Author: Amira Kohler, performance management expert, Plus HR 

Topic: Performance management

WHEN TO USE THIS GUIDE

• If you are designing a performance management strategy and process for the first time
• If your organisation’s performance management process is poorly regarded
• If your current strategy and process does not seem to drive real business results

10-STEP ACTION PLAN

1.  Consider the culture of your organisation

It's critical to build a performance management process and system that reflects the culture of the organisation. For example, in a fluid, young and dynamic organisation, it would be inappropriate to force in a complex performance management process. The process here should be minimal and brief, with a low degree of emphasis on rules.

2. Emphasize what is important

Everyone knows that high performance leads to organisational success, and yet how often is performance management seen as a twice a year process to complete before resuming the ‘real work’? The most important element in managing performance is the quality and frequency of the discussion about performance between a line manager and an employee. Spotting an individual doing it right, or providing constructive, immediate feedback when an individual is off-track is of greater value than any dutifully completed feedback form that is not discussed. Emphasize this fact in all aspects of the process: the way it is launched, communicated, what is celebrated (or not), how forms are written etc.

3. Consider whether to measure the ‘how’ as well as the ‘what’

The typical performance management process measures an individual’s performance against ‘what’ they are employed to deliver (their objectives, KPIs, targets etc.) Some organisations build into the process explicit measurement against ‘how’ they go about achieving these goals (through competences, behaviours, capabilities etc.). Measuring the ‘how’ can be a good way to encourage/discourage certain behaviour. But the ‘how’ standards set need to be realistic rather than idealistic. Otherwise there is a strong risk that these behavioural standards will lose credibility in a commercially-driven environment where results, rightly or wrongly, often speak for themselves.

4. Consider up front complex issues which relate to performance management

While at its heart performance management is very simple – the delivery of excellent performance from an organisation and its employees – there are a number of thorny issues which inevitably go side by side with the subject. For instance:

• whether to have performance ratings, and if so what labels/numbers to use
• whether to have forced distribution of performance ratings (i.e. to ensure there is a spread of employees across the full rating spectrum)
• whether, and how, to tie performance directly to reward.

It's critical to consider the pros and cons of these kinds of issues up front in the context of the particular organisation and its culture and aims, and to make appropriate decisions.

5. Analyse what your performance management process will be used for

Think about all the useful by-products which an effective performance management process would deliver. For instance, would you wish your performance management process to shed light on:

• suitable learning and development programmes for individuals and teams
• suitable allocation of the training budget
• the identification of talented individuals
• how to allocate the bonus pot based on performance.

6. Build the process and system accordingly

If you will want to leverage the various benefits of the performance management process, you need to build the process and system accordingly to allow you to exploit these opportunities. For instance, if results across a department or organisation need to be easily aggregated and the themes evaluated, implement a suitable on-line system which allows results to be analysed electronically rather than manually. 

7. Consider performance management in relation to other people processes

It's rare for the process of performance management, or its outcomes, to stand alone from other people management processes in place within the organisation. Align performance management with other people processes to gain maximum gain and to ensure HR delivers a ‘joined up’ approach to the organisation and the employees.

8. Keep it simple

Many line managers suffer from HR process overload, frustrating their HR colleagues by not following the process correctly, taking shortcuts, or treating performance management as a tick box exercise. Do everyone a favour, and keep it simple. This may mean compromising some ideals (for instance, not asking busy line managers to consider an extensive range of competences as well as performance against individual objectives). Gaining buy in and commitment will be worth it.

9. Try to get it right first time

Avoid the temptation to rush the design or implementation of your performance management strategy unless it is ready. It may be desirable to bring in the new or changed process to fit in with a pre-determined cycle of events (for example, in time for the end of year performance reviews), but unless it is fully prepared this could prove damaging. Line managers (rightfully) become frustrated when a half-baked process is implemented for the sake of speed over due care. Similarly, try to avoid tinkering with the process once it is in place and is bedding down. This usually creates undue pain for relatively small gain. 

10. Train your managers and employees to ensure effective implementation

Providing training, coaching and support for your line managers and employees is critical to the successful implementation and embedding of the performance management approach. Training should focus primarily on the areas many find tricky – how to set objectives, how to give and receive feedback, how to have difficult conversations etc. Don’t miss a trick by training managers on the mechanisms, such as the process and forms (which should be simple and self-explanatory), without focusing on these more difficult, but more value-adding areas.

EXPECTED OUTCOMES | RESULTS

• There is relatively little complaint or resistance from line managers or employees; they can see the value of the process will warrant the effort required to make it work
• Increased levels of motivation, engagement, understanding and loyalty within the organisation between employees and their line managers / the business
• And of course the primary aim: improved performance levels across the business

Disclaimer:
This guide is provided for guidance only. The provided information, whether ‘How to guides’, policies, procedures, samples, examples, or guidelines, while authoritative, is not guaranteed for accuracy and legality. While we make every effort to provide and link to accurate, legal, and complete information, we cannot guarantee it is correct for a worldwide audience. Please seek legal assistance, or assistance from your local or international governmental resources, to make certain that your legal interpretation and decisions are correct.