Performance Management

January 15, 2012 |
Performance Management Performance ManagementWe live in a world that is constantly trying to improve and reinvent itself and this is only possible by improving on what has been achieved in the past. In today’s corporate or even our personal lives we are constantly aiming at higher standards, budgets, targets, efficiencies and the list goes on. The only way we can improve on what has been achieved in the past in to monitor and manage our current and future performance, known as performance management.


In a corporate world performance management is defined by Armstrong and Baron (1998)as a “strategic and integrated approach to increasing the effectiveness of companies by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.”

There are numerous articles and publications covering performance management however we have tried to narrow it down a bit and take an overview of the essential elements and highlight the importance thereof.

In order to effectively manage performance a few key elements are essential. In order to ensure that performance management is effectively implemented and exercised we believe that these elements should be present throughout the process. Herewith the elements as follows:


·       Job Description/Profile


The job description/profile outlines and individual’s main objectives and performance standards expected of an incumbent in a particular position. This is normally obtainable from the Human Resources department. The job description/profile is the road map which should be used for various HR processes including recruitment,  performance management (that includes managing poor performance), establishing training needs, job grading, remuneration benchmarking and various other organisational development and talent management initiatives.


Unfortunately many organisations omit to implement or use job descriptions/profiles which could lead to employees feeling directionless and ultimately lead to employees being unhappy as a result of the lack of direction.


If you do not have a job description/profile be sure to ask your superior for a copy of the document as this will provide the blue print of what is expected of your position.


·         Objectives


We all have objectives in life, whether personal or professional, as this gives us direction and purpose. Preferably objects should not be pie in the sky material as then they would not be achievable and we would quickly lose sight of what we set out to achieve.


In the performance management process objective setting is a vital element as this provides the organisation with the goals and targets in order to improve on previous performance and takes the organisation forward. Goals and targets are normally set by organisations board or top management team after which a strategy is devised to achieve these goals and targets. From the strategy an action plans is formulated and in turn objectives are devised to ensure the action plan is achieved. Generally speaking this is a top down approach.


The difference between the job description/profile and objectives is that the job description/profile takes a broader view of what is expected of an employee in the normal course of their duties however objectives are current to your organisational and departmental/business unit strategy in order to ensure that energy is focussed in achieving current  and long term organisational objectives.


Therefore it is incumbent on every employee and manager to ensure objectives are set within the framework of the job description/profile to achieve current organisational goals and targets. This not only provides direction to your actions but it also acts as a yard stick on measuring performance and applying corrective action, if needs be.  We will cover more on objective setting, including SMART objectives in futures blogs.


·         Management Commitment


There are many performance management systems out there, whether good or bad however almost 90% of the time the success of any performance management system is determined by management’s commitment towards the success of the system. In order for any performance management system to be successful management would need to invest resources whether it be time or money to ensure desired outcomes are achieved.


Management would have to invest time into performance planning where employees and management would set objectives and subsequently engage in performance appraisals and coaching to give feedback on performance and correct performance. This is a vital step in any performance management process and it often happens that managers are consumed in their day to day operations to focus on individual employee performance and this ultimately ends up in being a lose lose situation where as a result of the omission to engage in performance management the business objects are not achieved because the sum of the parts of the system not being aligned. The employee objectives are therefore not aligned with management objectives.


Furthermore management would need to be prepared to invest money and reward performance where it is due as this can be a major attributing factor to employee morale in return performance.


·         Regular feedback


We would like to believe that most people would like to receive regular feedback on their performance. This is not only to the benefit of the individual employee but it provides an opportunity to align objectives and correct misguided performance. Often feedback sessions, whether formal or informal,  creates a platform for management and employees to openly engage on operational matters which in the end enhances organisational performance. It is therefore encouraged to have regular one on one session with employees and managers to ensure personal objectives are aligned.

Performance management when managed effectively can intensify effective delivery of organisational goals and generally there is a direct correlation between performance management and enhanced organisational performance. Some of the benefits of performance management may include:

Potential Benefits:


  • Reduced turnaround times to create strategic or operational changes by communicating the changes through a new set of goals and objectices
  • Improved sales
  • Cost reductions
  • Organisational alignment behind board/management goals
  • Optimizes incentive plans to specific organisational objectives
  • Creates transparency in achievement of goals
  • Improved employee engagement through everyone understanding how their contribution is directly contributing to the organisations high level goals
  • High confidence in bonus payment process and remuneration increases
  • Individual development programs are better aligned directly to achieving business objectives
  • Detect misalignment of objectives and implement corrective action at early stages
  • Business flexibility and responsive to management needs
  • Helps with audits and general compliance
  • Simplifies communication of strategic goals

For more information or assistance on performance management or HR business requirements please give Master Retailing a non obligatory call to discuss your business needs.

Category: Blog

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