It’s great that you decided to see the second part of this article. This round I’m going to talk about performance management.
Performance Management, Performance Appraisal or Performance Review, a lot of line managers don’t know the difference. (actually a lot of HR practitioners don’t either!!!) A lot of us associate it with the performance appraisal form that changes every so often that we have to fill up when our staffs are up for evaluation. It can be quite dreadful if you have a big number of people to appraise. And since it is often tied with salary review and adjustments, managers who are warned about keeping overhead low, dread it much more! A lot of people(not only managers) see it as a frustrating exercise of subjective assessment of people’s performance that don’t necessarily reflect people’s actual performance or worse, the department/company’s real performance. It also often results to salary adjustments (or non-adjustment) that are hard to justify but approved by authorities non-the-less, hence evaluation season is viewed with ambivalence by the people involved. There are a lot of arguments about this controversial practice of periodically appraising people’s performance but I won’t go to the details of it. I am writing about how to bring this practice closer to line so that managers can best benefit from it.
The term is PERFORMANCE MANAGEMENT. A stand alone performance appraisal system that is tied with salary adjustment but not tied with the company’s or the individuals’ performance goals are practically useless and expensive. Having a formidable performance management system is perhaps one of the most valuable strategic contributions that HR can provide an organization that aims to actualize its vision.
Performance Management has five components that both HR and Line Managers must work together to set-up in the organization.
· Planning work and setting expectations,
· Continually monitoring performance,
· Developing the capacity to perform,
· Periodically rating performance and
· Rewarding and Recognizing good performance.
Overall, HRD should help in putting up a facility to manage these five elements. There are no hard and fast rule in putting this up and the size of the effort depends on the size of the organization and the intricacies of the business. If you want a detailed help on this, let me know. (wink,wink, :D) Considering the need of line managers to focus and prioritize operational work, a performance management system should be less cumbersome and more user-friendly. The use of technology to plan, monitor and evaluate is highly recommended especially if your are using such tool/methodology as BALANCED SCORE CARD. Your performance management device should have this capabilities:
Plan work and set performance expectations – A good performance management system enables a manager to identify Key Result Areas (KRA), Key Performance Indicators (KPI) and measurable performance standards. Measuring productivity, quality of work and cost management are good “lag” indicators. It gauges how effective and efficient the person is in carrying out his/her responsibilities. Listing down core competencies on the other hand help in identifying “lead” indicators that determine the kind of knowledge, skills and attitude needed to carry out the job. The correlation of competencies with results is a good indicator that there is a connection between the identified competencies and the target results (are you still with me? :D)
The problem with a lot of planning activities is that it lacks follow-through. After the beautiful presentation of goals, the rah-rah, holding of hands and singing of “If We Hold On Together,” people forget and just remember who got too drunk during the fellowship night. Somehow in performance planning the same is true. Some Managers just rely on the agreements made during the expectation setting, move on and just wait for the performance appraisal season to come. By then, anything needed to get done to help the employees to succeed in meeting their goals are just too late.
Having a good REALTIME performance monitoring and feedback system helps in preventing the plans and performance expectations go to waste. Performance monitoring system serves as a scoreboard, or a compass if you will, that tells the employees how close or far they are from achieving their goals. It helps them see how much effort they need to exert in order to reach their goals. I’d like to end this topic by quoting that ever famous six sigma sound byte… “You cannot manage what you cannot measure”.
Developing employees’ capability to perform is an important function of both HR and Line Managers. This involves both training and coaching. I am using the term training very loosely here as the usual connotation of training is that it is formal and held in classrooms. This is not the case in developing employees’ capability to perform. Training should not just begin and end in the class room. Managers should be able to facilitate or monitor it on the floor. I’ve already talked about training in part one so, I’ll just focus on coaching. This activity is an important part of performance management. It is therefore important for managers to know how to coach. There are a bunch of good books on how to coach and if you feel those are not enough, call me (wink, wink again.)
Appraising or reviewing performance is an essential part of performance management. At a given time, leaders must spend time to give an objective assessment of the employees’ performance, sit down with them and discuss the results of the appraisal. Often, this sitting down and discussing part is often omitted in the exercise. Some managers are often too embarrassed to discuss the low grades or afraid to embarrass the employee. They see the performance discussion as some kind of confrontation and they don’t like it. So much is needed in order to make performance appraisal helpful that’s why leaders must be educated and trained on how to properly do it. Some of the things they need to learn are:
How to appraise objectively
How to discuss performance in a helpful and constructive way
How to facilitate the development of a forward agenda in order to address performance issues
The bottom line, improving performance appraisal rating is a good indicator that it is being done right.
There have been arguments about how to properly evaluate performance. Do you use actual results like productivity, quality and cost savings versus targets, or do you assess behaviors that support delivery of results? Do you limit your evaluation to objective measures or can you also rate subjective matters such as manifestation of desired competencies? My humble opinion is to find a balanced way of evaluating both so that you can reward positive results and alignment of behaviors, while identifying developmental needs. I'm thinking just now that I should talk more about this in the future...
Employees who did exceptionally well during performance appraisals can expect rewards by means of salary or position upgrade or both. The reward serves as a motivating factor for employees to do best in their jobs. But giving rewards is a delicate thing. This is because, a reward given for a wrong reason can twist the employees' understanding of good performance. Following are the wrong reasons to give rewards:
· The employee has not been given a reward for a long time.
· The employee is too friendly to be exempted in the list of those who deserve their rewards.
· The employee will certainly complain if he/she did not receive what he/she think is right for him/her.
Reward is not an entitlement to be given to everybody after an appraisal. Only those who meet or exceed expectations should be given rewards so as not to defeat its purpose. Performance managers should therefore be clear with their criteria for giving rewards and make sure that only those who deserve it will receive it so that employee will continue to strive meeting standards and expectations.
One of the simplest and most effective ways of providing a payoff for a good performance is recognition. This type of feedback reinforces the good performance, and encourages the employee to repeat the performance.
Don't underestimate the need employees have for recognition. Any occasion when recognition could have been given but wasn't, for whatever reason, is a missed opportunity for you to provide a payoff for good performance and to increase motivation.
Management must be creative in giving rewards and recognition in order to excite employees to performance. At the same time, they have to make sure that the rewards and recognition fit the employees’ performance.
Next stop, Maintaining Discipline in the Workplace.