The phrase ‘performance management’ is a phrase that is often misunderstood or simply misused. I would agree, it is one of those phrases that is not exactly glamourous, and can really can be misleading.
So what is performance management?
Well in a nutshell, it is all aspects of how the organisation manages and maximises the performance of its people.
It is often viewed as a negative term. In fact we still often here the phrase, ‘xyz person has been put into performance management’ as if it was some kind of prison cell!
Many appear to think it is like a large vacuum cleaner that the boss fetches out of the cupboard from time to time and goes around ‘vacuuming up’ the poor performers when performance reaches a low point.
Clearly this is not the case at all, and in all great businesses, performance management is a way of life, it’s a culture of doing a handful of activities very well.
And let’s not forget, it’s about people.
…and the reward to doing these things better than most? Much improved performance.
It will seem simple, but great performance management is about two fundamentals, overlaid with five steps or stages.
So let’s start with the two fundamentals.
The first is about having the right people on the bus. The right people are the ones who have the mindset, the capability, the confidence and the motivation to appropriately prioritise the people aspects of their business activities. In essence, how well they demonstrate the right behaviours, which will maximise the performance of the people they manage.
The right seats is a phrase that relates to job roles.
So the people in your business who would be described as leaders and/or managers of people, absolutely need to have the remit to manage performance (i.e. that is part of their job), as well as the attitude, skills and right behaviours to do it well.
In other words, match the job role requirement with the strengths of the person in the job….don’t just promote your top accountant, salesperson or engineer to be the team manager, because it often just doesn’t work.
We do a lot of people engagement surveys, and one of the overriding messages we see from literally thousands of employees in businesses is just how important their relationship with their line manager really is. It is critical to their engagement, and therefore to their performance.
And there’s a saying, “an employee doesn’t leave a company, they leave a line manager”; and we see that played out all too often.
The second fundamental is all about the systems, processes and tools which support great performance. Yes, it is about people, and having the right people demonstrating the right behaviours in managing people performance will take you a long way.
However, if they are ‘bogged down’ by disabling processes, inadequate systems or absent tools, this can really reduce the will of people to want to invest their time in people performance.
This is where having a really good performance management software can help so much.
For the user, it improves accessibility to the right preparation tools, it helps with understanding the process, it guides and structures the key conversations, it raises the profile of people’s objectives, reviews and development plans and helps to collate feedback through the year.
For the central HR team, and for departmental managers, it helps to give much improved visibility on all the core components of performance – objective setting, feedback, annual appraisals and reviews and training and development activities to name a few.
All of this at the touch of a button….no emailing of spreadsheets or word documents, no bits of paper on the desk, no lost emails.
So if you have the right people in your business with all the right credentials in the right jobs, with the right processes, systems and tools, then you’re there….you can stop reading now!
However, most organisations in our experience do not have this in place, and many are a long way away from this ideal indeed.
So the two fundamentals must be overlaid with the five steps or stages of performance management. This is in fact a process, and we usually position it as an annual, cyclical one.
The Five Key Stages of Performance Management
One of the most important aspects of achieving great performance is everyone running to the same way of doing things. So often we see employee experiences that vary hugely based on which manager they work for, which department they work in, and what day of the week it is!
It has been shown by us and many others over time, that having one robust and proven way of doing something, that everyone understands and buys into is what great organisations do.
At PDW Group we call it ‘the PDW way’….and on the subject of performance management we have one way of doing it, which we know works well.
So here is a visual of our recommended performance management process.
This shows the five steps, which are:
Together, the above stages and process works incredibly effectively. Starting at the ‘overall direction’ box (box 1), ideally this and box 2 would be set from the start (say day 1 of the financial year).
Box three is then about the ongoing engagement and enablement of the person by the organisation, the person’s line manager and the resources to do the job.
Box 4 is the formal review. This is about a tangible line in the sand as to where the person is at the end of the 6 or 12 month period. This should cover their performance against targets, behaviours and any prior agreed development goals.
One big problem for professional services practices is, that almost all we know do some kind of appraisal or review, but far fewer set and publish proper personal objectives and standards of expectation. If you think about it, if box 2 is absent or not that great, how can box 4 be done properly….because how can you properly review direction, targets or standards that were never properly set?
Box 4 if done properly in essence results in either an over, at, or below performance result across these areas which then should instigate specific action.
These actions should be commensurate with whatever the outcome is, so for instance, if someone has delivered an ‘on target’ performance, then ideally the approach should be to ‘stretch’ them. If they are above target, it should be to maintain, and if they are below target it should be to develop.
In a nutshell, if performance management is embraced culturally as a positive phrase, and your people are the right people with the right mindset & behaviours, skills and so on this will be significant.
If you work to and embed the above process, ensure you have the right performance management software to manage the process and provide congruent templates and a journey, then this will, be the icing on the cake and your firm will outperform pretty much any other firm you compete with.