Performance management is becoming increasing important in today’s service and knowledge based economy, and many organisations are turning to their training providers to help them.
While trainers and management consultants 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 the performance management process below.
The overall purpose of performance management is to maximise the contribution of individuals and teams to enable a business or organisation achieve its goals and objectives. It is important to recognise therefore that the process is applicable to all levels of management within an organisation from the Board though to the ‘shop floor’.
Setting expectations. We believe that it is vital that everyone in their business knows what’s expected of them if they are to maximise their own and the business’s performance. Expectations can be set in two ways:
- By describing what needs to be achieved through the setting of personal targets that are linked to the business’ strategies.
- By describing how we managers are expected to behave and deliver their personal targets.
Continual review. Managers and staff should not be left to just get on with it, but should have their performance ‘continually’ reviewed on a regular basis (e.g. every 6 weeks). In this way progress against targets can be monitored and any issues that might have arisen in the previous period resolved.
Annual performance review. Managers should conduct a formal review of performance once per year using set procedures and documentation. 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. Managers will therefore need to collect evidence of behaviour for their review to be valid.
360 degree appraisal. Some organisations use a 360 degree appraisal process is as one means of collecting evidence. Feedback questionnaires are completed by the individual, their boss, peers and team members. The questions are designed to test how effective a person is in particular areas, for example how they lead their team. The results are collated and presented in terms of the individuals self perception compared against their boss, peers and team. In this way it highlights the strengths and weaknesses of the individual, and is a valuable tool for identifying development needs.
Performance management outcomes. Clearly for any performance management process to be effective something needs to happen as a result of it. The outcomes from the process 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. In addition, the process could provide inputs to other business processes such as succession planning and talent management.
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.