Managing performance effectively is becoming increasing important in today’s service and knowledge based economy, and many organisations are turning to their training partners to help them.

While management development companies can help businesses implement a new performance management system and train managers to use it, organisations are often unclear about what performance management is or what should be included in a performance management training programme.

To try and provide some guidance in this area, we have summarized the key elements of performance management below.

The overall purpose of performance management is to maximise the contribution of individuals and their work teams to enable a business or organisation achieve its strategic goals.  It is vital to recognise that the performance management is applicable to all levels of management within an organisation from front line staff all the way up to the board.

However, for everyone to be able to take responsibility for their own performance and maximise it, they need to know what the organisation expects of them.  Expectations are best set by:

  • Describing what needs to be achieved through the setting of personal targets that are linked to the business’ strategic aims.
  • Describing how managers and staff are expected to behave and deliver their personal targets.

Once expectations have been set, managers and staff should not be left to just ‘get on with it’, but should have their performance against expectations ‘continually’ reviewed on a regular basis, for example every 6-8 weeks.  In this way progress against targets can be monitored and any issues that might have arisen in the previous period resolved.

Managers need to also conduct a formal review of performance once per year to formally record progress and successes.  Managers should review performance both in terms of What has been achieved as well as How it has been achieved.

  • What has been achieved is a review of the job holder’s tasks and responsibilities and is measured by achievement/delivery of the targets set at the beginning of the year.
  • How the targets have been delivered.  This is determined by reviewing an individual’s behaviour against set competence standards or values.  It is not acceptable for managers and staff to deliver their targets (above) at any cost.  Managers will therefore need to collect evidence of behaviour for their review to be valid.

Clearly for any performance management process to be effective something needs to happen as a result of it.  The outcomes from the continual and annual reviews will therefore range from a recognition of efforts and achievements, sanctioning of bonuses and other incentives (if appropriate), consequential action for non achievement, as well as learning actions and plans and agreeing of new targets for the coming year.

Ultimately, the measure of whether or not the performance management process is effective is if all managers, teams and ultimately the business achieves their goals and objectives.  If your people and business are not achieving their potential it is probably time to review how the performance and development of your staff are managed.