Performance management - A process and a system

Performance management is the process of creating a work environment or setting in which people are able to perform to the best of their abilities. Performance management is an entire work system that begins when a job is defined, and ends when an employee leaves your organisation. Many writers and consultants are using the term "performance management" as a substitute for the traditional appraisal system.

The goal of performance is to achieve the company mission and vision. Almost no one performs for the organisation, however, if their own mission and vision are not accomplished as well.

An effective performance management system sets new employees up to succeed, so they can help your organisation thrive. It provides enough guidance so people understand what is expected of them, enough flexibility and wiggle room is given so that the individual creativity and strengths are nurtured, and enough control so that people understand what the organisation is trying to accomplish.

Performance management begins when a job is defined. It ends when an employee leaves the company. Between these points, the following must occur for a working performance management system.

Develop clear job descriptions. Job descriptions are the first step in selecting the right person for the job, and setting that person up to succeed. We do not mean traditional job descriptions that ended with "and whatever else you are assigned by the manager." We believe job descriptions provide a framework so the applicants and new employees understand the expectations of the position. We much prefer to see these expressed as outcomes.

Select appropriate people with an appropriate selection process. People have different skills and interests. Jobs have different requirements. Selection is the process of matching the skills and interests of a person to the requirements of a job. Finding a good job "fit" is exceptionally important. Use a selection process that maximises input from potential co-workers and the person to whom the position will report.

Negotiate requirements and accomplishment-based performance standards, outcomes, and measures. Ferdinand F. Fournies, in his long-lasting book, Why Employees Don't Do What They are Supposed to Do and What to Do About It, clearly states the first reason why people sometimes fail to meet your expectations is they don't know what they are supposed to do.

Provide effective orientation, education, and training. Before a person can do the best job, he/she must have the necessary information to perform. This includes job-related, position-related, and company-related information; an excellent understanding of product, process use and requirements; and complete knowledge about customer needs and requirements.

Provide ongoing coaching and feedback. People need ongoing, consistent feedback that addresses both their strengths and the weaker areas of their performance. Effective feedback focuses more intensely on helping people build on their strengths. Feedback is a two-way process that encourages the employee to seek help. Feedback is usually more effective when requested. Create a work environment in which people feel comfortable asking, "How do you think I'm doing?"

Conduct quarterly performance development discussions. If supervisors are giving employees frequent feedback and coaching, performance reviews can change from negative, evaluative, one-sided presentations to positive, planned meetings. Held quarterly, employees always know how they are performing and their next goals and challenges.

Design effective compensation and recognition systems that reward people for their contributions. The power of an effective system is frequently overlooked and downplayed in some employee motivation-related literature. We think this is a mistake. It is often not so much about the money as it is about the message. Any reward or recognition sends a message to the individual about their value. Money has become a metaphor for value.

Provide promotional/career development opportunities for staff. The supervisor plays a key role in helping staff develop their potential. Growth goals, changing and challenging job assignments and responsibilities, and cross-training contribute to the development of a more effective staff member. Help to create an environment in which people feel comfortable to experiment and make mistakes.

Assist with exit interviews to understand why valued employees leave the organisation. When a valued person leaves the company, it is necessary to understand why the person is leaving. This feedback will help the company improve its work environment for people. An improved work environment results in the retention of valued staff. If your environment truly encourages discussion and feedback, you will learn nothing new in an exit interview.

Performance management is not an annual appraisal. Performance appraisals are a hot topic in HR these days. In fact, hundreds of resources exist to tell you how to do performance reviews. We think this is the wrong approach. Should you do reviews at all? People want to know how to do them, when to do them, whether to do them, and how they affect performance.

The targets that these assessments determine are:

How they affect income; what they assess; how they measure contribution; how they are archived and used, and how they affect career advancement and success.

We are convinced that most of these are the wrong questions, especially when they focus narrowly on the performance evaluation instrument and the appraisal meeting with the supervisor. Ask instead, how your entire performance management system supports your desire to create a customer serving, motivated, accountable, reliable, creative, dedicated, and happy workforce. We don't think the annual performance review helps you achieve these goals.

One of the major goals for a human resources professional is to develop the capacity of your organisation and its members' performance. You lead company efforts to create a workplace in which people can develop their full potential. An effective performance management system, which line managers lead and own, guarantees you will achieve your goals.

The impact of the human resources professional on this performance management system is powerful. You can encourage managers and supervisors to take responsibility for managing performance in their work area and co-operating with performance improvement across the organisation.

You can promote the understanding that even if one individual's work area, shift, or department is successful, this will not result in a well-served customer. Because all components of your organisation are part of a system that creates value for your customer, all components must be successful. So, too, in your performance management system, all components must be present and working to create value for each employee and the organisation.

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