Unlike other business trends, which have seen new tools, measurements, policies and instruments come and go, performance management philosophies and practices have truly stood the test of time. The biggest questions leaders in the human resource space must ask are, “What is our performance management process really doing for us?” and “Is this process truly having an impact on our business?” Let’s take a look at the history of performance management and what we have discovered is necessary to create a high-performance workforce.
The roots of performance management go back only about 60 years to World War II. Performance management began as a source of income justification used to determine whether or not the salary of an individual was deserved. Organizations used performance management as a way to drive certain behaviors from workers to get specific outcomes. This practice worked well for certain individuals, but failed miserably when used on others. Organizations found that some people were driven solely by pay, whereas others were driven by the quest to learn and develop their skills further. This gap between justification of pay and career development became and still is one of the biggest problems in performance management.
Today, in organizations around the world, performance management practices and outcomes are so varied that the term “performance management” itself has taken on many different meanings. Each meaning has a much different impact on the organization and the culture in which it operates. Around the world, corporations and institutions are continually on the hunt for what works best in their existing culture. Let’s take a look at a few imperatives for preparing an organization to breed a high-performance workforce.
One of the most important factors to consider before embarking on any performance management journey is to ensure that you have executive management commitment. The leaders of the organization must understand that with a formal performance management process in place, they now have the duty to develop goals and objectives in a timely manner and ensure that these goals are truly driving the business results they are looking to achieve. As organizational changes are needed, management should be ready to adjust stated objectives quickly and decisively. Management also must commit to investing in the ongoing development of the workforce based on the outcomes from the process.
- For those building the performance management process: Ensure that you have commitment from all levels of management. Insist that this commitment be renewed on a frequent basis.
- For those sponsoring the performance management process: Be ready to walk your talk. You must be timely in the creation of your goals and objectives, clearly communicate those objectives and be ready to adjust when needed.
Marketing often drives people or companies to buy from you. Many of the companies we think of as “marketing machines” do a great job of marketing externally, but often forget about marketing internally. Internal marketing makes or breaks the success of any initiative, especially the performance management process.
As the performance management process is built and communication plans are formulated, it is equally important to begin the internal marketing plans for the initiative. This means that the development of messaging occurs parallel to the creation of the process itself. The workforce needs to understand these important questions immediately for the process to be successful:
- Who? Is this for the entire workforce or just another initiative for senior management?
- What? Is this just another rallying cry to start the year, or is it an ongoing statement of excellence with communication, clear objectives and follow-through?
- Where? Is this something that occurs at our department meetings in a PowerPoint presentation, or is this an ongoing process that I internalize everywhere I work?
- When? Is this a once-a-year meeting with my manager or an ongoing process?
- Why? Is this a way to drive additional profits for the company and executive management, to truly ensure my success within the company, or both?
- How? All of this sounds great, but what do I do now?
All great marketing efforts require a campaign. The rollout and implementation of a performance management process is no different. The internal marketing should answer all of the preceding questions in an exciting, innovative manner that captures the imagination of the workforce and helps employees see what “could be.” The campaign provides a frequent communication vehicle for the team to deliver the message and purpose of the performance management process.
- For those building the performance management process: Understand how your audience likes to receive information, and execute an internal marketing campaign designed to deliver frequent, consistent messaging.
- For those sponsoring the performance management process: The performance management process should be built into each and every interaction that you have within the workforce. All activities of the workforce are ready to be aligned to your goals and objectives—your actions and words during the rollout set the tone for the success of initiative.
The communication of goals and objectives must cascade throughout the organization. Every workforce has many different education levels, demographics, and levels of computer literacy and language diversification. Leaders of the performance management process must make sure that their message reaches the entire workforce. The best way to ensure successful communication of goals and objectives is to include them in all internal communications. The goals and objectives must be communicated in a manner that is clear, measurable and obtainable by all members of the workforce. It is very important to “know your audience.” Communication should not be limited to goals and objectives, but should cover ongoing development plans as well.
- For those building the performance management process: Understand the various methods and the preferred manner of communication with the workforce. Getting the right word to the right people at the right time clears a huge hurdle for you toward success.
