Performance Management - It is What You Make of it!

A subject that often comes up in my work, often around this time of the year, are issues of compensation.  In fact, in the past year and a bit I 've been working with a large public sector employer as they looked to reconfigure their performance evaluation/development process and divorce such from changes in compensation - either cost-of-living or merit.   In reality, for non-unionized staff/leaders, increases of any sort have long been left in the dustbin of Alberta's economy and fiscal constraint.

Historically, there have been more than a few approaches to performance compensation frameworks running the gamut from team-based models to strong focus on individual goal attainment.   Themes that often come up as it relates to team-based compensation schemes include:

• Are we willing to remove the people or teams that hold everyone else back?
• How do you get everyone engaged and moving in the same direction?
• If I'm a high achiever/performer why would I want to carry the weight of those that don't perform?
• What if the goals and objectives set for me are not achievable or simply don't make sense?  I'm set up to fail from the beginning!

I believe that one of the most - if not THE most - important mechanisms to address these questions and concerns is a well developed and managed performance management system.  There are so many aspects to what I believe constitutes a good performance management system that I'm going to tackle the subject in more than one blog entry.  I'm going to approach the issue from the basis of what I've seen be successful from my personal experience and learning over the past 30 plus years of leadership, coaching and consulting experience.

Unfortunately, too many of us - leaders and followers alike - approach the performance management exercise with anxiety and dread.  Historically, the process seems to have been defined by its potential for conflict and disappointment - and tremendous relief when it's over.  However, I'm going to suggest that performance management, if well done, can create the exact opposite feelings in most cases.

Most leaders recognize that effective performance management is one essential key to maintaining and increasing employee commitment and productivity.  In contrast, a poorly constructed or implemented performance management system is a harbinger of a strongly disengaged workforce.  Even in the current economic environment in Alberta we are still, in the long-term, facing shortages of qualified labour AND of committed and motivated personnel.  No organization can afford to lose current staff - or their best staff - through poor, or non-existent, performance management practices.  Yet we seem to miss a golden opportunity to retain staff - and develop them - through an effectively structured and supported performance management process.

So what do I see as being an effective performance management process?  First of all, there must be some fundamental building blocks in place to set the stage for the process.  At the outset, the organization itself must have clearly established strategic directions to which it is expecting to align all individual goals and performance expectations.  It's more than a tad difficult and frustrating for an employee to be told they are not making the grade if the organization itself has not been clear about what success looks like.  Just as importantly, the organization should take time to clearly articulate its vision, values, and expected behaviours - basically be clear about the culture that defines the organization.  An organization might be very clear about its objectives (e.g., revenue generation) but not at all pleased with how those goals were achieved (e.g., illegal activity).  Both the goals and the cultural expectations should be well articulated to set the stage for performance management.

This is just the start, however, of the goal setting process.  Large strategic goals need to be translated down to goals for individual business units of the organization and then down through to the individual.  A large strategic direction like revenue generation will have very different application and meaning for Finance versus Human Resources versus an operational division or program.  Time must be taken to make the large strategic goals relevant to the individual in their day-to-day performance and as part of the formal performance management process.

In addition to the establishment of the hard metrics around organizational/sub-unit performance, goals should be clear as it relates to the performance behaviours.  Just as with the work required to explicitly describe what realization of strategic goals looks like, similar work must be undertaken to describe in factual terms what it means to be a good performer/leader within the organization.  Each organization will have distinct features and performance expectations of its staff.  This is not just a cut-and-paste effort achieved from looking at what has worked for others.

Finally, there must be meaningful discussion between a leader and the person who reports to them on the goals, objectives and behaviors.  This is critical in not only establishing the performance parameters but also in ensuring that there is understanding and buy-in to the objectives.  This conversation goes a long way to ensuring that both the leader and the direct report agree that the performance objectives are in fact achievable or even relate to the job to be done.  There may even be opportunity to understand or appreciate under what circumstances the desired performance might not be achievable - e.g., key environmental variables change.  This is also a point at which other non-strategic objectives and goals can be discussed.  There is much in the day-to-day role of any employee or manager that is not strategic in nature but is critically important to maintaining and advancing operational effectiveness of a business unit - good fiscal oversight, resolution of operational problems, hiring of staff, etc.  These basic functions require attention and consideration in setting performance management objectives. 

At this point I have only discussed what is required as the base foundation for effective and meaningful performance management.  In subsequent entries I will focus on processes of continuous feedback, 360 degree performance reviews, and connection to reward and recognition systems.

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Greg Hadubiak, MHSA, FACHE, CEC, PCC

President & Founder - BreakPoint Solutions

gregh@breakpoint.solutions 

www.breakpoint.solutions 

780-250-2543

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.