Performance Management

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Managing your staff is not as simple as leading them to the pinnacle of success or improving their productivity. Providing your employees with the right motivation and work environment to bring out their maximum potential and whole-person development.

Good leaders should know how to bring out the best in their followers. Performance management is actually a new term for the old appraisal system where employee performance was regularly reviewed. Today, performance management focuses on ensuring that the organisation and all of its subsystems work together in an optimum fashion to achieve the results desired by the organisation. This is encapsulated in one of Human Resource’s main objectives – meeting the company’s needs by focusing on and developing employees’ key strengths.

Appraise, please

Performance appraisals are essential for the effective management and evaluation of staff. Appraisals help develop individuals, improve organisational performance, and are then used for business planning.

Annual performance appraisals enable monitoring of standards, agreeing on expectations and objectives, and delegation of responsibilities and tasks. Staff performance appraisals also establish training needs analysis and planning. The resulting data is fed into organisational annual pay and grading reviews, and coincides with business planning for the following trading year. Each individual’s performance is reviewed against objectives and standards for the trading year, agreed at the previous appraisal meeting.

There is increasingly a need for performance appraisals of all members of staff to include accountability relating to corporate responsibility. This is represented by various corporate responsibility concepts including the Triple Bottom Line (profit-people-planet); corporate social responsibility; sustainability; corporate integrity, ethics and fair trade. The organisation decides the level to which this accountability are reflected in job responsibilities, which would then feature in performance appraisals.

Performance defined

Performance appraisals have numerous benefits. To the individual staff member, they are essential for career and succession planning. Performance appraisals are relevant to staff motivation, attitude and behaviour development, communicating and striving to achieve organisational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individual’s performance, and a plan for future development.

However, while the appraisal outline is a formal structure, the development discussed with the employee shouldn’t have to be formal and constrained. Appraisals must address ‘whole person’ development – not just job skills or the skills required for the next promotion. Nor should the appraisal discriminate against anyone on the grounds of age, gender, sexual orientation, race, religion or disability.

Improvement is an integrated process

One should note that because performance management strives to optimise results and aligns all subsystems to achieve the overall results of the organisation, any focus of performance management within the organisation should ultimately affect overall organisational performance management as well.

According to some sources, performance management goes through the following steps: analysis, identifying competencies and key skills, and lastly, continued development and control of performance management systems. A common approach to assessing performance is to use a numerical or scale rating system whereby managers are asked to score an individual against a number of objectives/attributes set during the previous meeting.

Key benefits

Performance management helps to redirect efforts away from ‘busyness’ toward effectiveness. We all know that being busy is not the same as producing results. Training, strong commitment and hard work alone are not results, either. An employee may appear extremely busy, but not be contributing at all toward the set goals of the organisation. The mistaken supervisor may conclude the employee is very committed to the organisation and works very hard, thus, deserving a very high performance rating.

Organisational activities and processes are aligned to the goals of the organisation through performance management. The latter identifies organisational goals, results needed to achieve those goals, measures of effectiveness or efficiency (outcomes) toward the goals, and means (drivers) to achieve the goals. This chain of measurements is examined to ensure alignment with overall organisational results.An effective performance improvement process follows a systems-based approach while looking at outcomes and drivers; otherwise, the effort produces a flawed picture.

The results feedback loop

Achieving the overall goal requires several ongoing activities, including identification and prioritisation of desired results, establishing means to measure progress toward those results, setting standards for assessing how well results were achieved, tracking and measuring progress toward results, exchanging ongoing feedback among those participants working to achieve results, periodically reviewing progress, reinforcing activities that achieve results and intervening to improve progress where needed.

Performance management brings focus on overall results, measuring results, focused and ongoing feedback about results, and development plans to improve results. The results measurements themselves are not the ultimate priority as much as ongoing feedback and adjustments to meet results.

