Performance Management in Action

It has become very clear to me as I work closely with organisations that many clients are struggling with the practical implementation and daily practice of Performance Management that is required from Line Managers and staff.

Organisations seem to have a clear conceptual understanding of what they want to do, usually gained from their HR practitioners, but often have not thought through the practical considerations of what this will mean in the day-to-day lives of their managers and people.

Problem Areas

• Performance Agreement documents often exist in isolation from the business strategy and plans, with no concrete linkages to give employees direction. Employees thus have no real feel for their contribution to the organisation.
• Managers push back against performance management as something that is imposed by external elements (namely HR) and they do not consider it as a 'real' part of their job. Little time is thus given to the critical conversations and required ongoing management attention.
• Measures in the Performance Agreement, or Balanced Scorecard,are often poorly formulated - vague, ambiguous, unrealistic, or irrelevant to the individual's job success. Objectives are often cut out of an Executive's Performance Agreement and put into the agreements of their direct reports with little thought as to whether the individual has any control whatsoever over these results. Employees remain uncommited to their targets, baffled by their performance agreements and confused as to the contribution expected from them.
• Performance Agreements become static documents that only get pulled out at review time. This means that job priorities can change over the year, leaving the manager with no objective way of rating performance against expectations.
• Performance Management conversations are sporadic and superficial and often do not address the real performance issues. Mediocre performance becomes the norm and this is hard to address when managers want to lift performance during economically tough times.
• If given at all, feedback is not used developmentally or constructively; employees and managers then get into conflict and disagreement rather than looking for solutions and implementing actions.
• Appraisals are set up at the last minute; they are rushed and become 'tick in the box' meetings. Neither manager nor staff member gain maximum benefit from the conversations, and performance enhancement is not addressed adequately. Reward becomes the sole aim of the process and can even 'corrupt' the process; managers crook the system to gain maximum rewards for their staff, rather than maximise the performance for them. I find amazing the amount of time and creativity that goes into manipulating the rating system to ensure that people get bonuses. Dont worry that your best performers then do not get differentiated reward from the mediocre performers, at least everyone is happy.

These are but some of the problem areas that we identify with clients wishing to improve their Performance Management.

Where do these problems stem from? Maybe if companies thought comprehensively about why these problems exist, instead of throwing 'electronic systems' at the problems, then we could start to get somewhere.

The Source of the Problems

I have thought long and hard about these problems as we are often asked to design learning interventions to address them. Having recently worked successfully with a smaller company who wants to implement Performance Management to help them manage their business more effectively, I realised that the source of many of the problems often stems from the motivation behind introducing the system.

Many companies introduce Performance Management because....

"It is global best practice, good organisations do this"
"HR have determined that this is something we should do"
"We want to get rid of our dead wood"
"We want a 'high performance' culture"
"We want to incentivise performance and so need to differentiate our top performers from the rest"

Recognise any of these reasons?

The driver of the Performance Management system is often the HR practitioner; he/she creates the system and process, draws up policies and procedures and 'educates' the managers and the employees on how to implement.

The problem here is that the company doesnt actually see the value-add to them as an organisation, to the managers and to the staff. So, implementation then becomes a compliance issue, not a business issue and HR ends up in a 'nagging', policing role.

The motivation to introduce a performance management system needs to be well thought through, and not by HR. Many large corporations are still struggling with their performance management system and process because it is still seen as an HR accountability.

What do you want?

In my opinion, any organisation needs toreally focus on what it wants from its performance management system. What is the desired outcome that you strive to achieve? If you don't know what you want, you are very unlikely to achieve it and can spend a great deal of time, effort and resources going nowhere.

Do you want to ...

• Radically improve employee performance so as to achieve strategic goals and objectives such as:
• Increased market share
• Extended revenue streams
• Increased sales / turnover
• Improved efficiencies
• Extended client base?
• Drive strategic imperatives that are essential to long term growth and success?
• Transform the culture of the organisation to increase its global competitiveness?
• Increase productivity?

HR cannot answer these questions; it has to be the CEO and his/her Executive team. The CEO needs to commit visibly to a decision that this is a strategic and business tool that will drive his/her organisation to better performance in the long term and not just the short term.

What can you do?

An extension of strategy

Performance management is an extension of strategic management. It is the way that organisations ensure the execution of strategic goals. Think seriously about how your strategy needs to be implemented and then use performance management as your tool.

Leadership drives the way

With the organisational strategy as the starting point, the CEO and his/her team need to spend quality time and effort on determining what is required of the organisation in terms that every employee can understand and contribute to. The CEO has to start with what he/she wants from each of his/her direct reports and spell this out in concrete measurable performance agreements. It is not good enough to say that they are senior enough to know what is wanted from them – everyone needs unambiguous clarity.

Direct line of sight

Each Executive needs to translate these requirements realistically into the performance agreements of each and every one of their own direct reports. Not a cut and paste job, but a really well thought out plan of implementation. Every employee should have direct line of sight to how they contribute to the organisational strategy.

Focus on results not activity

Strategic goals have to be spelt out in terms of measurable objectives and targets – long term and short term in nature. Soft behavioural issues have to be addressed as well as concrete financial issues. Performance agreements should make common sense to all employees and capture what really needs to be achieved. They are not meant to take the place of job descriptions or job profiles, so don’t try to capture the person’s whole job in the document.

Make the measures clear, and make a visible and direct correlation between achievement and performance ratings.

Weight key result areas correctly according to individual contribution

Different individuals in an organisation need to focus their attention differently. Each to his/her own area of contribution. Standardised weightings across an organisation make no sense. Focus people according to their contribution. Weight their contributions accordingly.

Let managers manage

If you have appointed managers to manage others and not just to give them a fancy title, focus them on managing their staff and on getting results through those others, not on doing all the work themselves. Weight their management accountabilities significantly; they should be getting the results through the individuals they manage, not through their own effort.

If managers are not recognised for managing people they will not perform this function, it’s as harsh as that. You get what you measure, so if you weight managers on purely their financial output they will focus their attention there and not on multiplying their efforts through the people who report to them. Ongoing attention to managing performance pays off for all concerned.

HR as facilitators

Enrol HR practitioners to facilitate the business process of performance management. They should ensure that systems, templates, tracking processes, etc. are user friendly to the Line Manager; they are there to provide support and skills building, monitoring and reporting. Performance management belongs on the business calendar, not on the HR calendar! If the CEO demands results of his/her direct team, then the process will be taken seriously and will not need policing.

Conclusion

Performance Management is a business tool for use by Executive and Line management. There are many complexities to be thought through if it is to be implemented effectively for real results, so it is worthwhile putting upfront time and effort into the planning of any performance management system and process. Don’t just jump into initiating a new process, or fixing an ailing system, establish what you are hoping to achieve from a business viewpoint and keep this in mind throughout any implementation decision.

Jennie Browning

Managing Director – Trideco (Pty) Ltd