Companies use performance management systems to evaluate employees' efficiency at work and ability to perform certain tasks, either by automated or human processes. These systems come in many varieties, and every company will tailor its performance management system to fit its specific needs. However, there are certain aspects common to all effective performance management systems.
If your evaluation criteria and methods are not standardized, you cannot say that you use them to hold your employees to a "standard." The aspects of performance that you measure must be uniform, and you must strive to maintain a constant level of strictness. Varying your level of strictness or your methods will only lead to your employees lacking faith in their managers and in the system itself.
Performance management systems should only measure what is valid to the tasks at hand. Less is often more when it comes to selecting evaluation criteria. If you are evaluating customer-service representatives in a call center, do not evaluate them on their ability to operate heavy machinery.
Make sure that you are not evaluating your employees in an illegal manner. Consult an attorney before employing a questionable method of evaluation.
As with criminal investigations, if employees receive sub-par evaluations, give them the chance to defend themselves. Make sure that management adequately informed them of expectations, that the company provided them with all necessary resources and that there is no mistake in the evaluation. Even in cases where employees are performing at an unacceptable level, allow for redemption and reform.
No performance management system can succeed when those carrying out evaluations are inadequately trained. Make sure that your evaluators fully understand the responsibilities of those whom they are evaluating. Have them work in that capacity for a short time if necessary. When possible, have those who have proven their ability to work well in that capacity perform the evaluations.
Do not reward evaluators for finding negative or positive results, as this will skew their evaluations in either direction and lead to distrust between your employees.