How to manage performance

The purpose of performance management is to make people, teams, departments and, therefore, the organization itself more effective. It involves making sure individuals have the skills and tools to perform to their best ability and achieve their objectives to help deliver organizational success.

In some cases, a short training program may be enough to remedy a skills gap or performance drift but in other instances it could mean a major re-focus of a person or team’s activities to get them on track. Whatever the scale of the adjustment required, managers must put in place a structured performance management system. Sadly, this often falls short because of poor practices such as not defining goals properly, unwillingness to confront poor performance or improperly executed appraisals. Successful managers take a meticulous approach, paying proper and careful attention to each component part and being clear in their communication to individuals.

By mastering the art of performance management, you’ll not only improve the performance of your team and the organization as a whole but will also enhance your reputation as an effective manager.

Agree performance targets

Performance management is often included in annual appraisals or quarterly reviews, but it’s far more important than this and should be viewed as an ongoing process.

The starting point and central strand of the performance management process is a set of clearly defined goals linked to both a person’s role and the needs of the business. Ensure they are SMART (specific, measurable, achievable, realistic and time-based). Other elements that must be included are accurate job descriptions, competencies and skill sets.

Jon Ingham, executive consultant at Strategic Dynamic Consultancy Services, says ‘half a dozen’ objectives are ideal. “This supports the psychological priming effect, in which the individual’s objectives become internalised, and without any further action, are more likely to be reached,” he explains. “These objectives then provide the basis for monitoring, assessment and improvement.” It is also advisable to draw up a policy on performance management so that individuals understand the implication of not making the grade.

Establish the motivational factors

Motivating employees to ramp up their contribution and meet their objectives means they have to understand what they do and how they do it, and how that fits with the overall strategy of the organisation. As their manager, you also need to have a solid appreciation of what drives them as individuals and the most straightforward way to do this is to ask them directly about their priorities and values.

Another key requirement is to create the correct environment for the person to feel motivated. Ingham says this means removing any “organisational barriers” that will stop the employee from performing, such as policies, politics or lack of resource. While employees won’t necessarily be motivated solely by increased reward, they certainly will be demotivated if they feel they’re not being paid appropriately for their efforts and achievement.

A key requirement for successful performance management is to ensure you are working closely enough with each employee to know what they are doing, and how well they are doing it. Ongoing observation and involvement are vital as is giving them feedback and coaching at the point of performance.Jon Ingham, executive consultant, Strategic Dynamic Consultancy Services

While a group of enthusiastic and motivated individuals should make for a highly motivated team, managers still need to concentrate on engendering team spirit, and ensure members understand their roles within the team and the wider team objectives. “Ideally, the team should talk together about their overall performance, and how each team member is contributing to this.”

Use benchmarking as an indicator

Benchmarking is used typically by companies to flag areas which need improvement by comparing themselves to major competitors or to industry standards. When used in the context of skills levels it will help differentiate employee performance and “ensure that performance judged as good really deserves that assessment,” says Ingham.

It can also pinpoint the necessary skills’ levels for employees so they can meet future business needs as well as provide a starting point for qualifications. But managers must be certain of the benchmark skills and competencies employees should possess before investing in any training programmes or additional people development initiatives.

The objectives should also be benchmarked internally. Managers should share draft objectives at the start of the performance year to ensure that employees at the same level have been set objectives which are similarly challenging.

Give constant feedback

Constant evaluation and routinely providing employees with feedback is essential to reinforce goals and to help them revise and adjust their personal performance.

“A key requirement for successful performance management is to ensure you are working closely enough with each employee to know what they are doing, and how well they are doing it,” says Ingham. “Ongoing observation and involvement are vital as is giving them feedback and coaching at the point of performance.”

To be effective, feedback also has to be honest and it is these ‘difficult’ conversations that managers can find daunting and shy away from. But without them employees will never know if they are performing below expectations. You also need to be mindful that some employees won’t be entirely comfortable receiving feedback so a combination of sensitivity and steady progress will be required to build trust.

Track performance against set goals

Demonstrating a clear link between the vision and strategy of the organisation, and the objectives which are set for each employee in performance management, is crucial. An increasingly high proportion of companies are using balanced scorecards to measure performance.

A balanced business scorecard is developed for the business as a whole, and it can then be used to drill down through departments and teams, and ultimately to individual employees, auditing the effectiveness of each person.

Ingham adds that most employees will benefit from having scorecard objectives that cover the four perspectives of the business scorecard – learning, internal processes, customer satisfaction and financial performance.