Performance Management

Performance Management

Often, the most dreaded time of the year for employees and their managers is when it comes time for performance reviews.  Too often, managers attempt to conduct these performance reviews without adequate preparation or appropriate training.  Employees become defensive and resentful of the process and too often, old and archaic performance management systems fail to achieve anything other than unhappy and unmotivated staff.

This doesn't have to be the case. 

What are the goals of Performance Management?

There are two main goals of performance management;

1. developing the employee, and
2. evaluating the employees performance.
   

Development

The first part of the performance management process is identifying development needs for the employee.  This can include:

• Performance improvement:  How can we develop this employee to help improve their performance?  For example, has technology changed?  Can we up-skill them to make the job more efficient?
  
• Promotion:  Does this employee have the potential for promotion?  If so, how do we develop them so they can be promoted?  What competencies do they need to be promoted?
• Communication/Feedback:  Employee and employer enter into a dialogue about the role, the good and bad.  How can things be done better?  What was done well?  Were there any barriers to success or achieving goals?

Evaluation

The second area of performance management is employee evaluation.  The performance review process attempts to evaluate the employees performance against a set of objectives or measurements.   There will be a number of reasons why an employee may have failed to achieve particular goals or objectives.  The manager and employee need to discuss the various reasons for these shortfalls and look at ways to support the employee in the future.  Again, it may be simply a matter of employee development or commonly, external events, outside of the employees control.

Frequently asked questions about Performance Management

Q  How often should I do performance reviews?

Q  My employee has performed badly and I don't know how to handle the interview.

A  This can be a difficult task for any manager.  Prepare yourself well prior to the performance review.  Ask yourself why the employee may not have performed well.  If it is a lack of skills, then consider further training for the employee.  If it is because of external factors, outside of the employees control, then you can't put the failed objectives down to poor performance.   Remember, the performance review is a time to talk to your employee and also listen.  Hear what they have to say. 

Q  Yes...but the employee was slack throughout the year and didn't achieve their goals. What do I do?

A  Ask yourself, what you did during the year to keep on top of the employee?  Did you monitor the employee and see that they were slacking?  Managing an employees performance is not just about a one year performance review.  As a manager you need to monitor performance everyday.  The annual review is simply a summary of the year and how it went.

Q  Yes, I did keep on top of the employee and they still didn't achieve their goals and objectives.

A  OK, well you need to place the employee onto a performance improvement plan.   After your performance review, gather up all the evidence that supports their poor performance.  Arrange to meet with the employee to discuss the actual details of their poor performance.   From this meeting and hearing the employees feedback, you can then make a decision as to whether or not you will give them a written warning.  If you do, the warning must be specific and detail exactly where the employee has not performed.  You should also include a performance improvement plan in the warning, which can simply be conducting the performance review process on a monthly basis or until the employee is back on track. 

Q  Should I link my performance management system with remuneration.

A  Many organisations link the annual pay increase to performance.  Simply put, if an employee is average, then they receive the minimum increase of say CPI or 2-3%.  If an employee ranks above average they may get 4 - 5% and people coming in under average do not receive anything.  Some companies may give under performers 1-2% for cost of living. 

Q  What about a bonus scheme linked to performance

A  Bonus schemes can be very difficult to measure, administer and quantify.  This is not to say they can't work.  But you should look at getting an expert opinion to help find the best reward system.  Remember, it should be simply enough for everyone to understand, without any ambiguity. 

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