Winning with Outsourcing -

A-Z of Effective Performance Management in Offshore Outsourcing

January 19, 2024

Summary

In this dynamic landscape of global operations model for businesses, unlocking the potential of a remote workforce hinges on a vital tool: effective performance management.

This article outlines the importance of performance management on employee engagement and offers steps to initiate this process for organisation success.

Agile organisations understand the benefits of performance management in today’s dynamic offshoring world.

Research shows that outdated systems, like annual reviews, can decrease employee engagement and motivation.

Due to this, forward-thinking organisations are now implementing a more continuous approach to managing, motivating, and rewarding good performance through an effective performance management system.

Research has found that 74% of managers who effectively coach and develop their employees say a performance management system is effective. While 62% say their business performance is better than their competitors' (Mckinsey, 2018),

An effective performance management system ensures your employees’ activities and output align with your broader business objectives and can be critical to your business success and employee productivity.

Implementing effective performance management helps create a dynamic and strategic approach to improved employee performance.

What Is Performance Management

Performance management is a business management tool that enables managers to scrutinise and evaluate employees' work.

At Workforce Africa, we help organisations like yours to manage and carry out periodic performance reviews for their remote teams, which could make all the difference.

Generally, performance management focuses on employee skills, support, and resources to maintain and enhance performance in compliance with the organisation's objectives.

For performance management to be effective, individual and team goals must align with organisational goals reflected across all levels: individual, team, and across the board.

This helps streamline the implementation of human resource management practices.

Because we understand that the success of your business in Africa hinges on how well your team in Africa is managed.

That is why at Workforce Africa, we leveraged 19 years of experience and research to develop comprehensive solutions tailored to your business needs.

With our unique delivery model, we will help you achieve your business objectives.

Whether you need support with Payroll, Performance Management, Benefits administration, or even more, our experts in over 32 African markets are always ready to help you succeed.

Importance of Performance Management in Offshoring

At Workforce Africa, we understand that your skilled workforce is your greatest asset. However, effectively managing them through performance reviews could be the best way to increase productivity.

Performance management helps create a conducive working environment that allows remote employees to work more efficiently for higher productivity.

An effective performance management cycle helps foster an open dialogue between employees, management, and the company. This increases trust and ensures everyone's feels better supported and more engaged.

Without this, employees are more likely to feel detached from their work and its role within the organisation, which will likely result in a higher staff turnover rate.

5 Key Components of an Effective Performance Management Process

Goal Setting

Both individual and team employees should emphasise achieving goals aligned with the company culture.

This creates an engagement that determines how employee performance benefits the company. 

Management Involvement

Corporate admins are responsible for setting performance expectations, including feedback, coaching, and recognising productivity to guarantee success in the performance management process.

Ongoing Conversation

Administrators should create a better organisational culture where employees engage in ongoing discussions regarding various elements of the performance management process.

These include learning, goals, coaching, and employee progress.  

Learning and Development

Based on the company goals, employees should have the expertise and skills to perform their duties more efficiently.

Thus, organisations must invest in employee learning and development, allowing employees to accomplish their goals swiftly.  

Feedback and Coaching

Managers should provide prompt feedback and coaching to employees to know their progress. Evaluating employees’ performance enables them to improve where necessary and become more productive. 

Benefits of Performance Management in Offshoring

Uncover training needs

Performance management is ideal for managers to identify weaknesses and areas where employees could perform better and benefit from further training.

Creating room for discussion and evaluating employees’ performance helps uncover areas that require attention with training.

Boosts morale

Everyone likes being told they’re doing a good job. Performance reviews provide the perfect setting to formalise and document praise.

But reviews shouldn’t just be about setting objectives for the coming quarter. It should also provide an environment for a line manager to recognise individuals on their team.

Happy employees are productive employees. A staggering 69% of employees say they would work harder if they felt their efforts were being recognised.

No longer is a pay cheque enough recognition, but regular feedback and reviews are key to maintaining employee morale.

Identify employees to promote

An agile performance management approach ensures managers can identify employees who are performing well and are suitable for promotion.

It also enables managers to create opportunities that give employees more autonomy and the ability to emphasise areas they desire to work in.

Support workforce planning

From identifying employee potential to uncovering areas for further training, performance management allows managers to plan their workforce more efficiently and determine effective ways to support employees to improve performance.

Better accountability

Setting Specific, Measurable, Attainable, Relevant, and Timely (SMART) goals and interacting with and learning your employees' feelings effectively improve accountability and enhance employee performance.

With performance management becoming essential in the offshoring sector, it is ideal that managers incorporate the performance management cycle to access these benefits.

This enables them to follow the necessary steps to interact with employees.

A Typical Performance Management Cycle

The performance management cycle entails a continuous process that facilitates the performance management approach.

It helps organisations to become more competitive and attain higher employee motivation and structural flexibility.

The performance management cycle features four main stages

Planning

This stage entails organisational goal setting, creating a development plan, employee goal-setting, and reviewing the job description.  

Monitoring

It involves establishing processes that determine progress and follow-ups between corporate managers and employees.

Reviewing

Because performance management is a long-term strategy, this stage involves measuring employee performance progress once or twice a year. 

Rewarding

For employees with outstanding performance, managers can show appreciation by salary increases, promotions or bonuses. 

Generally, the performance management cycle enables organisations to maximise employee output, ensuring organisational goals are driven forward.

Without a performance management cycle, it becomes challenging to revisit structural goals continually.  

How to Get Started With Performance Management

We live in the era of instant feedback – where reviews and ratings govern many of our daily decisions – the annual employee appraisal can be considered antiquated at best.

Twelve months is a long time in business, yet many will happily leave it this long to provide any genuine feedback to their staff.

This often stunts an employee’s potential to the detriment of both the individual and the business.

To kickstart your performance management journey as an organisation, here are four steps you can take to start the process:

Define your objectives

Performance Management is somewhat broad, and no two businesses will implement it similarly.

To help define your strategy, it’s important to have clear goals and objectives beyond ‘helping employees do better’.

Raising morale or boosting productivity will naturally impact your bottom line, but success is hard to measure without a clear goal.

You should, therefore, look to set and document some clear objectives that can be tracked. This could be certain financial goals, improved staff retention numbers or increased satisfaction scores in customer service surveys.

Communicate the benefits

A Performance Management framework can be great in aiding the development of employee skills and encouraging them to reach their potential.

But it’s important to realise that employees could perceive your intentions differently.

Clearly and honestly communicating your plans and objectives will help people buy into the new approach. Explain exactly what changes you’re making, why, and what it means for individuals going forward.

Remember that from an employee perspective, performance review is linked to salary. So, be clear on how it will affect wage increases and promotions.

Train your managers

It’s widely accepted that for a modern manager to succeed, they must be able to coach. But that’s not to say every manager has the natural ability to do so.

If you ask managers to make feedback and coaching a key part of their relationship with employees, give them the confidence and skill set to do so.

Whether through workshops or one-on-one sessions, think about how you will give your managers the training they need

Take advantage of technology

Perhaps the most fundamental first step towards efficient, effective Performance Management is finding the right technology to support it.

Many cloud-based HR platforms provide Performance Management functionality to help shape and support your new, improved processes.

Built-in workflows and goal-setting features are geared towards managing and motivating performance on a continuous basis.

Conclusion

Effective performance management in outsourcing requires a strategic approach. Careful consideration of the team’s challenges and working with the right management consulting firm will make your performance management exercise a success.

You can partner with Workforce Africa, one of Africa's leading offshoring firms, to help manage your team's performance and position your team to succeed. To get started, click here: schedule a free consultation.

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