Managing performance is about getting the best out of people – motivating and helping them to achieve the objectives of the organisation. It is not easy to set up and run an effective system for managing performance. Managing performance is what managers do. If they do it well, the people who report to them will do their own jobs more effectively.
The starting point is to decide what the strategy for the business actually is. What is its broad context? What are its longer-term goals? This will shape how the company may want to manage people and teams.
There are three imperatives:
- to be clear about the accountability of each job. What is expected from it? There must be measurable outcomes
- to make sure that each employee understands those accountabilities, expectations and outcomes
- to set out agreed measures of success for the employee, and the controls necessary to review progress such as formal and informal reviews.
Any system for managing performance must fit the particular organisation and its parts.
- It should not be complex or create lots of paperwork.
- It must be initiated by the senior managers and owned by the business, not by Human Resources (HR).
- It should be synchronised with the business cycle.
- It must measure the things that are important for business success.
- Skills in managing performance (the ‘how’) are more important than the system (‘the ‘what’). So start with the people who will do the managing.
Most systems have some form of annual appraisal. But all too often it is seen as bureaucratic – as a burden imposed by HR rather than as a spur to the business. Conducting appraisals at appropriate times is an important tool in understanding and evaluating performance and setting people onto the right path to get the best out of them. ‘Appraisal’ is not only the formal review. It has other components, such as:
- a pat on the back, for a one-off success
- the opposite of this, for a lack of success
- a performance/disciplinary process
- coaching.
It is important for management to establish the standards that are required and to be achieved in any particular role. These must be clearly communicated to the relevant employee/s.
- Develop the appropriate skills.
- Offer training, coaching, and mentoring, et cetera.
- Set targets that are SMART: specific, measurable, achievable, realistic, and time-related, and consistent with the strategy for the business.
- Measure the improvement.
If there is a continued failure to perform to the required standards, employers should be prepared to take action. This could include performance improvement plans and disciplinary action. It is important to ensure that this process does not detract from the performance of others and be prepared to remove anyone who cannot achieve the required standards.
