Performance Management – It is What You Make of It

posted by WMC

The subject of team-based compensation systems came round to my attention again this past week and some of the themes that presented out of those discussions included:

  • Are we willing to remove the people or teams that hold everyone else back?
  • How do you get everyone engaged and moving in the same direction?
  • If I’m a high achiever/performer why would I want to carry the weight of those that don’t perform?
  • What if the goals and objectives set for me or my team are not achievable or simply don’t make sense? I’m set up to fail from the beginning!

I believe that one of the most, if not the most, important mechanisms to address these questions and concerns is a well developed – and effectively administered – performance management system. There are so many aspects to what I believe constitutes a good performance management system that I’m actually going to tackle the subject in more than one post (so stay tuned!). I’m also going to approach the issue from the basis of what I’ve seen be successful from my own personal experience and learning over the past 25 plus years of management.

Unfortunately, too many of us – leaders and followers alike – approach the performance management exercise with anxiety and dread. Historically, the process seems to have been defined by its potential for conflict and disappointment – and tremendous relief when it’s over. However, I’m going to suggest that performance management, if well done, can create the exact opposite feelings in most cases.

I’m sure many leaders might recognize that effective performance management is key to maintaining and increasing employee commitment and productivity. Or, in the alternative, might acknowledge that ineffective administration of a performance management process has engendered less commitment, productivity and satisfaction on the part of their staff! Moreover, with current and projected labor shortages no organization can afford to lose current staff through poor, or non-existent, performance management practices. Yet we seem to miss a golden opportunity to retain staff – and develop them – through an effectively structured and supported performance management process.

First of all, there must be some fundamental building blocks in place to set the stage for the performance management process. At the outset, the organization itself must have clearly established strategic directions to which it is expecting to align all individual goals and performance expectations. It’s more than a tad difficult and frustrating for an employee to be told they are not making the grade if the organization itself has not been clear about what its goals and objectives are. Just as importantly, the organization should take time to clearly articulate its vision, values, and expected behaviors – basically be clear about the culture that defines the organization. An organization might be very clear about its objectives (e.g., revenue generation) but not be at all pleased with how those goals were achieved (e.g., illegal activity). Both the goals and the cultural expectations should be well articulated to set the stage for performance management.

This is just the start, however, of the goal setting process. Large strategic goals need to be translated down to goals for individual business units of the organization and then down through to the individual. An overarching strategic direction like revenue generation may have very different application and meaning for the Finance department versus the Human Resources department versus an operational division or program. Time must be taken to make the large strategic goals relevant to the individual in their day-to-day performance and as part of the formal performance management process.

In addition to the establishment of the hard metrics around organizational/sub-unit performance, goals should be clear as it relates to the performance behaviors identified above. Just as with the work required to explicitly describe what realization of strategic goals looks like, similar work must be undertaken to describe in factual and specific terms what it means to be a good performer/leader within the organization. The organization must be able to paint a clear picture of what it means to be a good performer within the organizational culture – and each organization will have distinct features and performance expectations of its staff, so this is not a cut-and-paste effort gleaned from looking at what has worked for other businesses.

Finally, there must be meaningful discussion between a leader and the person who reports to them on the goals, objectives and performance expectations. This is critical in not only establishing the performance parameters but also in ensuring that there is understanding and buy-in to the objectives. This conversation goes a long way to ensuring that both the leader and the direct report agree that the performance objectives are in fact achievable or actually even relate to the job the direct report is doing. There may even be opportunity to understand or appreciate under what circumstances the desired performance might not be achievable – e.g., key environmental variables change. Moreover, this is a point at which other non-strategic objectives and goals can be discussed. There is much in the day-to-day role of any employee or manager that is not strategic in nature but is critically important to maintaining and advancing operational effectiveness of a business unit – good fiscal oversight, resolution of operational problems, hiring of staff, etc. These basic functions require attention and consideration in setting performance management objectives.

At this point I have only discussed what is required as the base foundation for effective and meaningful performance management. In subsequent entries I will focus on processes of continuous feedback, 360 degree performance reviews, and connection to reward and recognition systems.

Greg Hadubiak is an Executive Coach/Consultant with with Western Management Consultants (WMC) and a TEC Canada Chair. He is passionate about supporting and developing great leaders. He brings to bear over 25+ years of senior leadership experience, a commitment to life-long learning, and a passion for his client’s success in all avenues of his work.

The opinions represented here do not necessarily represent WMC’s views as a whole.