- For those sponsoring the performance management process: The consistent communication of goals and objectives from you to the organization will remind the workforce of the importance of your initiatives and restate your commitment. Over-communication is nearly impossible as this process begins.
A part of every well-executed process is the adjustment and improvement of the process before, during and after the rollout. Each day you will learn the impact of the performance management process on your organization and should be ready to adjust based on adoption and acceptance as you go. There will be individuals who do not accept the process and will not fit into the organization in the future. You will receive many suggestions as to how to make the process better and should be open to feedback to help the process and culture grow together. There also will be individuals who will emerge rapidly as champions of the new process. These individuals should be encouraged to assist in the adjustment of the initiative. The most important thing to remember is that it will take months of tuning and adjustment before you feel comfortable with the process and its role in the organization. The heart of a successful process is its ability to evolve as the organization changes.
- For those building the performance management process: Remember that the process will need assessment and adjustment. You will never get it perfect the first time, and those that do succeed are able to morph over time to meet the goals of the organization.
- For those sponsoring the performance management process: Your continued support and commitment are crucial at this point. The organization will be both celebrating and fighting the new process. You must remain firm in your dedication to reaching the high-performance workforce goals and know that growing pains will occur.
The implementation and rollout of a new performance management process should benefit the entire organization. It is crucial to understand that as the new process is rolling along and creating success, individuals need to be rewarded. These rewards come in many forms, from celebration as a company for achieving a goal with a company-wide bonus, to more granular rewards based on individuals meeting specific objectives. The one thing to remember is that reward drives behavior. In the age of the “free-agent nation,” even though what we are asking people to do seems like part of their day-to-day job, all change and new behavior should be rewarded. Rewards are not always monetary. Successful organizations also have used company-paid trips, gift cards, merchandise credits and even family picnics as reward mechanisms to ensure the creation of a true performance-based culture. Another reward for the workforce is ongoing education. Employees are more likely to continue to work for a company that invests in their development.
- For those building the performance management process: It is important to build in reward milestones throughout the rollout and execution of the performance management process. These milestones will continue to provide the workforce with the incentive to take part and make the new process a success.
- For those sponsoring the performance management process: The rollout of performance management processes and the cultural change that takes place as a result always create some amount of stress. Budgeting for and using rewards as a mechanism to adapt to this change is important.
As the rollout of the performance management process continues, measurement is a key piece of the puzzle that organizations often miss. Some of the areas that do get measured are:
- Which manager has gotten all of his or her employee reviews in?
- Which employees were late to turn in their reviews?
- How many high-performers did we have?
- What percentage of individuals did not meet their objectives?
All of these are important metrics to look at as part of the process, but HR and those sponsoring the performance management process should be asking themselves, “Are these the right things to measure?” One of the areas where the performance management process continually falls short is tying the performance of the workforce directly to the performance of the business. True performance management takes place when an organization can use the process to impact business results. When HR can measure an increase in sales, a decrease in customer turnover and an increase in productivity, the performance management process can be deemed a success.
- For those building the performance management process: It is important to work with the lines of business to determine what the performance management process is designed to achieve and to ensure that metrics are used from the outset to measure these objectives. Never just measure the process—the outcomes are what matters.
- For those sponsoring the performance management process: Investing in the activities involved in a performance management process without investing in the tools to measure it is going only skin-deep. The real benefit of the performance process is when you can see the impact on true business results.
Living Performance Management
The implementation of a performance management initiative at any organization will have a drastic impact on the culture. The incentive for change is the final result achieved by the process. If the final result is on-time employee reviews, your work is just beginning. If the final result is a measurable impact on business results tied to your organizational goals and objectives and you have a workforce that is high-performing, you have made considerable progress. Congratulations, you have just tasted success and will strive for more! Performance management is an ongoing, living process that will benefit your organization forever.
Jason Averbook is chief executive officer and co-founder of Knowledge Infusion. Jason has more than 15 years of experience in the human resource and technology industry. Prior to founding Knowledge Infusion, he was senior director of global product marketing for PeopleSoft Human Capital Management. He can be reached at email@example.com.