Setting up an Effective Performance Management System.
Performance Management is possibly the 2nd most confusing business process after Change Management. Performance Management is simply about promoting a continuous appraisal of employee effectiveness. This appraisal function can turn eventually into a continuous process where organizations / managers and employees liaise to enhance better planning, monitoring and reviewing of an employee's work performance. Performance Management also aims to align the employee’s overall contribution with the vision of the organization.
In the unending confusion of organizations and HR departments not being able to clearly define what Performance Management is, most of us are caught in always confusing it with the traditional annual appraisal.
Unfortunately, many writers and consultants are suffering from the same confusion. Some of then even confuse Reward Management, Awards, Bonuses and All Sorts of Employee Evaluations and call it Performance Management instead of using the right relevant terminology
Performance Management should eliminate the traditional need for employee evaluations, employee reviews and performance appraisals. A better understanding can be achieved when the above term is broadly looked at.
The Brief Intro to Performance Management.
Performance Management is defined as “the process of creating a work environment or setting, in which people are enabled to perform to the best of their abilities. It is a whole system / framework that begins from the putting together of the job description, its KPIs, hiring and ends when the employee resigns or leaves your organization”.
Clarification: What is NOT Performance Management:
- an annual appraisal action - it should be more frequent than once a year
- a preparation for an appraisal
- an opportunity for an annual self-evaluation
- a form nor a measuring tool for organizations to track the process, progress and improvements of their employees.
A Performance Management Cycle should be inclusive of
- Performance review and assessment
- Performance development agreement
- Management of performance throughout the year
Preparing an Effective Performance Management Framework
In order to create a highly effective Performance Management Framework / System, the organization / HR Department must take the time to embark on developing an effectively designed HR system that can support the management process.
The following points must be taken into serious consideration.
#1. A well- thought of / designed job- portfolio plus well- written job descriptions
#2. Clearly defined annual KPI's (Key Performance Indicators)
Note: Just because the KPIs are defined for the whole year, it does not imply that you should not evaluate and readjust them -whenever needed, i.e. several times throughout the year.
#3. Effective supervision of your Performance Management Framework/System in correlation to the employees.
#4. Comprehensive employee orientation and training, mentoring and coaching if necessary. Actually, it is highly recommended that all these take place proactively instead of the usual reactive tenancy to do such only when we spot a problem.
#5. A positive and supportive work environment.
This is by- no- means an exhaustive list of points.
Considerations for an Effective Performance Management System
The establishment of an effective performance management system in a robust organization requires time and resources; planning too.
It will obviously need the support of:
- the Board
- all Executive Body and Committees
- the Managers at any level of seniority, and
- the employees themselves, who they will have to accept support and ‘safeguard’ your Performance Management System.
In the development of a new Performance Management System, an organization can strike up a committee made up of selected employees, managers and board members or consultants like HIREghana -who specialize and understand the Performance Management, to increase the concept, input, understanding and support for the Performance Management process.
Your organization’s Effective Performance Management System shall:
- Be job specific, gender biased but most importantly will cover all departments or a broad range of jobs in your organization. If it is not job specific, it is very questionable whether it could ever be effective.
- Be in alignment with the strategic vision, mission and culture of your organization.
- Provide a clearer outlook on an employees performance by monitoring and measuring what his/her results are and how they are achieved. The how might give you possible new insights into work process bottlenecks, organizational development issues, need for employee- training, etc.
- Be comprehensive, practical, easy to use and implement. Empirically, Lack of practical approach usually results in failure of any new system and change people try to implement in the workplace.
- Create simple, ‘2-way’, open, transparent and clear communication between the organization, department, managers and employees about what they are expected to accomplish, by when and how and at what level of quality. Telling your employees what to do and how you will measure their performance without their feedback and explicit agreement, it always results in disaster (even if mediocre managers choose to ignore it). If your employee cannot deliver a KPI, you better know it asap and understand what the underlying issues are, so you can address their resolution.
- Include an all-hands-in process for defining, setting goals and reviewing of performances based on two-way communication between the employee and manager. Please see comments in the previous point.
- Also, include constructive feedback or reward mechanisms / positive feedback for a job well- done and encouraging feedback when improvement is needed.
- Always provide constructive and continuous feedback on performance. Actually feedback should (almost) always be positive, because if something needs to be improved you should take the positive approach on how this could take place (assuming that you are committed to your employees). When and why to fire an employee is a whole topic of its own right and the topic of a future article.
- Provide training, mentoring, coaching and development opportunities for improving performance
- Ensure that all employee work-plans support the strategic direction of the organization. Make sure also that the employees understand the how; i.e. that they have a clear comprehension of the impact of their work deliverables.
- Identify and recognize employee accomplishments, areas of poor performance and help find ways to improve performances
- Comprehensively identify training needs, development and career progression opportunities and support its staff in achieving their work and career goals.
- Support the organization's administrative decision-making about promotions, terminations, compensation and rewards.
- Cover all legal loopholes in a way that ideally protects both parties.
Whether your organization is modifying an old Performance Management System or setting up an entirely new system, it is most prudent and important to communicate to all stakeholders -obviously the employees are stakeholders too, the purpose and the entire process before the system is implemented.
The 3 Phases of Performance Management
Planning Phase, which is a combined effort involving both managers and employees during which they will:
- Identify and review the employee’s job description to check if it reflects the work that the employee is currently doing and if they need updating of responsibilities. By doing this, the get to review if the employee's output is in alignment with organizations strategic path.
- Identify key areas that will be key performance objectives for the year, the objectives that will help the employee grow his or her skills, knowledge, and competencies related to their work.
- Identify training objectives that will help the employee grow his or her skills, knowledge, and competencies related to their work. Zone in on career development objectives that can be part of longer-term career planning.
- Both the employee and manager need to sign off on the proposed work assessment plan. A copy of the plan should be given to the employee and another should be kept in his or her confidential personnel folder.
- All objectives need to be SMART
Monitoring day-to-day performance does not mean employees have to be micromanaged but rather pay attention to achieved results as well as individual behaviors and team dynamics affecting the work environment.
Employee and manager should meet regularly to:
- Continuously assess progress towards meeting the required performance objectives. They also need to identify any / all barriers that may prevent the employee from accomplishing performance objectives and new strategies that can be implemented to overcome them.
- Identify any changes that may be required to the work plan as a result of a shift in organization priorities or if the employee is required to take on new responsibilities
- Determine if any extra support is required from the manager or others to assist the employee in achieving his or her objectives
Reviewing Phase, which is about summarizing and highlighting the employee’s performance over the course of the review period by having an appraisal meeting or performance assessment.
Managers should review their performance management notes and documentation generated throughout the year in order to more effectively assess the employee’s performance. Only issues that have already been discussed with the employee should be part of the assessment documentation and meeting. This will ensure that managers deal with performance problems when they arise and that there are no surprises during the performance assessment meeting.
This is a very complex topic dominated by lots of confusion and it’s a lot bigger than what can fit in a few pages.
This is just the first article in a series of articles I plan to write on this topic. Think of it as Performance Management Food for Thought.
Thank you and Good Luck,
About the Author: Irene Gloria Addison is the owner of HIREghana [Human Intelligence Recruitment], a Leader Ghanaian Recruitment Agency and also a HRM & Organizational Development Consultancy, based in Accra. Performance Management is one of our areas of specialization.
Irene welcomes your feedback/ comments/ remarks/ suggestions via your email message to Press at HIREgh . com; she can be reached at +233 50 228 5155 or +233 266 555 907.
Our website is http://www.hiregh.com