It seems like this past year has been an important one for organizations to invest in their performance management practices. Over the past 12 months, I have had the pleasure of supporting a number of companies to set up or improve their organization's performance management system. A broad variety of firms, both small and large, high-tech to low-tech, have wanted to: a) know where to start building their practices when they have little in place, b) improve or simplify what they already have so as to move their performance documents and conversations to the next level, or c) totally revamp problematic or ineffective practices. For your company's benefit, here is the culmination of my thinking on this topic of installing a system that effectively defines, plans, focuses, develops, evaluates and rewards employee performance.

Are You Getting Quality Performance from Your Performance Management Practices?
By Harvy Simkovits, CMC

Are your employees working to their full capacity and growing to their full potential within your organization? Do they sufficiently understand their jobs and what is expected of them, and how their jobs are interconnected with other areas of your organization? Is everyone developing the capabilities and strength of character they need to serve your business well? Do you have a good record of performance plans and accomplishments so as to have clear work contracts with each employee and a sound basis for recognition and reward? Are your reward systems in sync with what retains and motivates your good performers? Are you effectively weeding out the weak performers, and spurring the best and brightest to even higher levels? Is your management team committed to effectively using the performance management system you have currently in place? If not, then maybe you need to rethink how your organization manages and develops the performance of its people through a more rigorous Performance Management (PM) system and practices.

Here are four elements that need to be well in place in order to make your PM system work effectively. If any element is weak or missing, then it may undermine your whole set of employee performance practices.

1. Your PM Process - Without instilling an effective, consistent and repeatable PM process into your organization (i.e., the right set and sequence of performance-related conversations between managers and employees), every person of authority will handle PM in a somewhat different way. Even worse, PM might not get done at all, leading to misaligned or misunderstood expectations between managers and employees.

An effective PM process:

• Begins with defining job and capability expectations for each job category within your organization - what I like to call "defining the 'shoes of the job' to be filled".

• Sets goals for each employee in order to know how he or she is to "fill those job shoes." Goals are specific, measurable, desired changes and improvements that managers and employees contract for at the beginning of a performance year, and then work like heck to deliver on during the course of that period (unlike job definitions, which establish the roles, parameters and boundaries of a person's job position). Goals tell employees what they need to focus on and accomplish during the course of the upcoming year in order to serve the business well.

• Allows the sharing of individual job definitions and goals so as to get everyone's input in horizontally coordinating and vertically aligning people's efforts across the organization.

• Sets up a reporting system whereby managers are automatically kept informed about their staff's activities and goal progress.

• Regularly reviews each employee's goals during the course of the year, as well as at year end, so that employee efforts are kept on track, or those efforts are recalibrated if things are progressing faster or slower than expected.

• Gives managers an opportunity to provide regular coaching and feedback so that employees continue to improve over the year. In addition, they are not surprised at the end of the performance year with an evaluation that does not jive with the feedback they have been getting throughout the year.

• Bestows tangible rewards and employee advancement that is consistent with performance levels achieved, be it in terms of desired, measurable results (e.g., increasing sales revenue) or desired employee behavior (e.g., making more sales calls). Note: rewards that are inconsistent with employee performance may breed resentments that can spoil the attitudes of even your best performers.

2. Your PM Documents - Your PM documents need to parallel the process defined above. Typical problems seen in PM documents are that they:

• Do not well explain the purpose, process and types of PM conversations that need to happen at the beginning, middle and end of the performance year.

• Begin with the end of year evaluation, rather than the beginning of year goal setting; thus, not following a sound contractual process between manager and employee.

• Spend more space on evaluation rather than goals; thus, being more about looking back into the past rather than looking forward into the future.

• Do not separate out the different types of goals and accomplishments (i.e., job, capability and career) that need to be uniquely addressed in manager/employee conversations.

• Do not encourage performance data collection from all important sources where the employee carries out their work.

• Do not ask the right questions, or provide the best frameworks that stimulate good conversations between managers and employees about both past accomplishments and future desired outcomes.

• Have a rating system that causes consternation among employees, or causes grade-inflation where everyone gets rated near the top of the scale.

• Focuses the manager's attention on just filling out the forms rather than having an effective manager/ employee dialog.

• Sit in a drawer during the course of the year and are not regularly reviewed in order to track and update a person's performance.

If your company suffers from any of these problems, then a redesign of your forms may be in order.

3. Your PM Education - The manager/employee relationship is critical in ensuring a well performing employee. The ability to effectively judge, develop and learn about an employee's performance is all a part of having a sound relationship. Too often, managers are asked to review their employees' performance when those managers have had insufficient training or experience in knowing how to sit down and talk to their people about performance issues.

Typical skills that managers need so as to have sound and sensible performance conversations are:

• Basic human-interactions skills: knowing how to listen, confront, support, and effectively praise and/or reprimand employee behavior

• Knowing how to have effective manager/employee discussions: job defining, goal setting, performance evaluation, salary review and career advancement

• Continually being able to assess employees' performance issues and work style, and guiding employees day-to-day to achieve their best

• Knowing how to develop people over the long-term through effective delegation, coaching and situational leadership

• Helping employees improve their personal effectiveness through creative problem solving and rational decision making, as well as through personal organization and time management

This may seem like a lot to cover. However, most of this can be effectively provided through a modular management-development and coaching program that spans the first 1-3 years of a new manager's tenure. Would that not be a worthy investment when you consider that a manager's tenure can span decades as well as affect dozens if not hundreds of employees over that term?

4. Your Management's Commitment to PM - Your Company’s top management needs to demonstrate its commitment to PM by:

• Using the established PM processes and documents themselves in defining, planning and appraising their own performance,

• Getting better skilled on how best to have performance conversations with their employees, and in coaching their middle-management to do the same,

• Investing in building the right processes, documents and training for the organization.

Otherwise, the rest of the organization will just see management providing lip service to performance management; thus, not be fully committed to it themselves.

Having a sound PM system in place can work to engage and focus your employee's energy, grow your people's capabilities, advance your top performers, as well as weed out your worst performers in a sound, rational and consistent manner. An investment in a sound PM system and practices can provide a great return on its investment for your business as well as its biggest asset, your people.