Performance Management for Success

I can usually sense the state of an organisation's Planning and Performance Management systems when I first walk in. If the staff are purposeful, with direction, positive and clear, and relatively calm and assured in what they are doing, and this is not only one or two lone wolves, but most of the pack, I know they have effective systems without asking... In this Blog I discuss the ingredients of a successful Performance Management System...

Chris was a friend of mine.We went fishing together, exchanged stories of surfing and growing up in the same town. We had been equal colleagues and now I had become his manager. I trusted his wisdom, judgment and abilities implicitly, but he looked disturbed and demanded to see me.

“Things seem to be going well Chris; how is it from your end?”

“Not so good!”

“What’s the problem?” I asked

“You are!” said Chris.

I was gob-smacked and asked “why?” He replied: “I never get the time to talk to you to share issues, get the confirmation, support and direction I need. I need your time!”

I rocked back in my chair and thought “By God, he’s right!” I had given so much to the issues in the organisation, big noting with the politicians, executives and external parties that I had neglected one of the key people who delivered the service.

What Chris wanted, was the same as anyone in the work environment – to be acknowledged, to know that they are doing a good job, to be sure they are going in the right direction, to share their issues and to be valued for what were doing. Lack of attention meant none of these were happening for him.

Whenever I am consulting with an organization I often ask about their Performance Management System. I usually get one of several responses. Often people will tell me that they had done a performance review in the last year and did this each year. Or they will say “I do some goal setting with my staff occasionally, and we probably need to do it again.” Or they say “I did it with my staff but I have never had a review with my boss.” Even with those in organisations that have a system will often say: “We do it because we are requested to, but it is a ‘tick-box’ and relatively useless exercise.”

All of these responses are missing the point! Having a Performance Management System that is reduced to a post-facto review – where staff are told what they did wrong in the last year, or a system that does not capture the right information, or a system that sits on the shelf and is only sporadically implemented – is worse than having no system at all. All it does is make staff cynical about management and inoculates them against a good system when it may be introduced.

If a Performance Management System is good and links to the Planning Programming and Budgeting System the effects can be transformative. I have often said that if an organisation has a good (PPBS) and a good Performance Management System (PMS) then 85% of the issues for an organisation will either not arise or be easily solved.

I can usually sense the state of these two systems in an organisation when I first walk in. If the staff are purposeful, with direction, positive and clear and relatively calm and assured in what they are doing, and this is not only one or two lone wolves, but most of the pack, I know they have effective systems without asking. If, on the other hand, I hear of directional conflict, or an over-enthusiastic desire to change, or complaints about various aspects of the organisation, or I see some staff are disengaged and performance and demeanour is erratic, I know they do not have a good PPBS and their PMS is either non-existent, no good, or not implemented.

What then makes a good Performance Management System?    

1. It must be proactive:That is it should be based on goals, set usually at the beginning of the year and then adjusted every three months or so depending on progress and what else has come up.

2. Personal Goals or Personal Developments Plans must be linked to organisational programmes projects and organisational values, as outlined in Strategic and Business Plans.These should be broken down into the roles that individuals must play and the behaviours they must manifest or work on adjusting - so they can see their role in organisational strategy and mission and know what the values mean for the behaviour they display.

3. It must be based on reflective conversation: A key ingredient is periodic and scheduled conversation between the manager and his/her staff member. It not a “business as usual” conversation; it is about progress with goals, attitudes, contribution to organisational outcomes, reflection of organisational values and how these are manifest in the individual’s behaviour. It is also two way – staff members must share their issues with their managers and identify the support or resources they need. This is the conversation that Chris was wanting.

4. It must be divided into cycles with no formal “evaluation” until the year-end.  Each three to four month cycle offers the opportunity to adjust the original plan for changed circumstances, or encourage a refocus on it as the case may be. Doing this too often is not productive but leaving it too long is worse. Six weekly is too often and six monthly too long. When the end of year review or evaluation is carried out, every chance for success has been given. If the direction that the staff member needed to take and the support needed from the manager was clear from these conversations there is no excuse for failure by year-end. If coaching has been regular with Plan adjustment for uncontrollable circumstances failure is not an option.

1. Performance review or evaluation must be linked to organisational development and training.Too often I see staff members’ individual development plans either existing outside the organisation’s development plan, or the training they are undertaking has nothing to do with the organisation but enabling them to get a job in another sphere of activity. Training and development should enable the individual to either perform their job better or train them to progress within the organisation and contribute to its growth. There is usually an enormous amount of wealthy information in the feedback given in performance discussions - feedback that can usually set the basis of a training needs analysis and lead to the changes that are needed in the organisation.

2. Success and failure must have consequences.If a good system is put in place, positive outcomes need to be recognized and rewarded and negative outcomes or behavior should result in a focus on things that need to be done to rectify the situation, warnings, or disciplinary action - if warranted. While at a philosophical level I would like to say that I am neutral as to whether performance should be linked to pay or pay increases, at a practical level I am a strong supporter of such linkages. Pay linkages provide some with incentives but more importantly place the obligation on the organisation to ensure the system is working fairly and effectively, even in service organisations where profit is not the motive. I worked with one organisation for a number of years and the organisation was growing and increasing in its performance when measured by a range of factors. However as soon as the governance of the organisation took the incentive off the CEO for such the performance management process the whole organization slipped, lost focus and lost credibility.

3. Its implementation must be fair and consistent:In my experience more staff leave an organisation because they feel they have been treated unfairly than for any other reason. Poor implementation of a performance management system can leave a bad taste in staff members’ mouths. A few years ago I consulted with one large multi-service organisation. Staff in most departments had performed well and met or exceeded their KPIs, but one department had made a bad business decision and eroded the profit of the whole organisation. Management advised all staff that as a result of this there would be no performance bonuses. You can imagine the near riot it generated!

A few organisations I have worked with balance performance reward on the outcomes of the individual, the unit and the organisation to ensure teamwork and corporate contribution. Another organisation had an annual consistency conference after reviews were done and before rewards were distributed. Each unit’s efforts were compared to their annual plans and their corporate contribution and achievements were compared, and an overall allocation was provided to the unit; those units that performed better had more to give to staff and lesser performing units got less. The unit manager, in consultation with his or her manager, could then allocate that how they saw fit to individual staff. It was possible for some staff in poor performing units to get large rewards but if they did others in their unit would get less. Those units that performed well had the ability to reward all well although individual contributions also be recognised.  

I remember one outstanding staff member in a reasonably well-performing unit received a large bonus. She felt her success belonged to the team and proceeded to equalise all of their rewards with hers!

This throws up the question as to whether rewards should be financial or not and what are motivating reward systems – this is the subject for another Blog!