The principles of performance management (PM) are simple. Make sure that the people in your organisation know what they need to do and why they need to do it; make sure they get the right support, monitoring and guidance while they work; make sure that their work is evaluated and recognised; make sure all this is built into wider more strategic activities like long-term planning. PM is no different to good management.
But the practice of PM is hard. Think about a typical manager with, say, five direct reports who works in an organisation with a conventional, old-fashioned hierarchical management structure. If that manager follows CIPD best practice and runs quarterly PM review meetings, allowing two hours for each meeting, that’s 20 meetings or 40 hours work. Once you add in time for collecting and collating evidence, preparation, writing up notes and consequential follow-up, that manager can be spending more than 100 hours per year on PM.
Of course, nowadays fewer and fewer organisations have conventional, old-fashioned hierarchical management structures. In matrix organisations, employees work on projects run by people other than their line managers. Indeed, such employees may hardly ever see their managers, spending all their working time with their project managers and co-workers.
In the matrix environment, the need for good PM is more important than in conventionally structured organisations. Employees need SMART personal objectives, to keep themselves focussed on priorities as they move from project to project. Line managers need reliable communication paths to project managers, so that they can create and maintain SMART objectives and collect evidence of performance. Employees and line managers need to meet and talk regularly to evaluate the objectives, the evidence and the structures within which the work is done.
Other common working practices put additional pressure on PM. Employees and line managers may work different shifts, or flexitime periods, or be located far apart – even in different time zones. Home-based working, teleworking, hot desking, part-time working, job-sharing and other flexible working patterns can all make it harder and more time-consuming for employees and line managers to get together for their PM meetings.
But as PM gets tough, the HR team must get to work. It’s not enough for us just to ensure that our organisation’s PM paperwork or online system is kept up to date. We must help and support line managers and employees to use and get real benefit from PM: training and policing the creation of SMART objectives, creating and maintaining the communication links between line managers and project managers, ensuring that line managers and employees have the time and resources to meet and discuss, and then using all the information collected in PM to make better HR plans which deliver on business-critical objectives.
Sunday, 27 February 2011
Tuesday, 22 February 2011
Can you reward people who do not reach all their annual objectives?
A quick thought. In our everyday lives, most of us like to think that the good things we do balance out the less good things. For example, if we regularly make gifts to charity or treat strangers with respect then we may let ourselves ‘off the hook’ for occasionally buying ourselves an unnecessary present, or being impolite to staff in shops or restaurants.
But is this idea of balance acceptable at work? In other words, does meeting or exceeding some of our objectives, goals or targets make up for failing to meet others? And in particular, should an organisation reward an employee for over-performance on some objectives when they have underperformed on others?
Does this mean that all objectives need to be prioritised, and that people can afford to skip or ignore the lower priority objectives? And what if they skip the high priority objectives?
The thing is that best practice guidelines often say that people should have about four to eight objectives, which in no way covers all the responsibilities and tasks that are described in their job descriptions or role profiles. So objectives are ALL pretty high priority to start with, and how can the organisation afford for some of them to be ignored?
What happens in your organisation? Do people get rewarded even when they miss some objectives? Are some objectives simply more important than others? Does over-delivery in some areas balance under-delivery in others? Are rewards at the discretion of line managers or the Senior Management Team? OR does your organisation only start rewarding staff when they at least meet ALL of their objectives?
But is this idea of balance acceptable at work? In other words, does meeting or exceeding some of our objectives, goals or targets make up for failing to meet others? And in particular, should an organisation reward an employee for over-performance on some objectives when they have underperformed on others?
Does this mean that all objectives need to be prioritised, and that people can afford to skip or ignore the lower priority objectives? And what if they skip the high priority objectives?
The thing is that best practice guidelines often say that people should have about four to eight objectives, which in no way covers all the responsibilities and tasks that are described in their job descriptions or role profiles. So objectives are ALL pretty high priority to start with, and how can the organisation afford for some of them to be ignored?
What happens in your organisation? Do people get rewarded even when they miss some objectives? Are some objectives simply more important than others? Does over-delivery in some areas balance under-delivery in others? Are rewards at the discretion of line managers or the Senior Management Team? OR does your organisation only start rewarding staff when they at least meet ALL of their objectives?
Monday, 14 February 2011
Objectives, results, rewards and discipline
Organisations vary in how much they link individual performance management results, rewards (salary increases, bonuses and incentives) and formal discipline systems. It’s often said as a matter of policy that ‘information collected as part of the performance management process may be used in the allocation of reward or in the application of formal disciplinary or capability actions’ but organisations seldom make clear precisely how it is used.
In our work as business partners, change agents and commitment builders it is worthwhile trying to explore and explain how our organisations use performance management information. At one extreme, line managers can be left pretty much alone to: create whatever performance objectives they want for their staff; collect what evidence of performance against objectives they think fit; make recommendations for reward based on their own criteria etc. In this setting you sometimes hear line managers say things like:
’You’ve exceeded all your objectives but I now realise that they were all set far too easy. As a result I’ve decided to give you a lower than average increase next year. We’ll set more challenging objectives in the future.’
