Effective leaders know that when it comes to ramping up the performance of their organizations, high market performance does not depend on one ingredient or practice; it results from many practices employed together. High performance is the outcome of a clear vision, aligned objectives, and focused, sustained efforts. A performance management process should tie together and reinforce these elements.
Following are 10 vital steps—gleaned from high-performance organizations (HPOs) and highlighted in i4cp's new report Purpose-Driven Performance Management in High-Performance Organizations (available to members only)—that can help improve performance management effectiveness:
1. Update and simplify your organization's competency models.
Many organizations have competency models, but few use them effectively. To get the most benefit, make sure you identify the roles critical to your organization's future success and define the competencies required to do them well. This will ensure alignment between the skills/attributes that are built or acquired with the roles essential to your business' success now and in the future.
Steering committees of business unit leaders are an effective way to capture and communicate the skills and attributes most strongly associated with high performance and align with your organization's core values.
2. Create an environment in which regular, ongoing performance management discussions are the norm.
A common pitfall of performance management is that it is often episodic rather than ongoing. HPOs replace annual or semiannual formal performance reviews with regular (monthly or quarterly) informal discussions between frontline managers and their direct reports. This establishes better communication and helps to both maintain consistent focus on what needs to be done and gauge progress.
3. Focus development and goals on shorter-term intervals.
Most everyone establishes annual targets, but HPOs break them into shorter-term objectives for more accurate tracking against progress. The aforementioned frequent informal discussions are then used to measure progress and reinforce focus on top priorities in order to increase the likelihood of employees achieving their goals.
4. Train (and retrain) front-line leaders on effective performance management practices.
Many managers lack formal training in managing individual performance. HPOs are more apt to train supervisors on the following: giving and receiving feedback, conducting performance appraisal meetings, addressing employee performance issues, and setting the goals the employees will be measured against. This not only creates commitment to high-performance in managers but creates engagement and promotes motivation in employees via more effective managers.
5. Hold front-line leaders accountable for the development of their people.
As referenced in i4cp's Talent Management in the Trenches report, HPOs are much more focused on enabling frontline leaders to be more effective managers of talent. In order to hold managers accountable, HPOs measure the quality of performance reviews to ensure that they are conducted properly and generate the desired outcomes in employees. This, coupled with providing formal training to frontline managers on conducting effective performance reviews, will help ensure that managers are effective in helping their team members become more productive and more accomplished.
6. Provide a consistent performance management process across the enterprise.
Nothing undermines the effectiveness of performance management like subjective or inconsistent appraisal criteria. HPOs encourage consistency and buy-in of PM processes across borders and talent pools by inviting local involvement in the design of global programs.
A consistent performance culture makes cross-border and cross-functional moves smoother. It increases the ability of local trainers to conduct supervisory training with the same rigor that headquarter employees receive and ensures consistency of training across borders.
7. Apply performance management enterprise-wide.
Leaders of HPOs believe that performance management principles and processes should apply to every level of the organization from the board down. To promote transparency, trust, and accountability organization-wide, they apply PM practices across every layer of the enterprise. This instills a performance mindset among all workers that will remain with them as they ascend in the business. It also encourages collaboration and sharing of innovative ideas and solutions.
8. Broaden the sources of feedback to enrich the performance management process.
Another way to ensure that PM processes are accurate and objective is to gather a wide array of perspectives on an individual's performance. HPOs utilize 360-degree feedback methods to collect specific feedback from peers, subordinates and even customers. This not only makes appraisals better, but enriches the data available to drive staffing and development decisions. New technology and applications make the task of gathering and comparing performance data easier than ever.
9. Establish a system to address and resolve poor performance.
It's not enough to identify poor performers—the ultimate goal is to help them to improve. This requires establishing development plans for poor performers that include specific targets and timelines. This provides transparency to lower-performers of where they stand, what is expected of them and when, and how the company is supporting them in the effort to turn things around.
Managers should be prompted to meet frequently (weekly or monthly) with low-performers to track and aid in progress against development goals. This will help poor performers to improve or move on (out of the organization). It will also prevent turnover among high-performing employees who might otherwise be frustrated by low-performing co-workers.
10. Integrate performance data into all components of talent management, including workforce planning.
Talent management processes work best when they are integrated. Critical performance management data should be accessible and shared by other talent applications. In workforce planning, it can be used to create and implement development plans and career paths that align an employee's current skills with the competencies required for critical job roles in the future. Also, integrating data from applicant tracking systems with first year (or project) performance data can identify the source of your best hires.
For more information about i4cp research, visit www.i4cp.com
Learn more about performance management in AMA’s seminar Fundamentals of Human Resources Management.