One of the most misunderstood and confusing terms in modern management centers on the use and misuse of the phrase “performance management.”
When asked to define this term, owners and high-level managers alike often simply refer to the “dreaded” performance review or appraisal system that may or may not exist in their organizations.
In Patrick Lencioni’s book, The Advantage: Why Organizational Health Trumps Everything Else in Business, he does a great job of simplifying and explaining this critical organizational activity by stating: “Essentially performance management is the series of activities that ensures managers provide employees with clarity about what is expected of them, as well as regular feedback about whether or not they are adequately meeting those expectations.”
Sounds simple, yet according to Lencioni and a host of other management experts, few organizations are good at performance management.
In your organization, like many others, are you puzzled about how to bring clarity and consistency to the organization? Do you understand the true mission, vision, and goals of your organization, or are they just words printed on fancy paper in a nice wooden frame?
Even if you do understand the mission, vision, and goals of your organization, are you communicating these messages on a consistent daily basis, or only around strategic planning, or when you’re feeling particularity talkative?
If you want to succeed, your organization must maintain the highest level of performance possible—and people are central to the success of any organization. Great employees make great teams that provide great service. But, in order for this to happen, you must provide great leadership, and great leaders start by providing all employees a clear sense of what is expected each and every workday—and why.
A simple, yet very effective, formula has worked for me over the years, and it is worth repeating. From the hiring process right through the employee leaving the company or organization, you as the leader should establish and continually reinforce expectations.
You should provide all the tools and resources necessary to set your employees up for success, and then you must hold everyone accountable to the vision, mission, goals, conduct, and behaviors that have been set forth.
Lastly, you must set ramifications for those behaviors, whether positive or negative. In my experience, an employee’s inappropriate behavior will not change unless there are ramifications for their behavior—everything up to and including termination.
I encourage each of you to think of performance management as a means of addressing the four major concerns we all have. And not just in performance appraisals, but in a broader work system context.
A comprehensive performance management system includes accountability and responsibility in these four areas:
- Client service
- Financial performance
- Process and systems
- Staff alignment and development.
Conduct an immediate and thorough evaluation of your current performance management system by reviewing and addressing the following key components, using those applicable to your specific type of organization:
- Accurate and up-to-date job descriptions.
- Hiring and selection processes that ensure you hire the best and the brightest candidates possible.
- Performance standards and expectations that make certain you are getting what you need and expect in terms of efficiencies and effectiveness, along with measurements to quantify the results.
- Appropriate orientation, education, and ongoing training.
- Repetitive training for existing employees on not only the technical skills, but the “soft” skills.
- Daily coaching and feedback. Practice M.B.W.A. (Managing By Walking Around).
- Quarterly performance development discussions about past behavior and future expectations.
- Effective compensation and recognition systems designed to reward people for their contributions.
- Promotional and career development opportunities for staff.
- Exit interviews when experiencing significant turnover to determine why valued employees are leaving your organization.
Owners and managers need both quantitative and qualitative information to support day-to-day and strategic decisions regarding organizational and employee performance. Effective performance management systems create the means to accomplish this goal.
By adopting a system as outlined in this article, you can and will manage the entire employee process from performance assessment, to goal alignment, to employee retention, providing your organization with the advantage necessary to be successful.