Get your performance management right - Part One
A “common sense” practical approach to performance management will work wonders for your company. By Dr Mark Bussin
I have been talking at conferences and lecturing to thousands of people for several years. Whenever the opportunity presents itself I can’t resist asking the audience just one question.
“Who here can say that they have an excellent performance management system in their company, and it is working well and folk think it is fair?”
This article is inspired by the 99% of people who did not put their hands up. I started wondering why there were so many people who thought that there was no successful performance management system. I have been lecturing in performance management for several years and many pass the course – so there are many practitioners out there. They understood the concept and how to implement it. There are thousands of books and gurus on the subject. Yet there are so few examples of where it is practised well.
“Why?” I ask myself, “What is missing?”
Everyone knows what performance management is, have read the books, have heard the gurus, yet there are so few outstanding success stories.
The second reason that inspired me to write this article is a philosophical question I have been asking myself for years. I have children and I praise and guide them like most other parents do. I hope that we have raised them well and, God willing, they will lead happy and successful lives. I wonder if this whole cycle is, broadly speaking, similar to performance management. It is not an event, but a continuous process – the way our family does things.
When they do well, I praise them straight away. I don’t wait for a week or a month to pass before doing so. Similarly, when they need guidance, I do it almost immediately. I don’t wait for a few weeks to go by. I do it in a positive and nurturing way. If they need extra lessons, we arrange it. There aren’t elaborate forms and plenty pieces of paper to fill out. I wonder how similar this is to performance appraisal. We all do it in our homes almost every day with our children, family members, the house help, the garden service, the plumber and any other service provider.
Why, then, when we get to work, don’t we know how to do it? Are there lessons to be learnt from this and is there any empirical evidence (scholarly research) to support this? Yes, there is!
Performance management defined
There are more definitions of performance management (PM) than books on the subject. In plain language, PM is a continuous process of improving individual, team and organisation performance. It is about having a conversation and engaging each other on how to improve performance.
If your system is not doing that, then it is not working. As the analogy goes, the best strategy when riding a dead horse is to dismount. Feeding it carrots or beating it with a stick will not get it to work better. The same goes for a PM system that is not working. It is better to ditch it and implement a system that will work.
Some critical success factors
1. Short performance appraisal forms
Performance management systems have one important leg to them called performance appraisals. Some think that the more comprehensive (longer) the appraisal forms are, the better the system. In my experience, the longer the form, the more likely it is to hijack the conversation. A one- or two-page form that has between four and seven objectives is good enough to facilitate a conversation. It is not intended to be a job description. The other 25 things that one needs to do can go into the job description.
2. Clear rating scale
A clear rating scale is essential. The most commonly used rating scale is a five point rating scale that has the following descriptors:
5 – far exceeds requirements;
4 – exceeds requirements;
3 – meets requirements;
2 – meets some requirements; and
1 – does not meet requirements.
Avoid using adjectives like “outstanding”, “excellent”, “superior”, “star”, “fantastic” and “exceedingly good”. These words mean different things to different people and, by the way – which one do you think is the best rating?
3. All have attended PM training
To alleviate things like rater bias and bad experiences, all employees should have attended the PM training. Being a manager doesn’t necessarily qualify someone to be good at PM. It takes some skill and practice.
4. The objectives or KPAs should be written as outputs
Outputs are a profound way of expressing what needs to be achieved. It also leaves the “how to do it” to the person doing it, thus empowering them. Writing outputs takes some practice, but when one gets it right, it is probably the most powerful performance management system in the world. Examples of outputs are:
- Architect – to produce accepted designs;
- Gardener – to have a healthy garden;
- Consultant – to have informed and satisfied clients who pay the bill;
- Trainer/lecturer – to produce managerial candidates; and
- Secretary – to ensure effective administrative support.
5. The CEO owns PM in the company
Too many people in organisations think that HR owns the PM system. A main objective of PM is to drive the organisation strategy and for this reason, the CEO should own it. In high performing organisations, the CEO ensures that:
- first line reports have explained the organisation strategy to their teams;
- all directors have had at least two performance appraisals with their staff;
- no performance appraisal appointment with subordinates are postponed or rescheduled;
- aggrieved employees have reasonable access to superiors on higher levels without being victimised; and
- every single employee gets performance feedback at least twice a year.
Some CEOs make the directors’ pay increase and bonus dependent on these things.
Dr Mark Bussin is the Executive Chairperson at 21st Century Pay Solutions Group, www.21century.co.za.