How Performance Management Can Turn Managers Into Leaders

How Performance Management Can Turn Managers Into Leaders

Performance management is about a whole lot more than inspiring employees to improve and progress. While many articles on performance management focus on how to encourage higher performance among employees, effective performance management can also promote great leadership. In turn, this will have a beneficial impact on employee engagement, morale and retention.

Specifically, performance management can help to transform managers into leaders, which is something we should all want for our organizations. After all, real leaders are inspirational, they’re visionaries, they are willing to take risks, they know how to build relationships, and they’re aware of and willing to work on their weaknesses. Managers, on the other hand, are simply authoritarians who are one of the leading causes of voluntary employee turnover.

Below are just a few ways performance management can create motivational leaders.

1. Improving leadership communication

When an employee gets promoted to a managerial position, we can’t just assume they will have all the skills necessary to effectively communicate with and inspire their team. A carefully thought-out performance management system will have training in place to ensure managers deliver constructive feedback, engage in meaningful performance discussions, and ask the right questions at the right times.

Certain employee performance management tools, such as regular performance discussions, can go a long way in strengthening a manager’s communication skills. Frequent communication means managers become more familiar with their team and better able to detect behavioral changes that could affect performance. This increased trust between employee and manager can turn an average manager into a motivational leader. 

2. Increasing authenticity and transparency 

Is transparency a respected and encouraged quality in your organization? If you require honesty and authenticity from your employees, you need to return the favor and ensure your business is an open book. As Zappos CEO Tony Hsieh says, all companies should be concerned with building “open and honest relationships with communication,” as increased transparency eliminates divisions in a company and improves collaboration.

If you’ve always operated under the belief that employees only need to know about issues that directly relate to them, it can be hard to get out of this mindset. However, certain performance management tools and processes can help you turn things around. 

Firstly, during your regular one-on-ones, be sure to give your employees context. Discuss the company’s direction, the struggles it is facing, and how each employee can help in their own way. This will empower your employees and give them the incentive to work harder.

Secondly, frequent performance discussions allow manager and employee to relax around each other and discuss performance issues in a more informal manner. Employees will get a deeper understanding of who their leader is and what they stand for. This will encourage feelings of respect and support, which will inspire an atmosphere of teamwork.

Finally, when creating SMART objectives, rather than using the old-fashioned performance management approach of cascading objectives downward, you should encourage employees to align their goals upward. This means they need to know all about the company’s goals so they can decide what they can do in their role to support these goals and set their own objectives accordingly. This transparency will give employees a greater understanding of their roles in the company.

3. Encouraging feedback

There is no space for fragile egos in business. If an employee feels that improvements can be made in an existing process or in the way a manager interacts with employees, they should feel comfortable giving this feedback. Just as importantly, managers should welcome and embrace this feedback. This is a quality that turns a manager into a leader.

In each performance management discussion, managers should make it a point to ask employees for feedback. This demonstrates to your workforce that their input is valued, and it will also vastly improve your business. The more open managers and employees are on the topic of feedback, the more it will become a part of your company culture. 

4. Fostering humility

One of the hallmarks of leadership is understanding that every member of your team is as valuable as the next – and that includes you. As a leader, you are no more important than the people you lead. With the right processes in place, managers can be encouraged to set aside their own pride while embracing team achievements. Everyone’s contributions matter to the bottom line, which is why employee recognition is so important. Consider setting up a recognition program to make sure employees feel appreciated for their efforts and achievements. 

Encouraging greater autonomy within your performance management system can also have a huge impact on leadership humility. It will demonstrate to managers that there is more than one right way to do things and that their way isn’t necessarily the best approach for everyone.

It can take a long time to develop great leaders, but it all starts with your performance management system. With enough effort, the results can be staggering, and you will be left with fully engaged, ambitious employees who remain loyal to your company for years to come.


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