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It’s All About Performance – Or Is It?

Donald was the best sales executive they had. He consistently met or beat targets but in the end they restructured and made him redundant. Why? No one really liked him. He upset his peers, staff and customers. He did not “fit”. Sound familiar?

Someone wise once said “we seem to hire people for what they know and fire them for how they do it.” Performance management is all about improving performance and the satisfaction of employees. Delivering the results the organization requires and the needs of the individuals.

Performance without satisfaction, often the mistake made, is going to be short term. Using this as our basis for an effective performance management system, it becomes evident that all the other supporting people management systems have to be in place as well. The planning, development and rewards aspects of managing people are necessary to ensure they know what is expected of them and that they will be recognised, rewarded and provided with the development necessary to do their job and prepare for future roles.

The two major aspects to performance are what people do and how they do it. We have covered these in previous articles. We have talked about defining and measuring what people are hired to do and discussed certain competencies and behaviours which set standards as to how they are to perform.

If these are in place, documented and understood, then you have the basics of an effective performance management system. Now all that is needed is a process where manager and employee sit down regularly set goals and discuss performance and satisfaction – looking back to review and looking forward to set further goals and plan for development needs, job changes and any other issues that need to be addressed to improve the future performance and satisfaction.

Why do performance management systems fail so often?
For a management tool that has been around for a long time, performance management systems are often quite ineffective and do not deliver the results needed.
Our experience has been that the major cause is lack of commitment from the top. The CEO needs to embrace it and it should be seen as part of every manager’s job – not an extra. Training may be needed for this for both managers and employees.

What does a good performance management system deliver?
In simple business terms a good system delivers improved results for the organization. These results are sustained over time by people who enjoy improved satisfaction and achievement from their work.

What does an effective system look like?
It looks simple. It provides an ongoing process for people to perform well by:
• Agreeing goals and behaviours
• Agreeing measures – how will we know we have achieved?
• Providing regular feedback
• Evaluating any gaps
• Taking action to close gaps
• Celebrating successes
• Agreeing new goals

But on its own this is not enough. It needs to be supported by providing:
• Worthwhile work – people have to believe their work makes a contribution
• Clearly defined and demonstrated company values
• Appropriate rewards

People want to know how to deliver results, why they should deliver them and gain satisfaction and recognition for doing so.

Steps for implementation
To implement a successful performance management system:
• Clarify and communicate your values and required behaviours
• Clarify jobs, where they fit and what they should deliver
• Introduce the system and train all users – managers and employees
• Implement and use the system
• Measure your improved results and satisfaction

Providing consistent follow through, recognition and rewards for good performance along with appropriate corrective actions where standards are not met should help consolidate the process into the organization.

Paul Phillips is a Director of Horizon Management Group; a specialist human resource management consulting firm. He has over 30 years experience in HR and, while based in Australia, has worked in a number of overseas locations.