Performance management is a simple activity that many organisations over complicate. Fundamentally, organisational goals are translated into individual goals and a line manager oversees the achievement of those, providing training and feedback as necessary.
Many managers only begin to measure performance when it has already fallen, and without benchmarks for high performance, it’s difficult to know where to begin tackling the problem.
Therefore, the most important factor in effective performance management is to measure results consistently when performance is good, not only when it needs to improve.
A systemic issue
Performance management is a systemic issue, yet the responsibility for it rests on the shoulders of line managers, who must translate business targets into individual performance targets and then manage staff either formally through an appraisal system or informally through ongoing feedback.
The simplest system cascades organisational targets down to individual accountabilities and then assigns those to staff along with measurement criteria and any reward or bonus that is considered appropriate. Managers must then assess each individual's ability to
meet those targets and provide training as necessary.
One of the most vital and yet overlooked reasons for having an effective performance management system is not to improve performance but to deliver predictable performance. Over achievement can sometimes lead to the inability for supply to meet
demand. This can be just as dangerous as under achievement for a company because results need to be predictable in order to manage growth against a business plan.
Some teams use a competitive performance management system, publicising results and offering incentives to high performers. This is typical of sales environments such as call centres, but the risk of any competitive system is that high performers can alienate the rest of the team who lose motivation, believing that there is no point in trying.
Another common problem is that managers use performance management methods to influence behaviour, creating targets with too many variables. For example, a sales manager might introduce customer satisfaction metrics to make sure sales staff behave ethically. In reality, it is better to hire the right staff and manage them against simple, clear targets.
Hold regular reviews
Performance reviews must be carried out regularly and more often than annual appraisals which are for employee development. Some managers hold reviews quarterly or even monthly, depending on the nature of the role. By following a consistent format, they are able to correct any potential problems before they impact on the business and
avoid the need for formal disciplinary procedures.
Whatever method you use, it is important to remember that you can only assess performance fairly when:
• The employee clearly understands their goals and your expectations
• The employee is given the means to achieve those goals, such as resources and training.
• The employee is given frequent, timely and specific feedback on their performance
When performance falls below an acceptable level, it is important to focus on what you want staff to do, not on identifying the reason why performance has fallen. You will generally find that performance issues disappear when people focus on clearly defined goals and have the support to achieve them.
Designing a performance improvement plan
When targets are fair and achievable, all resources are available and staff are fully trained, under-performance is most likely due to disengagement, and disengagement results directly from a lack of accountability.
Performance can’t be improved if it wasn’t measured in the first place, so make sure you
have targets and measurements in place, even when performance is good.
Consider the following to develop a performance improvement plan:
- Behaviour is difficult to change if there are no consequences. Don’t let bonuses and
other perks become the norm, but ensure you have a rewards system in place which can be varied.
- Identify the specific root cause of the performance shortfall.
- Understand the timescales involved. You’re unlikely to fix a performance problem
- Get the staff who are directly involved in the problem to define a remedial plan and hold them accountable to it.
- Make sure that all the resources necessary are in place. If the under-performance is a resource issue, fix it. If it’s a people issue, take away their excuses.
- Hold regular reviews; weekly, daily or hourly if you need to.
- Do not offer rewards or incentives for achievement of the plan. The staff involved
have already been rewarded for underperforming, because they have been paid
normally for results that they didn’t achieve.
- Rewarding them again will lead to the problem reoccurring. Performance on target
needs to be the status quo.