Or:
’You’ve worked really hard and well but failed to meet your objectives and I now realise that they were all set far too hard. As a result I’ve decided to give you the maximum allowable increase next year. We’ll set more realistic objectives in the future.’
Working like this is not labour-intensive – line managers do as much or as little as they feel they can – but it can still cause trouble. Everything – the objectives, the evaluations, the scale of rewards – becomes subjective, nothing is coordinated and other strategic systems that should draw on performance management information, such as the succession plan or the organisational learning need analysis, don’t get what they need. It can be very demoralising working in such a situation.
At the other extreme are organisations that explicitly reward overperformance against objectives while also initiating formal discipline or capability actions against staff that underperform. But such an approach is labour intensive: it requires all stages of the performance management process to run like clockwork, with all line managers setting equally SMART objectives by the same deadlines and all monitoring and evaluating evidence of performance. On the face of it it’s a good idea but it can seem relentlessly inhuman or machine-like in its efficiency. As a result, this approach seems to be abandoned as ‘too much work’ almost as often as it’s trialled.
Neither of these extremes is a workable version of best HRM practice and your organisation probably has a compromise system somewhere in the middle. But it is worth trying to discuss and agree the assumptions your Senior Management Team, your managers, staff and you are making about the links between individual objectives, results, rewards and formal disciplinary systems. Making such complex and ambiguous ideas clear is a challenge and a reward in itself, and doing so should enable your organisation to function in a more effective manner.
In our work as business partners, change agents and commitment builders it is worthwhile trying to explore and explain how our organisations use performance management information. At one extreme, line managers can be left pretty much alone to: create whatever performance objectives they want for their staff; collect what evidence of performance against objectives they think fit; make recommendations for reward based on their own criteria etc. In this setting you sometimes hear line managers say things like:
’You’ve exceeded all your objectives but I now realise that they were all set far too easy. As a result I’ve decided to give you a lower than average increase next year. We’ll set more challenging objectives in the future.’
Or:
’You’ve worked really hard and well but failed to meet your objectives and I now realise that they were all set far too hard. As a result I’ve decided to give you the maximum allowable increase next year. We’ll set more realistic objectives in the future.’
Working like this is not labour-intensive – line managers do as much or as little as they feel they can – but it can still cause trouble. Everything – the objectives, the evaluations, the scale of rewards – becomes subjective, nothing is coordinated and other strategic systems that should draw on performance management information, such as the succession plan or the organisational learning need analysis, don’t get what they need. It can be very demoralising working in such a situation.
At the other extreme are organisations that explicitly reward overperformance against objectives while also initiating formal discipline or capability actions against staff that underperform. But such an approach is labour intensive: it requires all stages of the performance management process to run like clockwork, with all line managers setting equally SMART objectives by the same deadlines and all monitoring and evaluating evidence of performance. On the face of it it’s a good idea but it can seem relentlessly inhuman or machine-like in its efficiency. As a result, this approach seems to be abandoned as ‘too much work’ almost as often as it’s trialled.
Neither of these extremes is a workable version of best HRM practice and your organisation probably has a compromise system somewhere in the middle. But it is worth trying to discuss and agree the assumptions your Senior Management Team, your managers, staff and you are making about the links between individual objectives, results, rewards and formal disciplinary systems. Making such complex and ambiguous ideas clear is a challenge and a reward in itself, and doing so should enable your organisation to function in a more effective manner.
Monday, 7 February 2011
The focus of performance management review meetings
Line managers sometimes seem a bit lost about what to talk about in performance management review meetings. Here are some ideas that should give line managers some areas to focus on.
• Evidence. Reviewing a person’s performance is an activity that needs to be based on hard evidence. Both the line manager and their staff member need to get into the habit of keeping records and evidence of what they do. As a rule of thumb there should be at least one document per month describing or demonstrating what the staff member has achieved. Basing review meetings on evidence rather than people’s often faulty memories means that they will focus on what actually happened rather than on people’s differing interpretations of events.
• Objectives. The most important comparison is between the staff member’s objectives (goals, targets) for the period and their actual results (key performance indicators or KPIs). Objectives created using the SMART approach tend to be less ambiguous when looked at later in the year. The ’M’ in SMART stands for ‘Measurable’, so evidence of performance should be collected and measured in line with the objective.
• Competencies. The evidence can also be used to evaluate how well the staff member demonstrates the levels of competencies required in their job description, role profile or person specification. Where the evidence does not clearly demonstrate underlying competence, line managers need to check whether: the competence is demonstrated through other means; or the competence still is needed in the role.
