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How to... manage performance

With many employers fighting for survival there is increased pressure to get the best out of staff. This commonly manifests itself in a performance management system. However, there are real problems with this process.

Surveys in both the US and Britain reveal that few are satisfied with their systems. Despite this, performance management cum appraisal is a well-established practice that drives decisions about pay, promotion, terminations, transfers and training needs. So what are its defects and what can be done about them?

1 Review the system

It’s farcical to expect performance management systems devised years ago to remain effective. Would you expect it of your IT, marketing or financial management systems? Given the current emphasis on such practices as coaching, mentoring, 360-degree feedback, competencies etc, systems should not be allowed to remain static and become ritualistic, as they will quickly fall into disrepute and be neglected. A full formal evaluation exercise is central to attaining an ongoing successful system.

2 Engage the managers

The support of management is crucial to a successful system. This can be secured by involving managers in the system’s (re)design process and ensuring that they are reviewed on their performance management responsibilities. It also helps to secure feedback on the system’s effectiveness, making sure the process and any associated training is conducive to upward feedback to identify where it’s not being prioritised.

3 Address interpersonal and interviewing skills

Subjectivity, interpersonal skills and human judgments are inherent to the process of good performance management. Appropriate training, incorporating coaching and interviewing techniques, will help here. Reviews should start from jointly agreed objectives, focus on factual performance data rather than style or personality, encourage self-assessment and provide an appeal mechanism.

4 Define the objectives

Performance management encounters difficulties when addressing a number of objectives. For example, when used for reward-related decisions, any developmental impetus it is intended to have is threatened. Playing judge and counsellor at the same time is highly problematic. It is best to opt for a combination of agreed, consistent and compatible objectives. Where this is not feasible, some organisations opt to conduct separate interviews at separate times of the year for the separate purposes. Furthermore, many organisations are now concentrating on non-financial measures and assessing key competencies.

5 Remember to follow up

The manager who promises to provide additional resources or some form of personal development option is unlikely to enhance the system’s reputation (or their own) by persistently failing to deliver. In the long run, the system is judged by the extent to which recommendations arising from review meetings actually materialise.

6 Minimise paperwork

Managers already feel inundated with paperwork and so resent the additional and often extensive form filling associated with performance management systems. This is exacerbated by the fact that the forms are not “living documents”, but remain stored in the archives of the HR department. So it is important to remember that the purpose of performance management is to motivate the employee for the purpose of improving organisational performance – not to generate more paperwork.

Key points

- The main objective of performance management is to motivate staff to higher levels of performance.
- Don’t destroy your credibility and the system by making false promises.
- Keep the paperwork short and simple.
- Evaluate the system’s effectiveness periodically.