How can any form of managed performance to expected (personal or organizational) outcomes be achieved if you don’t have a system or a process that defines and enables the measurement of good or bad, better or worse and right or wrong?
What Is Managing Performance all about?
I have seen performance management defined as activities which ensure that goals are consistently being met in an effective and efficient manner. It usually focuses on the performance of an organization, a department, an employee. It is also known as a process by which organizations align their resources, systems plus behaviour and results of employees to strategic objectives and priorities.
Results Through Others
When we are placed in a position of leadership over others in a managerial role in an organization, we no longer achieve our results by doing everything ourselves. We do so through leading the capacity, skills and performance of those we are responsible for to the defined and expected outcomes, right?
In the same way, where we are subordinated to leaders or managers, we need to engage and apply our skills (and those of our subordinates) to further our own, theirs and the aims and objectives of the organization.
Irrespective of where we fit in that “pecking order”, we are all usually subject to a set of rules of the game, which we need to learn in order to be able to play and succeed in that game. It is the degree to which these rules are defined, understood and lived that I wish to explore today.
Management is the process of maximizing outputs with the inputs (usually scarce resources) available. When those resources are people, they need to be led to a common purpose or goal. The collective outputs achieved are also called our performance, be it in nominal terms or growth terms or against a budget etc.
Is your Organization Really Managing Performance?
Performance could mean organizational performance, in which case we are talking about outputs. Outputs like production or quality improvement or we could be referring to number of orders, revenue or profits etc. And when we talk about performance, the expectation is usually that performance reflects some form of improvement or growth over a period of time, right? Performance improvements can range from increased investment in systems or processes to simply better led and competent or motivated resources and hence achieved outcomes. All of these are usually measured against budgets or prior periods.
How About Individual Or Collective Personal Performance?
Performance usually also means individual or collective personal performance of the people engaged in the outputs. Improvement here could emanate from better creativity or training or skills or motivation or just attitude.
All of the above are part of performance management, and when applied to a person or group of people, there are usually also a set of measures in place that assure there is a common or minimum level of “standard”. This enables the performance of individuals to be comparably understood, reflected and “managed”.
Measurement And Application – Does It Feature in Your Company?
Performance can be measured subjectively or anecdotally or objectively. It is usually also measured against a “target or budget”.
In many organizations this starts with a set of goals or objectives or targets or budgets that are “set” for a department or group or team or project or specific individuals.
The achievement of or exceeding these goals and objectives are also often linked to a “profit share” or “incentive” or “bonus” etc.
Also, performance or results are often linked to the proportion an individual will receive of the annual available salary increase “bucket”. There are many different performance management systems to be bought or used or many companies develop their own.
Managing Performance – The Spectrum
I have seen a range of different levels of performance management, from extremely infantile and unsophisticated approaches (usually in small businesses) all the way through to what I would consider an “overkill”. This is where the degree of detail and structure is almost stifling the leader and led from being able to constructively hold a conversation that leaves any room for interpretation and motivation.
Whereas the former is quite normal, given the significantly larger number of small businesses, the latter is usually only found in very large Corporates and Government organizations.
Irrespective of organizational size and sophistication, most performance management sits between these two points on the spectrum:
- At its most basic, performance management can simply be a “development discussion” between a manager and a subordinate. This is where the past years’ performance is discussed and reviewed and the outlook and goals for the New Year are set. The “measures” are largely anecdotal or subjective.
- At the other end of the spectrum, particularly where performance is linked to a salary increment or incentive or bonus etc, the measures have to be quite specific and objective. They certainly have to be measurable and tangibly linked to certain evidence that removes any subjectivity or interpretation that could support favouritism etc.
Is It Formal Or Engaging?
I have found that the more formally performance management is implemented in an organization, the more structured it usually is too. This often results in a form being completed at the start of a business year in which boss and subordinate “agree” on a set of targets and desired behaviours for that year. I put “agree” in parenthesis because this is already where subordinates can allow their manager to impose targets on them which they aren’t comfortable with, but feel obliged to accept and sign off on.
Then usually at or towards the end of the year, both parties are obliged by the system to meet again and measure the performance and record the outcomes according to the metrics and the rules of the performance management system. I have found that the more formal, the greater the risk of it being a process “we have to do, so we might as well do it…”.
What I prefer and certainly strongly encourage my clients to pursue is that the subordinate takes as much control of this process as he or she can, given it is his or her performance we are measuring and managing. That includes making sure that there is alignment of expectation, agreement on what matters and a willingness to engage in the monitoring and fine-tuning process. If done at different times during the year, both parties can best assure the achievement or them exceeding the expected outcomes, not because they have to, but also because they want to.
So What Next?
This blog post serves to introduce the topic of managing performance in general.
There are a number of performance management pointers I would like to share with you from my decades of experience in large Corporates as well as my exposure to so many small businesses I have mentored or consulted to.
Topics from my other articles like trust and respect as well as the leadership of self and of others plus delegation and diplomacy give substantial inputs into the “smarter” way of leading and therefore performance managing individuals, as well as how we conduct ourselves as subordinates. They are equally relevant for the leader and the led.
They are however too voluminous to share in one article, and so I have chosen to address them in a Performance Management Trilogy. I’ll focus next week on preparing for your own performance review and the following week on performance managing those you lead.
In closing I’d like to revisit my opening question: you are serious about your career growth and success, right? Whether as a leader or the led, if you find yourself in an organization where performance is left to the opinion of the boss alone, isn’t it time to push for the implementation of some changes? And if that isn’t possible to consider whether you are “on the right bus”?
This is your career. Are you keeping yourself in control of it, or are you allowing that to drift?
Click here for the other 2 blogs in this trilogy: