying to achieve and the work that is done at the individual level," said Stroko.

The final step involves gaining employee feedback so that managers are "accountable for driving performance. Set clear goals, then put plans in place. Connect learning to development planning," she said.

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