In a nutshell, performance management ensures people have clearly defined tasks and objectives that are aligned with the company’s overall needs and goals. In the absence of clearly defined performance criteria, people tend to gravitate to what they like doing or where their strengths lie, and this may or may not align with the larger goals of the organization.
That’s where performance management comes in as a continuous process whereby managers and employees work together to set goals, track progress and provide ongoing feedback to ensure everyone is on the same page and moving in the same direction. An effective performance-management system will also provide training and development opportunities for employees, tie compensation to performance, recognize the efforts of staff and help them advance their career goals just as their contributions help advance the goals of the company. Done right, everyone benefits.
One of the most overlooked tools of any performance-management system is the job profile. To be effective, it should be a concise summary of the key performance indicators and related duties required of each person in each position in the company. But the job profile alone is not enough. You absolutely need the accompanying measuring devices to support the effort. In many companies where I have consulted, I have often found job profiles filed away “somewhere.” When I do see them, they are usually long and rambling, or vague and general, and almost never are they accompanied by clearly defined requirements, standards, budgets – in other words, measurables. What should you measure? These include on-time deliveries, waste or spoilage, down time, overtime, complaints, how many rings before a phone is answered, the number of hours it takes to return messages, the length of time it takes to process invoices or produce reports.
Measurables are essential if the job profile is going to be a useful tool and not just another piece of paper. Once the job profile and measurables are integrated, you can start regular touchpoints, or meetings, to assess whether targets are being met. Most companies wait until the annual appraisal to give employees feedback and decide on merit increases, promotions, demotions or terminations. But if someone is not performing as well as you need them to, and not meeting individual and department goals, is this an effective way to effect change? And if someone is performing well and meeting targets, shouldn’t they receive encouragement and praise along the way and perhaps be given new and more challenging tasks?
Implementing a performance-management system is one of the most effective ways to keep your finger on your organization’s pulse at every level. In addition to concise, specific job profiles with defined goals and measurables, a performance-management system includes constant communication and goal-setting discussions, as well as regular formal meetings where you discuss performance based on objective metrics.
To be effective, the system should be easy and simple to use, but the key is to use it. The job profile defines the what, the measurables define the how and the when. Meeting on a regular basis to discuss progress is what makes the process work. If the employee is off track, get them back on by mutually defining short-term goals for the next review period. We all know it’s easier to adjust performance at a small point of deviation rather than when something major occurs. This will save you time and money and will make for an overall smoother running operation and effective utilization of your human capital.
The key to success is the manager. Establishing rapport and a climate of trust with employees is critical in creating an environment where people can honestly and openly discuss performance, agree on what’s working well and what isn’t, and fix what needs fixing. Bottom line: performance management will help you ensure everyone is working with clear objectives and toward a common goal: yours.