Is your Performance Management System Working?

Performance management system basics

Is your performance management system damaging employee performance? Do some managers put off their annual appraisal meetings because they dread the process as much as the employee? If that’s the case, let’s review a few of the basics of performance management to guide you in the process.

• Employees must participate in the creation of their performance expectations. If employees do not help create the standards by which they are judged, they will not feel ownership of those standards. And ownership produces the commitment and drive you need for organizational success. These performance expectations become the “how” and the “what” to guide the employee.
• Performance expectations should include desired behaviors linked to the culture of the organization. These behaviors are the actions the individual must do that align with the culture of the organization. Each employee must live the core culture principles each day in a variety of ways. These standards are not limited to a particular job; instead, they are across-the-board standards that everyone must adhere to and thus ensure that the culture is expressed continuously. For example, if your organization is all about “attention to detail,” then each employee is guided by that standard.
• Performance expectations should include desired behaviors linked to the job. With each job, there may be unique behaviors that are required. These behaviors must be incorporated in the standards for the employee.
• Performance expectations should include expected outcomes. Employees must have defined outcomes to achieve that link to the organization’s goals. These individual goals give the employee a big picture view of the organization’s strategy. By understanding the individual outcomes that will contribute to the organization’s goals, each employee can be a key player in moving the organization toward success.
• Ongoing feedback is the key to improved performance. Highly engaged employees get daily, weekly, or monthly feedback–not just an annual performance review. But there’s one problem with feedback: it’s not so easy to do it right. That’s why so many managers avoid it. Feedback must be timely–provided as close as possible to the occurrence of the behavior. That’s a feature that annual reviews can’t offer. Feedback must also be specific–it must describe the behavior in exact terms. Feedback must be genuine–using personal pronouns such as “I.” And feedback must be given in a supportive and positive environment. Feedback can be an informal, ongoing exchange.
• The performance review session offers an opportunity to plan for the employee’s development. An employee’s performance–in relation to the behavioral standards and expected outcomes–offers a good opportunity to discuss development needs. Use the performance review as a time to identify areas for development and a plan for obtaining that development.
• Does the employee get a score? This is a key question to answer because “the score” is what contributes to the threatening nature of the process. The score is what can make employees get defensive. The score is what causes discussion to be distracted from the real intent of the process–to improve performance. If your purpose is to have a rating to guide pay, rewards, and reduction in force, then you will need a number. But be clear: the process then becomes less of a development tool. Some organizations have pay and promotion discussions as a separate activity. That allows the review to be solely a development tool and more open discussion usually occurs when there is less concern that pay will be impacted.
• Managers must be trained in the performance management process. Giving feedback and  consistently using the scales for measuring one’s performance are essential skills. Don’t assume all managers have a consistent understanding of the standards and the scales used or the necessary skills for giving effective feedback. Discussion and training are often required for the process to be effective and to do what it’s designed to do–improve performance.