Performance Management

Performance management is one of the key areas in which a strong human capital function can bring value to the organization. Having an effective  PM system contributes directly to the bottom line of the organization through ensuring that desired outcomes and goals are clearly understood by all involved, and that everyone is working towards these common goals. The problem lies in ensuring that your organization’s performance management system is effective.

Purchasing a pre-made PM system is a convenient option, but pre-made systems are very rarely targeted specifically enough to the needs of your organization to ensure maximum effectiveness. Hiring a consultant to design a PM system can be much more tailored, but may be prohibitively expensive. Consequently, the project design may fall right into the laps of the HR department itself.

When that happens, it’s important to make sure you’re doing it right. One of the ways in which HR can fail the organization is by getting too caught up into what the perfect PM system looks like from HR’s perspective, and forgetting what it looks like to the rest of the stakeholders. If your managers and employees are not on board with the system you’ve designed, it won’t be effective. Have you ever complained that your managers “just don’t get it” and wondered why they can’t be bothered to use the fabulous system you’ve designed/implemented? If so, my guess is that you don’t have great buy-in from your managers- either they don’t understand why your system is important, or it doesn’t measure what’s important to them. In either case, you have some work to do.

That means that the very first part of designing a performance management system is identifying your stakeholders, and getting them involved. Identify the goals- what do you want your PM system to manage? And why? If your system covers the things your managers need it to cover, you’ll have a much higher acceptance level and therefore much higher effectiveness.

This is also the time to have a conversation about areas your PM system needs to cover- and now is the time to talk about competencies. Chances are really good that between the managers and the employees doing the work, they have a much better idea of the competencies required to do the job than you do. It’s also an opportunity to make sure that the staff see your PM system as fair. If the employees don’t think your PM system is fair, they won’t engage, and your effectiveness will be much reduced. Keep bringing those competencies back to your identified goals, too- your system will only be valid if it’s actually measuring the elements required to meet the goals you’ve already identified.

Once you have your list of competencies, then you need to decide how the PM system should be set up. Is an annual review really going to be as effective as you need it to be? How about quarterly coaching? Weekly coaching with quarterly reviews? How formal does your system need to be? What works best with your organizational culture? And how much paperwork is too much?

The closer you can keep your Performance Management System to the needs outlined above, the higher the effectiveness of the system will be. Designing a system with the input of your SMEs and stakeholders is the best way to ensure that you get a system that serves the needs of the organization and helps contribute positively to the bottom line through increased productivity and clarity of purpose.

You may not ever be able to keep everybody happy with your performance management system. But if it is effective, and measures the things it’s supposed to measure, you will see positive results.Performance management is one of the key areas in which a strong human capital function can bring value to the organization. Having an effective  PM system contributes directly to the bottom line of the organization through ensuring that desired outcomes and goals are clearly understood by all involved, and that everyone is working towards these common goals. The problem lies in ensuring that your organization’s performance management system is effective.

Purchasing a pre-made PM system is a convenient option, but pre-made systems are very rarely targeted specifically enough to the needs of your organization to ensure maximum effectiveness. Hiring a consultant to design a PM system can be much more tailored, but may be prohibitively expensive. Consequently, the project design may fall right into the laps of the HR department itself.

When that happens, it’s important to make sure you’re doing it right. One of the ways in which HR can fail the organization is by getting too caught up into what the perfect PM system looks like from HR’s perspective, and forgetting what it looks like to the rest of the stakeholders. If your managers and employees are not on board with the system you’ve designed, it won’t be effective. Have you ever complained that your managers “just don’t get it” and wondered why they can’t be bothered to use the fabulous system you’ve designed/implemented? If so, my guess is that you don’t have great buy-in from your managers- either they don’t understand why your system is important, or it doesn’t measure what’s important to them. In either case, you have some work to do.

That means that the very first part of designing a performance management system is identifying your stakeholders, and getting them involved. Identify the goals- what do you want your PM system to manage? And why? If your system covers the things your managers need it to cover, you’ll have a much higher acceptance level and therefore much higher effectiveness.

This is also the time to have a conversation about areas your PM system needs to cover- and now is the time to talk about competencies. Chances are really good that between the managers and the employees doing the work, they have a much better idea of the competencies required to do the job than you do. It’s also an opportunity to make sure that the staff see your PM system as fair. If the employees don’t think your PM system is fair, they won’t engage, and your effectiveness will be much reduced. Keep bringing those competencies back to your identified goals, too- your system will only be valid if it’s actually measuring the elements required to meet the goals you’ve already identified.

Once you have your list of competencies, then you need to decide how the PM system should be set up. Is an annual review really going to be as effective as you need it to be? How about quarterly coaching? Weekly coaching with quarterly reviews? How formal does your system need to be? What works best with your organizational culture? And how much paperwork is too much?

The closer you can keep your Performance Management System to the needs outlined above, the higher the effectiveness of the system will be. Designing a system with the input of your SMEs and stakeholders is the best way to ensure that you get a system that serves the needs of the organization and helps contribute positively to the bottom line through increased productivity and clarity of purpose.

You may not ever be able to keep everybody happy with your performance management system. But if it is effective, and measures the things it’s supposed to measure, you will see positive results.