WILL THE TRUE PERFORMANCE MANAGEMENT STAND UP

Posted on September 03, 2024 by Barbara Valentine, One of Thousands of Executive Coaches on Noomii.

What has happened to Performance Management….where has it gone?

The term Performance Management first surfaced about five decades ago and through the years has been abused and overused until it has become tired and basically abandoned as a viable process to bring about improvements. It has become the victim of the latest flavor-of-the-month, as well as transformed by those seeking recognition for a new idea. The name has been recycled into meanings far different than originally intended, ranging from software systems to record and store performance data to employee appraisal systems.

The birth of performance management may be attributed to the ongoing quest of organizations to improve bottom-line results. It was an easy connection to recognize that a major contribution to results was how well people did their jobs. So, why not try to improve the performance of the human resources in the organization? The end product was the management of performance formalized into a system – a Performance Management System (PMS).

So, what is needed for a Performance Management System? Presented for consideration are the critical components that will contribute to lasting and ongoing improvements that are measurable; have the capacity to be updated as needed; bypass trendy, flavor-of-the-month approaches while including those that effectively contribute to the system; and eliminate reliance on any one person or group who have the potential to undermine the system. Each component is worthy of a much more detailed explanation than is included within this article.

1. Owner

As a very unique role, this person has responsibility for overseeing the entire PMS and is in a senior position and so is capable of getting things done. Goals and responsibilities for the owner are clearly written, including authority levels, reporting relationship, and boundaries; in fact, these are so thorough that a change of owners can be made seamlessly and with no interruption.

2. Definitions and Responsibilities

Success is dependent upon everyone being “on the same page” and this means agreement to essential definitions and responsibilities. This starts at the top with the organizational goals and strategies. Senior management must be in total agreement as to what these are and they must be written so they are easy-to-understand and can be measured.

Each department or functional area develops their unique goals that support the organizational goals. The sum of all functional goals must result in all the activities required to achieve the organizational goals. This is an extremely critical but difficult activity since accomplishing this also results in each functional area identifying how they are interrelated with each other – what they depend on from others and what others require from them.

With agreed-upon functional goals, the job positions within each functional area must be clearly defined to show expected deliverables or outcomes and how each will be measured. These are much more than job descriptions. The sum of all job position deliverables must result in all the activities required to achieve the goals of the functional area.

With this amount of detail, it is possible to determine the level of performance required to reach the goals of each functional unit and the organization as a whole. Additionally, it is feasible to quickly identify discrepancies in performance requirements so adjustments can be made to stay on track.

3. Monitoring

Once organizational, functional unit, and job function goals and deliverables are clearly and completely outlined, metrics must be assigned. It’s often been said that you can’t manage what you can’t measure because you don’t have sufficient information to make decisions. Measurement is a whole other topic particularly since it is often misunderstood and misused. Suffice it to say that, to be effective, a measure must be observable, completed within a defined timeframe and include specific evidence that the action or activity has been accomplished.

A metric is assigned to every goal and deliverable and is the Desired Performance Measure; that is, it is the measure that identifies the performance that is required or needed to satisfactorily complete the action.

One of the goals of a PMS is to capture the actual performance and compare it to the desired performance. A performance problem is identified when there is a gap between the actual and desired measure. This triggers a red flag indicating that corrective action is required. It also ensures a timely response to a potential problem so continued high performance is maintained.

The type of system used to monitor and track performance can be sophisticated and computer-based but can be accomplished in many other ways depending on the organization and the systems and programs they have available.

4. Corrective Action

Each performance gap must be analyzed using a root/cause approach. Employing the wrong solution can be both time and dollar costly. A solution can be as simple as remedying a misunderstanding or providing missing tools or supports OR more complicated involving a negative attitude, as well as lack of competencies to complete tasks.

Possibly, a good analogy is to compare an organization to the human body. The body, like an organization, consists of many complex, interrelated parts. Each has specific responsibilities but relies on both providing and receiving from other parts. Together the parts make up the whole and, when all parts are operating at maximum performance, the results or outcome are the highest possible. Like the doctors who are responsible for keeping the body performing, a PMS will oversee organizational activities to ensure goals are met and exceeded within a continuous improvement environment.

So, why would an organization consider a PMS? The benefits of a functional PMS are endless – a few critical that come to mind:

*Provides the tools to control organizational outcomes.
*Aligns the organization from senior management through every functional area and staff member
toward the same goals.
*Results in financial gains through increased sales, production, and reduction of costs.
*Creates an organization that can quickly identify and respond to potential problems and make
necessary strategic or operational adjustments to stay on course.
*Enables the organization to function in a continuous improvement mode particularly if attention is
given to tracking and analyzing “lessons learned”.
*Develops a workforce that is motivated, engaged, committed, and high performing.
*Encourages a communication system that is open, flexible, and responsive to the needs of all
employees.

The list could certainly be more extensive and detailed but, even with those benefits listed, it appears to be a “no brainer” why every organization wouldn’t want to implement a PMS. So, what’s stopping the stampede to start moving? Some thoughts:

+Decision makers view the opportunity as too good to be true and just don’t believe it can be done.
+It’s easier to maintain the status quo and accept incremental improvements rather than make the
effort to strive toward massive gains.
+Any kind of change is difficult for many people – from the top down – to accept.
+An effort of this magnitude requires commitment, patience, and hard work.
+There is the need for instant gratification – quick results – which current fads can generally
deliver (although they are often lost as fast as they are gained).
+Decision makers appear blind to the fact that significant gains are possible throughout all facets
of installing a PMS – and, these gains can pay for the next phase of installation creating a self-
supporting initiative.
+People are afraid to fail and this fear paralyzes them from taking advantage of opportunities no
matter how appealing the resulting outcomes may be.
+If senior management has invested in an idea or process, whether it is producing results or not,
they may be reluctant to give it up in favor of something else for fear they will be viewed as
having made the wrong decision initially; in essence, they are being held hostage.

There can’t be a better close to this article than to challenge readers to take some proactive action….learn more, open a discussion with associates, contact experts to see what might be done in your organization…or, if you decide to file the article in the round file and return to business as usual, you will miss the opportunity of a lifetime.

This article is the sole property of Barbara Valentine and Performance + Coaching and may not be copied, in whole or part, or used in any way without the written consent of Barbara Valentine