The steps in performance management are also similar to those in a well-designed training process, when the process can be integrated with the overall goals of the organisation. Many trainers with this priority now call themselves performance consultants.

Feedback is relevant to how well results are being achieved. Useful feedback is timely, feasible and understood. Ideally, feedback addresses key activities to improve or reinforce performance. Usually, the larger the number of sources giving feedback, the more accurate is the depiction of events. Any ideas to improve or support performance should be implemented as appropriate. This ongoing feedback is often one of the most important aspects of performance management.

Meaningful measurement

A performance appraisal or review includes documentation of expected results, standards of performance, progress toward achieving of results, how well they were achieved, examples indicating achievement, suggestions to improve performance and how those suggestions can be followed are recommended. The performance appraisal is usually quite straightforward to carry out.

Traditional appraisals and forms, 360-degree-type appraisals or a blank sheet of paper are all effective if they are conducted properly, and if the process is clearly explained to and agreed by everyone involved.

The resulting measurements have a wide variety of useful applications. They are useful in benchmarking, or setting standards for comparison with best practices in other organisations or departments. They provide consistent basis for comparison during internal change management efforts. They indicate results during improvement efforts, such as employee training, management development and quality programmes. They help ensure fair treatment to employees based on performance.

The structure may be formal, but the process and content does not have to be constrained by work and job issues. Look for opportunities to help the person develop beyond their formal work responsibilities. Not everyone is interested in promotion or job-skills training, but nearly everyone has something in them that they want to pursue and develop. See if you can tap into these desires and help the other person to achieve their own personal aims. One vital step in the performance management process is often overlooked – If performance does meet desired performance standards, give rewards.

Beating the pessimists

Just like any other process, if performance appraisals aren’t working, see whether it is being properly trained, explained, agreed upon and conducted. Managers need guidance, training and encouragement in how to conduct appraisals properly. Experienced manager should help anxious managers develop and adapt appraisals methods that work for them.

Look out for the warning signs of negative attitudes towards appraisals. This is most often found where a senior manager or director expresses a dislike for conducting appraisals, usually because they are uncomfortable and inexperienced in conducting them. The senior manager/director is often heard saying that ‘appraisals don’t work and are a waste of time’, which might well become a self-fulfilling prophecy.

The appraisals process provides the platform for development and motivation, so organisations should foster a feeling that performance appraisals are positive opportunities. In certain organisations, performance appraisals are widely regarded as something which develops fear and resentment. A staff performance appraisal is not the place to handle matters of discipline or admonishment.

More frequent reviews

Holding regular, informal and frequent one-to-one reviews greatly reduces the pressure and time required for an annual formal appraisal meeting. The manager is better informed and more up-to-date with his or her people’s activities. Difficult issues can be identified, discussed and resolved quickly, before they become more serious. Help can be given more readily. Assignments, tasks and objectives can be agreed, completed and reviewed quickly – leaving actions more than a few weeks reduces completion rates significantly for all but the most senior and experienced people. Organisations demand more flexibility than a single annual review allows, as priorities and contingencies often change throughout the year. Training and development actions can be broken down into smaller more digestible chunks, increasing success rates and motivational effect as a result.

The fear factor is greatly reduced because people become more comfortable with the review process. Relationships and mutual understanding develop more quickly with greater frequency of meetings between manager and staff member. Staff members can be better prepared for the formal appraisal, giving better results, and saving management time. Frequent review meetings increase the reliability of notes and performance data and reduce the chances of overlooking things at the formal appraisal.

Whole-person development

Keep in mind that appraisals are not just about job performance and job skills training. Appraisals should focus on helping the whole person to grow and attain fulfillment. Management should get to know what your people are good at outside of their work. People’s natural talents and passions often contain significant overlaps with the characteristics, conduct and maturity that are valued in the workplace. Identify these opportunities to encourage whole-person development and you will find that appraisals can become very positive and enjoyable activities for management and employees alike.

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