This is the first in a series of three articles on Performance Management during which we will discuss what a ‘best practice’ performance management process looks like as well as key elements associated with the process. In the first article we will examine the overall purpose of Performance Management and what a Performance Management process should ‘look’ like.
What is Performance Management?
The purpose of performance management is to maximise the contribution of individuals and teams to enable the business to achieve its organisational goals and objectives. As such performance management establishes shared understanding and commitment about what needs to be achieved and an approach to leading and developing people which will ensure that goals are achieved. Performance management is therefore a combination of process and the management skills of communication, dialogue, coaching and working together.
What should a Performance Management process look like?
A ‘best practice’ Performance Management process consists of a number of key elements and is shown in the attached document.
While the diagram attached shows the process to be a linear sequence of events, it should be noted that performance management is a continual and iterative process. Performance management starts with the setting of the overall business strategy, which is subsequently sub-divided into Operational and Functional targets and then cascaded down into personal targets and expectations. Individual performance improvement and development is then managed through a series of one to one ‘informal’ and ‘formal’ reviews, the outcomes of which are documented, and appropriate actions subsequently taken and followed up.
We believe that the process for managing performance should be the same for all managers in an organisation, whether they are a Board member or have an operational or functional role. However, while the processes used are the same, the key elements of the process may need to be tailored to suit local cultural norms.
The attached diagram shows the prerequisites for performance management (i.e. business strategy and values), and the key elements associated with the process. We will discuss the key elements of the process in Part 2, to be published later this week.