Join Wayne Cascio for an in-depth discussion in this video Performance management, part of Human Resources Foundations.
- Consider the following situations. The athlete searching for a coach who really understands her, the student scheduled to see his guidance counselor at school, the worker who has just begun reporting to you his new boss, what do these situations all have in common, the need to manage performance effectively. Think of performance management as a kind of compass, one that indicates a person's actual direction, as well as his or her desired direction.
Like a compass, your job as a manager is to indicate where that person is now, and to help focus attention on where he or she should be heading. There are solid payoffs for doing performance management well. If you work for an organization with a great performance management system you will have a clear line of sight that links your work to the success of your organization. You'll perform better in your work, and you'll probably be amply rewarded for your excellent performance.
Organizations with such systems are 51 percent more likely to outperform their competitors on financial measures, and 41 percent more likely to outperform their competitors on nonfinancial measures such as customer satisfaction, employee retention, and quality of products or services. Obviously if performance management were easy to do, more firms would do it. One of the reasons it's difficult to execute well throughout an entire organization is that performance management demands daily not annual attention from every manager.
It's part of a continuous process of improvement over time. Let's say you're a manager with four direct reports, to manage their performance effectively you need to do three things well. The first is, define performance. If you're crystal clear about your expectations with each of your direct reports they'll know what's expected of them, and they'll stay focused on meeting your expectations. How do you do this? By paying careful attention to three key elements, goals, measures and assessment.
Set specific challenging goals for each of your people, for this clarifies precisely what you expect, and it leads to high levels of performance. Merely setting goals is not sufficient though, you also must be able to measure progress towards each goal. A goal such as make the company successful is too vague to be useful, but measures such as the number of defective parts produced per million, or the average time to respond to a customer's inquiry are much more tangible.
Once you've set challenging goals and tangible measures your next task is to assess progress towards those goals. When you do that you offer each of your direct reports a score card that will get their attention. To define performance properly, therefore, you must do three things well, set goals, decide how to measure progress, and provide regular assessments of achievement. The next step is to facilitate performance.
To do this well, recognize that one of your major responsibilities as a manager is to eliminate roadblocks that get in the way of successful performance. Here are just a few examples of obstacles that can inhibit maximum performance, outdated or poorly maintained equipment, delays in receiving supplies, and inefficient work methods. Employees are well aware of these, and they're only too willing to identify them, if you just ask for their input.
Then it's your job to eliminate these obstacles. Once you do this the next step is provide adequate resources, more money, better equipment, or more staff, after all if employees lack the tools to reach the challenging goals they've set they'll become frustrated and disenchanted. Conversely, employees really appreciate it if you provide everything they need to perform well, and they will respond in kind. A final aspect of performance facilitation is the careful selection of employees, after all the last thing you need as a manager is to have people who just don't have the skills or the temperament to do their jobs well, for example, a customer service agent with a toxic personality.
That's why leading companies like Apple, Google, and Disney expect even top managers to get actively involved in selecting new employees. Encourage performance, all of this leads to the final element of a solid performance management system, namely encourage performance. To do that well you have to do three more things, provide rewards in a timely fashion soon after your people achieve their goals, and distribute rewards fairly explaining clearly why and how you rewarded your people.
In summary, managing for maximum performance requires that you do three things well, define performance, facilitate performance, and encourage performance. Remember, like a compass your role as a manager is to provide orientation, direction and feedback. Do those things well, and you too will be richly rewarded.
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- Managing talent
- Developing employees through training and career development
- Managing performance
- Managing international employees