Using Performance Management to Create a Culture of Excellence
Have you ever attended a meeting where people promised important deliverables but never followed through? Conversely, have you ever committed to a deadline knowing full well that you couldn’t meet it but that no one would hold you accountable for it?
According to recent research, 78% of all company leaders identify “getting the right things done” as a significant problem in their companies. It’s not surprising, then, that accountability has become a critical competency missing in many companies.
Some of this is due to the fast-paced nature of today’s business environment. With so many demands on our time and attention, we can barely keep up with the never-ending crises of the day; much less accomplish everything we have committed to doing. But a lack of accountability also stems from the absence of a (formal and informal) performance management system. Without such a system in place, clearly connected to strategic goals and objectives, it can be difficult, if not impossible, to engage people in following through on doing the right things in a timely manner.
A structured performance management process can strongly support ongoing efforts to build accountability into the organizational culture. It helps to keep everyone aligned with the strategic goals, and it focuses people’s attention on what needs to get done, by when. Without it, management can easily get off track and forget to measure and reward what we have told everyone is important.
Specifically, an effective performance management system:
- Communicates how individuals contribute to business success and how they will be evaluated.
- Aligns individual goals with key business priorities, resulting in greater focus, more efficient use of resources, and less time wasted on non-value added activities.
- Provides a comprehensive system for recognizing what gets done and reinforcing how it is achieved.
- Creates a discipline of measuring progress against specific goals and making adjustments as necessary.
In most companies, performance management consists of a once-a-year performance review session that is dreaded by manager and employee alike. To achieve the desired results (i.e., improved accountability), performance management needs to be an ongoing activity, not a one-time event. It requires two-way conversations between manager and employee so that both are working from the same page in terms of what is being managed and how it is being managed.
A good performance management process involves five key steps:
- Establish Goals. Start by linking what needs to get done to the strategic planning framework. Align the competencies, skills and knowledge of the employee to create specific action items that will guide the employee’s behavior going forward.
- Plan Development. Discuss short- and long-term development needs, including agreement on how and when development will occur, as well as prioritization of development to support more immediate business needs. Create a plan to accomplish the required and the desired learning and growth.
- Take Action. Provide ongoing and frequent direction and support while the employee applies energy and focus toward accomplishing the goals.
- Assess Performance. Evaluate the progress being made toward the goals and provide ongoing feedback to the employee on a formal and informal basis.
- Provide Reward. Acknowledge and reward employees through organizational programs, local recognition, and other approaches tailored to individual employees. This may also involve consequences and disciplinary action for poor performance.
Who has time to do all this on a regular basis?
Consider the consequences of not doing it: Lack of trust between employees and management; declining productivity and lost business due to missed deadlines and broken commitments; lower employee morale and higher turnover. These are just some of the more obvious consequences of a poorly implemented performance management system.
Perhaps the most overlooked, and costliest, of consequences is the loss of top performers. When superstars see poor performers getting a free ride because no one holds them accountable, they start looking for another place to work. And make no mistake, even in a bad economy, top performers can almost always find a job elsewhere.
Performance management is a joint effort. Leaders, managers and employees all have a role to play in creating performance excellence. Having an effective process in place, coupled with the skills and abilities to conduct it effectively, to manage performance makes it easier for everyone to perform well in their roles and to achieve your organization’s strategic goals.
Don’t spend time doing it over! Pause and focus on getting this basic right from the beginning.