Organisations are constantly looking for new and innovative ways to implement performance management systems – to find the magic combination of tools that will assist managers to truly inspire and motivate their teams. But we don’t need to look for new and innovative ways – we need to implement what we already have more effectively.
Go to the majority of websites on performance management and you find the same things said – that performance management is about setting measurable goals to ensure your employees meet the organisations needs. When key ideas that underpin successful performance management are spoken of, such as employee training and development, it is usually only in relation to exiting a problem employee while demonstrating fair process.
And this attitude toward performance management is embedded in many management teams. Goal setting relates only to the business plan, KPI’s are entrenched in job descriptions and are not fluid or adapted to suit individual needs, and performance appraisals are hastily written to meet salary review deadlines and often don’t allow employees any real input.
It is no wonder that employees view performance management with cynicism when they get the annual request to dust off their goals at performance appraisal time.
So how do we do it better? How can we create a performance management system that really works and has staff buy-in?
1. Ensure that KPI’s can be set with the individual and can be adapted as the person’s role and experience grows.
KPI’s will have more relevance and be more motivational to the employee if the employee has been part of the discussion when these are set, understands the reasons for them, and can see how they are linked to organisational goals. The main deliverables for the position can be set centrally – but if the team leader is given more flexibility to adapt and shape roles then there can be a better fit between the strategic goals of the organisation and the personal goals of the employee.
Instead of fixing these in stone on a job description why not have the line manager discuss these with the employee in their first week on the job, and then underpin them with monthly goals. Record these and then measure progress in regular catch-ups.
A quarterly review can ensure the staff member is on track and help to keep the KPI’s relevant. It also means you don’t have to rewrite the position description everytime a role changes slightly, making the manager far more fleet of foot and able to respond more quickly to environmental changes.
2. Keep paperwork to a minimum and ensure that what is being captured is relevant to the individual.
Ever filled out a performance appraisal where half the boxes weren’t relevant and you were asked to comment in three different ways about the same thing? Managers mostly know how an employee is performing and how they want to rank them. A short pithy ranking system that lets them do this quickly and effectively so the employee can get their pay rise is all you need. Fewer comment fields will ensure that what is written is meaningful to the employee – and where they are delivering what is required what more do you need? The KPI’s and goal setting information developed throughout the year will fill in any gaps.
Make sure the paperwork also captures potential – don’t just report on what the employee has done, but what they could do, in a couple of years, and with the right training. For your organisation – if you can spot the individuals with the potential to become really high performers in those entry level roles and you develop them – you might just have the edge on your competition.
3. Work in a no surprises environment – keep the feedback frequent and hold managers accountable for keeping it honest
If you are waiting for the annual appraisal to let an employee know there is an issue you aren’t an effective manager – and there are a lot of ineffectual managers out there. If employees are blindsided at annual appraisal time there are two issues – one, the employee loses trust with their manager damaging the organisational culture, and two, the organisation has been carrying someone who wasn’t delivering for a signficant chunk of time.
A good performance management system helps to prevent bad management by ensuring that feedback is timely, and that an employee is never (well hardly ever) going to be blindsided by negative feedback at annual appraisal time. By ensuring management are addressing issues quickly you also ensure that problems won’t become entrenched, and you will have a higher performing team. So make sure the performance management system has a mechanism that demands regular honest feedback from it’s managers.
4. Make sure it is fair, equitable, and transparent, and that the senior management team and CEO are being measured in the same way
No, don’t pay everybody the same – measure their performance the same.
For a performance management system to really get buy-in it needs to work the same for everybody. If a company is going downhill due to poor performance then a CEO shouldn’t be getting a bonus. So link the remuneration of the top executives to the same performance management scheme you are using for everyone else and then implement it in the same way for everybody.
It sounds simple but this can be challenging – there is usually at least one manager who is a lot easier on their team than the others, so this is where it is crucial for Senior Management to meet and moderate the results. There is nothing more disheartening than to hear that Joe in marketing who never turns up and hasn’t bagged a new client in two years got a bonus, but Al in accounting who saved the firm 2 million missed out – because management weren’t talking to each other.
You also need to ensure that your system is documented and that staff understand it – it is no good having the perfect system if nobody knows about it. If it’s one you can be really proud of rave about it, put it in the employee handbook, mention it in the interview. And remember if it can’t be explained in an “elevator pitch” it may be too complex and probably isn’t all that transparent.
5. Really support career goals and training needs
Don’t just pay this lip service – and then make a half hearted token gesture around external training. Show your employees you take their development seriously and actually deliver.
Ensure that career goals and initial training needs are identified when setting KPI’s and goals with the employee in week one. Then wherever possible align organisational goals and KPI’s so that your employee is getting the opportunity to develop the skills they need for promotion from day one in the job.
If you can’t meet your employees career goals ensure they understand why– a no can be a slap in the face, but an explanation with a reasonable compromise ensures they feel supported and valued.
AND THEN MAKE SURE THE TRAINING HAPPENS – if you identify training needs then actually source training to meet that need. If you don’t have a large training budget be creative, bring in local professionals, find free alternatives, get employees to cross train each other. Work with your HR team to create distinct modules that employees can work through to learn skills that are key to the organisation.
BE INVENTIVE about supporting career goals – if you have a data entry individual who wants to learn accounts payable and an AP old hand who has never had the opportunity to learn how to use your CRM mix it up. Expand peoples roles – challenge them to work more efficiently so that you can give them extra responsibility - and then do it!
Finally create a culture where managers can DELEGATE AND DON’T FEEL THREATENED – it can be scary up-skilling your team especially when you’re training them to do your role – what will it mean if they can replace you? But the better your team performs the better the organisation performs – let managers know there are opportunities for them to upskill too. Let this change begin at the top!
Last but not least:
6. Value performance management as a useful tool to help grow expertise and high performing employees
If the organisation doesn’t value performance management none of this will work. Entrench it in the culture, and the values. Present yourself as a learning organisation where you constantly challenge each other to grow.
Invest in performance management – train your management team on how to manage effectively. Make it a KPI for your managers, something that they are measured on and helped to improve. Work with them to help them grow their staff. Challenge them and offer them the same opportunities to grow.
- High performers are valued, and are given support to develop in their roles, and achieve their career goals
- Low performers are identified early and are helped to improve or are exited before they drag the team down
- Managers are trained in how to manage effectively and held accountable to the same standards as employees
- Retention and staff satisfaction increase
- KPI and goal setting becomes more flexible and the targets matter
MAKE IT MEANINGFUL. Manage the change – make it dramatic, make it visual. Have a staff meeting where you throw the old performance management forms in the bin and introduce the new system with flair. Talk about the outcomes, not about the inputs. Move it away from pay and towards personal growth. Ensure each employee knows this is about helping them make the best of themselves – that it isn’t punitive, and it’s not just about the business hitting its targets.
Anyone can copy the product that you make but they can’t do it better than you or cheaper than you, if you have the best people. You need to start putting into people development what you put into product development. The results might surprise you.