• Values. Does the evidence demonstrate an understanding and commitment to the organisation’s values? For example, if a value is ‘To actively encourage equality and diversity at work’, what evidence is there of behaviour in line with this value. In a mature organisation, there will be considerable overlap between the behaviours that demonstrate competencies and those that demonstrate values.
• No surprises. Line managers and staff members may need to be reminded not to save up the important discussions for their performance review meetings, but rather to deal with matters as they come up through the period. Although performance review meetings should have some formality, there is no harm in them being treated as opportunities to record or acknowledge previous informal discussions and meetings. After all, the entire performance management process is not intended to be extra management work, but rather a check that day-to-day management and implementation is following best practice.
So: five ideas that could help your line managers run more effective performance review meetings.
• Evidence. Reviewing a person’s performance is an activity that needs to be based on hard evidence. Both the line manager and their staff member need to get into the habit of keeping records and evidence of what they do. As a rule of thumb there should be at least one document per month describing or demonstrating what the staff member has achieved. Basing review meetings on evidence rather than people’s often faulty memories means that they will focus on what actually happened rather than on people’s differing interpretations of events.
• Objectives. The most important comparison is between the staff member’s objectives (goals, targets) for the period and their actual results (key performance indicators or KPIs). Objectives created using the SMART approach tend to be less ambiguous when looked at later in the year. The ’M’ in SMART stands for ‘Measurable’, so evidence of performance should be collected and measured in line with the objective.
• Competencies. The evidence can also be used to evaluate how well the staff member demonstrates the levels of competencies required in their job description, role profile or person specification. Where the evidence does not clearly demonstrate underlying competence, line managers need to check whether: the competence is demonstrated through other means; or the competence still is needed in the role.
• Values. Does the evidence demonstrate an understanding and commitment to the organisation’s values? For example, if a value is ‘To actively encourage equality and diversity at work’, what evidence is there of behaviour in line with this value. In a mature organisation, there will be considerable overlap between the behaviours that demonstrate competencies and those that demonstrate values.
• No surprises. Line managers and staff members may need to be reminded not to save up the important discussions for their performance review meetings, but rather to deal with matters as they come up through the period. Although performance review meetings should have some formality, there is no harm in them being treated as opportunities to record or acknowledge previous informal discussions and meetings. After all, the entire performance management process is not intended to be extra management work, but rather a check that day-to-day management and implementation is following best practice.
So: five ideas that could help your line managers run more effective performance review meetings.
Tuesday, 1 February 2011
How HR teams can use the outcomes of performance management review meetings
When Oakwood trainers ask students about what they do with the outcomes of annual performance management review meetings – documents composed and signed by both line managers and staff or similar files produced on computers – the answer is often ‘Filed’. This can be why performance management sometimes feels like a waste of time, if all the work just ends up in a filing cabinet.
But how should these important documents be used? Firstly they need to drive decisions about individual rewards (salary increases, bonuses and incentives), individual learning and development plans, individual career plans, and, in extreme cases, discipline or capability actions. These decisions need to be made by line managers with the support of their HR business partners, and then recorded and acted upon.
Secondly, the documents need to be put together, analysed and evaluated en masse to:
• Update the organisation’s succession plan
• Review the organisation’s competency framework and job family structure
• Assess the effectiveness of last year’s learning and development programme(s)
• Create the coming year’s learning needs analysis (organisational and occupational level) and learning and development plans
• Evaluate the effectiveness of the current performance management process and make recommendations for future performance management training
• Compare and cross-check the work of different line managers to increase fairness and consistency
• Enable demand-side manpower planning
• Audit the effectiveness of organisational development (OD) initiatives such as matrix management, virtual teams, hot desking, flexible working (such as part-time, annual hours and flexi-time, job sharing, home and teleworking etc.)
• …
All of which demonstrates how powerful a tool performance management outcomes can be. The LAST thing we should be doing is simply filing them.
But how should these important documents be used? Firstly they need to drive decisions about individual rewards (salary increases, bonuses and incentives), individual learning and development plans, individual career plans, and, in extreme cases, discipline or capability actions. These decisions need to be made by line managers with the support of their HR business partners, and then recorded and acted upon.
Secondly, the documents need to be put together, analysed and evaluated en masse to:
• Update the organisation’s succession plan
• Review the organisation’s competency framework and job family structure
• Assess the effectiveness of last year’s learning and development programme(s)
• Create the coming year’s learning needs analysis (organisational and occupational level) and learning and development plans
• Evaluate the effectiveness of the current performance management process and make recommendations for future performance management training
• Compare and cross-check the work of different line managers to increase fairness and consistency
• Enable demand-side manpower planning
• Audit the effectiveness of organisational development (OD) initiatives such as matrix management, virtual teams, hot desking, flexible working (such as part-time, annual hours and flexi-time, job sharing, home and teleworking etc.)
• …
All of which demonstrates how powerful a tool performance management outcomes can be. The LAST thing we should be doing is simply filing them.
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