The purpose of performance management should be to maximise the contribution of each employee, every team, and function which will ultimately maximise the performance of the organisation. However, while this is the ultimate goal, too many organisations fail to gain the full benefits from their performance management processes because they fail to ensure that a number of fundamental ‘building blocks’ are in place first. For example:
·Ensure accountability. Who is responsible for implementing the new processes and procedures? When implementing a performance management process, appoint a project manager to implement it and make successful implementation part of their performance expectations for the year.
·Be clear about the Board’s role. To often Boards think that performance management is ‘for everyone else’. However, for performance management to be successful it must be lead from the top and clearly linked to the business/organization’s strategies and goals.
·Keep it simple! Don’t start with an all encompassing highly complex/comprehensive system – start with the basics first. Use a simple paperwork system to record targets/objectives and an annual (or biannual) review of achievement. As managers and staff recognize the value of the process, more ‘features’ can be added (e.g. 360° appraisal).
·Set clear expectations. Avoid setting vague or inappropriate targets. It is vital to set clear and realistic performance targets.
·Ensure targets and measures are congruent. It is important to ensure that targets and measures do not conflict with each other. For example, a target to reduce purchasing spend may seem an appropriate target for the purchasing manager of a transport company. However, buying ‘cheap’ parts may conflict with engineering manager’s target to improve the availability and reliability of the organisation’s vehicles.
·Don’t rank your staff. Ranking your staff can kill a performance management system especially if the only way that an individual can improve their ranking is to undermine the performance of others.
·Review performance adequately. It is easy for managers to become focused on one specific incident or issue rather than reviewing the entire period which a performance review covers. In addition, managers need to be careful to avoid the “halo” and “horns” effects. Just because an employee performs badly in one area does not make his/her overall performance bad. The same goes for good performance. The key to successful reviews is collecting clear evidence about an individual’s performance.
·Provide adequate development support for staff. One key aspect of the performance management process is the development of staff to provide them with the capabilities to achieve their targets. It is important that managers do not ignore this vital part of performance management. How can someone improve if they are not given the skills and tools to do things more effectively?
As stated earlier, the purpose of a performance management process is to optimize the success of each employee and ultimately the organisation. Ensuring the fundamental ‘building blocks’ are in place will enable managers and organisations to realise their goals.