A new approach to performance management
Every organization wants it. Not many have it – at least to the extent they would like to have it. Of those that don’t, the problem often stems from the lack of an intentional performance management approach. Without the right processes, tools and capabilities in place, building accountability into an organization’s culture can be a fruitless and frustrating task.
When implemented with discipline and focus, a structured performance management approach helps keep everyone aligned with strategic goals. It also focuses people’s attention on what needs to get done and when. Without it, management can easily get off track and forget to measure and reward what it has told everyone is important.
An effective performance management approach:
• Communicates how individuals contribute to business success and how they will be evaluated
• Aligns individual goals with key business priorities, resulting in greater focus and more efficient use of resources
• Clarifies where to invest energy, which reduces the amount of time spent on low-value activities
• Provides a comprehensive system for recognizing what gets done and how
• Creates a discipline of measuring progress against specific goals and making adjustments as necessary
To achieve these results, performance management needs to be an ongoing activity, not a one-time event. It requires two-way conversations between a manager and an employee so that there’s consensus on what is being managed and how.
Five steps to effective performance management
Performance management starts with having a clear definition of winning. When an organization lacks a clear destination, it usually has many ill-defined ones. Employees feel unmotivated and uncommitted, and time, talent and resources get wasted on products and projects that go nowhere.
Having a clear definition of winning provides focus and clarity at the individual, team and organizational level. It gets everyone aligned and moving in the same direction while motivating and inspiring people to perform at their best. When employees know where they’re going and what they need to do to get there, it becomes much easier to reach their destination.
A good performance management approach involves five key steps:
- Establish goals. Define winning. Then link what needs to get done at every level to your strategic planning framework. Clarify outputs (not tasks) and timeframes for teams and roles.
- Develop a plan. Discuss short- and long-term development needs. Figure out how and when development will occur and prioritize development according to business needs. Create a plan to achieve the learning and growth that’s required and desired.
- Take action. Become great at providing feedback! Provide ongoing and frequent direction and support to your employees while they apply their energy and focus toward accomplishing goals.
- Assess performance. Evaluate progress and provide ongoing feedback to the employee on a formal and informal basis.
- Provide rewards. Create organizational programs or individual rewards that acknowledge and recognize employees for good performance. On the flip side, acknowledge poor performance with consequences or disciplinary action.
Management teams often spend so much time figuring out what needs to be done, how it needs to be done and when it needs to be done that they neglect to assign responsibilities to make sure it gets done. When people don’t know who’s in charge of a particular action item, they unconsciously default to, “It isn’t me, so it must be someone else.” To reduce ambiguity and wasted energy while ensuring progress, I recommend a process called “responsibility charting.”
When mapping out a project, initiative or action, list all of the people involved. This can include people directly involved in the decision, supervisors and managers, project teams, internal resources and people outside the organization. Then assign one or more of the following letters to each person based on their role in the project:
- R – Has responsibility for a particular action and the authority
- A – Must approve; has power to veto the action
- S – Must support/provide resources for the action (but not necessarily agree)
- I – Has input into the action but cannot veto
Only one person can have an “R” for each action; the other letters can be assigned to as many people as necessary. However, avoid assigning an “A” to too many people, as this can create difficulties when making decisions. Clarifying accountability helps prevent the finger pointing and discord that can occur when a deadline is reached and results aren’t achieved.
Use the right management approach
Effectively managing performance also requires knowing when to direct, delegate or develop. Determine which style is appropriate based on the task at hand rather than the individual. Often, people will need a combination of styles depending on the complexity of the task, their experience with the task, and the competencies needed to complete it well.
Direct when the employee has low to moderate competence with the skills and abilities needed to complete the task. Be sure to define excellence (what, how and when) and provide specifics (templates, examples) so the person can achieve the desired outcome. Direct when a person:
- Is new to a role
- Is new to the company
- Has new job responsibilities or tasks
- Has new ways of working
Delegate when the employee has moderate to high competence. Again, define excellence so both sides have clarity around the goal. Then let the employee determine the approach they will take and keep you informed on progress. Ask questions and provide direction and support when necessary. Delegate when a person has:
- Some experience in the role
- A track record of competence
- Confidence in their abilities
- Similar ways of working
Develop when the employee has high competence and high commitment to the task. Then define excellence and get out of the way. Give plenty of recognition for successful completion of the task. Then determine the person’s next challenge. Develop when the person:
- Has extensive experience
- Has demonstrated evidence of competency
- Is growing new competencies
- Is trying new approaches
Performance management is a joint effort. Leaders, managers and employees all have a role to play in creating performance excellence. Having effective processes and tools in place to manage performance makes it easier for everyone to perform well in their roles and to achieve your organization’s strategic goals.
Download the Vistage e-book Performance Management: Communicating Expectations and Evaluations