Tree fern growingManaging the performance of your business unit, regardless of its size, is the most important contribution you can make to the ongoing success of the business as a whole. It is when managers avoid or abrogate this responsibility that serious problems begin to take root and grow. Poor performance is tolerated and the signal to good performers is that their efforts don’t count for much.

Why manage performance?

Why would you bother managing unit performance? There are a lot of good reasons for doing performance management well and these are a few of the most important:

  • It makes positive contributions to every aspect of your business operation regardless of the sector in which you operate.
  • It aligns effort with strategy and meaningful results.
  • It feeds into motivation which was the subject of the previous two posts.
  • It develops people who then make valuable contributions.
  • You retain these contributors for longer and they continue to build a successful organisation. • It is ultimately the legacy of your professionalism and management practice.
  • It helps identify and deal with issues in a timely manner.

What business issue are we solving:

You know that performance management is intended to improve performance, however, it is reasonable to say that it requires effort and thought on the part of the manager to make it both useful for the staff member and effective for the organisation. Herman Aguinis defines performance management as:

…an ongoing process in which individual and team performance is identified, measured and developed, and aligned with the organisation’s strategic goals.

The problem to be solved is how to achieve the outcome of improved performance and gain those performance benefits. To this end, the manager has the opportunity to make it whatever it needs to be, within reasonable bounds. This can reasonably involve activities that include improved job design, professional development plans, goal-setting and feedback based on agreements made in advance and measured accordingly.

It fails when performance management becomes a management technique or an HR process for compliance. Likewise it isn’t an annual event but an ongoing management discipline and practice that enables and builds peoples’ capabilities. Performance management is not the same as performance appraisal, nor is it primarily concerned with discipline, correction, punishment or control.

Good performance management is based on trust, consistency and objectivity, and it is a two-way street between manager and staff member.

What does good performance management involve:

A sign of a healthy organisation

If performance management is done well, there are policies and processes in place to support practices. This is more than lip service and ranking, it is characterised by behaviours where the performance of individuals is assessed in a coherent, fair and consistent way.

Five Elements for effective performance management

There are 5 elements to effective performance management and your mission as a manager is to do them well:

  • Know the individual – do they have the necessary skills, capacity, knowledge and motivation to do the job they are employed to do?
  • Be clear about expectations – are there adequate and appropriate standards against which to set these expectations?
  • Be consistent with consequences – tolerating poor performance in one part of the unit simply signals that the diligence of others goes unrecognised.
  • Provide ongoing regular feedback – there is no acceptable reason why an annual performance review should hold any surprises for anyone.
  • Create the environment in which everyone can perform – as the manager you hold a great deal of influence over the working environment of your unit.

Success comes with effective performance management:

An organisation will not be successful over the medium term without managing performance at the individual, unit, divisional and organisational levels. Then there is the question of how you manage performance and build capability. That is related to whether you delegate, coach or guide your unit members:

  • Allocate formal time, at least each month for every unit member and ensure you have regular updates happening as well;
  • Personalise that time and communicate clearly about past performance, developments and improvement opportunities, expectations and objectives for the future;
  • Understand the feedback from the staff member to ensure they are able to express their view and plans for the future as well as their past performance;
  • Agree in advance on objectives, measures and targets. Delegation and autonomy will depend on maturity;
  • Ensure that your expectations for communication and update frequency are clear as are the expectations for behaviour and attitude.

Don’t run away from performance management

If you do have a performance management problem don’t ignore it, sweep it under the carpet or move it to another unit. In the end the organisation suffers wherever the performance problem goes and a manager has a professional obligation to the organisation to deal with the issues as they arise. If it has extended to a formal performance improvement process, it is important to give yourself the best chance of a positive outcome if you begin to understand the motivation and emotional intelligence profile of the other person. If the agenda is simply to fire a person then there should be solid grounds for taking that action sooner rather than later. If the agenda is truly to address performance improvement then understanding the performance characteristics of the other person is an essential means by which to clarify the behaviours that are at issue as well as the drivers behind them to provide some insight into what needs to be improved.