What do we mean by performance management?

Performance Management is the means by which you attempt to maximise the value you get from each member of your team to achieve business goals. Whilst this might sound a little cold, that is ultimately what it is, helping people to do the best they can to help you.

It is systematic and purposeful, it is about two-way conversations and development.  Whilst very few people come to work to do a bad job, there are probably equally as few that care as much about the business as you do. Typically, performance management involves a collection of activities including:

• Setting expectations
• Setting goals
• Reviewing progress
• Providing feedback
• Facilitating development
• Reinforcing the behaviour and conduct that results in improved performance

Why is performance management so important?

While it is fairly easy to see that increased performance will lead to greater efficiency and effectiveness especially in environments like sales or manufacturing, it can affect the bottom line in more ways than just that. Here are just a few examples:

1. Improved performance across the business – the higher the standard you accept the better performance will be because even those not directly involved in something won’t want to be found out as letting the side down. Harder, better, faster, stronger leads to an increased bottom line.
2. Higher levels of engagement – Promotions, access to development and other opportunities and understanding of how they make a difference when it comes to achieving organisation goals helps employees feel valued and want to improve more.
3. Higher levels of retention – When people are more engaged they are more likely to stay and be an advocate for the organisation.

How do you define performance?

Performance can relate to results or behaviours, so when considering how to define performance these are the outcomes to consider. It’s very much about ‘what you do’ and ‘how you do it’. The ‘it’ we are referring to can be a specific task such as typing a letter or making a widget or be more contextual such as how change is dealt with or how people support each other to achieve goals.

How do you measure performance?

And perhaps more specifically, how do you measure performance without it being a needless, time consuming job in itself? Now that doesn’t mean it won’t require effort, of course it will, but it should be value added and specific to what the organisation wants to achieve. When working in a shop, assessing how many customers someone has served will probably not be as useful as how much money they have taken. When it comes to behaviour, it may not be as simple as did this happen or not, in which case subjective assessments may be a more handy tool.

What are the phases of the performance management cycle?

Everywhere you look there will be a different variation of this cycle but ultimately most differ only in detail but the theory remains the same. There are usually the following phases:

1. Setting the expectation and planning
2. Monitoring performance and reviewing against expectations
3. Improving performance through development and removing blockers
4. Rewarding good performance

Phase 1 – Expecting Performance

At this point you are setting your expectations; this begins with the job advertisement and job description defining the relevant areas you are expected to perform in. Once the employee has started, clear goals and deliverables need to be set expressly stating what good looks like.

What is goal setting really?

Goal setting is good for setting expectations providing they are relevant and actually useful. Too often goals are unrealistic to the job or person and lack any sort of substance to make it useful. The goal of ‘making calls’ in a call centre is utterly pointless without some further detail to make it relevant and meaningful. Fortunately there are a number of acronyms that can be used to help set goals:

Specific Measurable Achievable Realistic Time-bound

Specific Measurable Achievable Realistic Time-bound Ethical Recoded

Purposeful Actionable Continuous Trackable

Frequently discussed Ambitious Specific Transparent

Phase 2 – Reviewing Performance

As much as any ‘job’ in the workday is important to a manager, so is the monitoring of staff members. This should be done regularly and feedback given there and then, as waiting to inform them only exacerbates problems and conversely could lead to performance waning due to a lack of attention being paid to them. This should involve two-way conversations rather than just dictating your thoughts and feelings on how they are performing.

How to review performance?

The best approach is strengths based and the easiest way to do this is in three steps according to Kluger and Nir summarised by the CIPD here.

1. ‘Eliciting a success story’: Ask the employee to focus on what’s been working well for them, identify a specific instance and expand on it in detail.
2. ‘Discovering your personal success code’: Get them to explain how they contributed towards this success (and what support they needed).
3. ‘The feedforward question’: Ask them to reflect on their current priorities and consider how they can replicate this ‘success code’.

Phase 3 – Developing Performance

Action is the key at this point. If you’ve been paying attention to them so far you will realise they are doing some bits good, some ok and some not so good. One train of thought would be to only focus on developing the stuff that’s not so good, others may say focus on making everything good. Personally, my view is minimise significant weaknesses but go full throttle on the things they are already good at.

How do you develop your staff?

The first way is the easiest and most obvious, have conversations. Engaging in purposeful performance conversations provides the opportunity to talk about their needs and interests and agree a professional development plan.

The professional development plan is where the development needs are documented and organised to help achieve the performance goals. This doesn’t have to be war and peace but should include what the development need is, how it will be measured, when the development will be achieved by and how it will be done. The term professional development plan is often used interchangeably with personal development plan but they do differ slightly, with a personal development plan being centred around a holistic view of improving oneself in general life, where a professional development plan is specific to work.

Other examples of which you can help develop people’s performance include:

• Peer to peer learning
• Shadowing
• Coaching
• Mentoring
• Training courses and events
• Secondments
• Professional membership

Phase 4 – Rewarding and Managing Performance

Mark Twain famously said “Action speaks louder than words but not nearly as often”. Whether someone is smashing it out of the park or staring at the sky wondering why they weren’t anywhere but there, you have to do something to either reward performance or make a change.

Rewarding performance has numerous positive effects such as increased motivation, morale, retention and of course increases the likelihood of continuous improvement.

Managing performance that is below expectation should always be dealt with informally in the first instance. However, should sufficient improvements not be made, then you may need to consider formal action to prompt more forcefully that an improvement is needed.