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18-06-2015 by 
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Many global organisations have a very robust and well thought out performance management system.  Typically it will include technical competencies, behavioural competencies, have a rating scale and be linked to an end-year calibration process.  And yet many of these same organisations find that the results seem to add up to less than the sum of the parts. 

But surely I hear you ask, if they follow the process and set the goals, the results will follow?  But somehow the goals get watered down or become detached from the strategic intent as they trickle down through the layers of management from the CEO to the grassroots worker.   The overarching strategic goals are somehow lost in the cascade process and the year-end results fail to hit their target. 

For performance management to underpin and achieve strategic goals a more holistic approach needs to be taken, one that rewards the greater efforts of the whole and not just the a few outstanding individuals.  For example:

  • To rate or not to rate – that is the (frequently asked) question.  The answer depends on your organisation and culture.  Ratings are good and do give an easy way to compare across teams and occupational groups.  But other levers could be equally useful, such as performance of profit centres, talent management processes and 360 degree appraisals. Rather than get bogged-down in the debate about whether they are needed or not, think about what data will help you to make effective decisions and reward high performers.
  • Data-driven decisions – Executives cannot hope to make informed decisions about performance, reward and succession unless they have good data to support them.  Investing in a good performance management system – some of which are quite affordable with the new SaaS (Software as a Service) model, can ensure that performance is taken in the round, against variables across the organisation and linked to overall achievement of strategic goals.
  • Transparency motivates performance – Some of the reasons that performance management systems fail comes down to a lack of consistent reinforcers.  If employees cannot see a clear link between performance and success and its converse – poor performance and failure, then they are less likely to go the extra mile to achieve something extraordinary.  Why should they if no one notices?  So ask yourself if the relationship between effort and reward is clear in your organisation.  If you find yourself scratching your head for the answer then it’s time to rethink your succession and promotion processes.

Performance management at its best is hard-wired into the way things are done within an organisation.  Feedback about performance is not left until the review meeting but becomes part of the natural ebb and flow of conversations.  Goals are not poorly thought out tasks to get the dreaded yearly goal setting form out of the way, but are clearly linked to what the organisation has set out to achieve.  The best performance management systems give employees a sense of purpose and room to grow and develop in their current role, whilst having their sights firmly set on their next role.  If you can say that these qualities are evident in your organisation, then it sounds like you have a performance management system that lives and breathes the values of your organisation, rather than something that is done to you. 

Agents2Change is a specialist implementation consultancy that has been improving the performance of global organisations since 2006.  For more information visit www.agents2change.com.