This is the first in a series of three articles on Performance Management Practices prepared for The Stabroek Business by the Mersu Caribbean Consulting Group, a Trinidad and Tobago-based Image Management, Public Relations and Business Consulting Group
By Averil Williams
The current global recession has forced companies worldwide; to take a step back and utilize their analytical lenses to relook the way performance management is handled, and to enhance the methods that are used in conducting business. Business leaders are aware, this approach will deliver achievement of the desired performance that is needed to sustain yields in productivity and human performance. When married with factors that drive results this technique ensures strategic objectives are realized. The result is an effective system instituted to manage performance and implement change.
Have you ever heard or uttered this question before? “Why can’t Human Resource (HR) solve the problem of performance management?” The truth is, performance management is not an HR problem; it is an organizational problem. As an Organization Development Analyst and Performance Improvement Consultant, I’ve been auditing and evaluating business management systems for many years. I find it odd that employees and upper management alike talk about performance management as having its place in the Human Resource Depart-ment, separate and apart from the “Real World” of managing business.
The reality is, Performance management is the day-to-day responsibility of everyone within the organization, especially managers and supervisors. Human resource can provide templates and models, execute training, and offer advice, but the HR community should not assume sole responsibility for what is an important aspect of managing an organization from the Executive to the ‘Shop-floor’ level; this should be an inclusive process.
What is Performance Management?
Performance Management is a disciplined approach to understanding, monitoring and managing drivers of performance of organizations. So what exactly is performance management? The basic idea of performance management is to balance resources and targets on one hand and efficiency and quality on the other, as well as possible, and to ensure that the desired effects are cost-efficiently.
Basically Performance Management is:
● Clarification of vision and strategy across silos
● Translation of strategy into operational terms using scorecards
● Comprehension and alignment of multiple perspectives, all of which are vital to the institution
● Alignment of internal activities with the strategic plan
● Fostering employee abilities and commitment to objectives
● Defined measures of performance and target called key performance indicators
● Driving Decisions Based on Data
● Easy accessibility to “single version of truth” by all information consumers using performance reports and effective meeting structures
● Line-of-sight across business processes to the status and trends key performance indicators
● Culture of using information in the planning and decision-making process.
The Need for Performance Management
Organizations succeed when resources, both human and capital work together to achieve a common goal. This is also true for performance measurement, which includes establishing operating strategies, defining processes that contribute to the plans in place, evaluating and communicating the results to improve performance.
The common component to measure, account for, and improve performance is timely access to accurate information. This means access to information that contains details for staff while providing summary information, trends, and analytics for operations to management and visibility into progress towards institutional goals and objectives at the executive level.
In studying the system of Performance Management, it is plain to see that it is based on the principles of Alignment, Process Thinking and Practicability. The system starts at the Executive or ‘strategic level’ to determine external measures driven by stakeholder perspectives of the organization’s performance. The system then works through the organization to align organizational and operational measures with this focus. A set of Key Performance Indicators operates at the ‘tactical level’ enabling prediction and management of organizational performance. At the ‘operational level’, measures are utilized for monitoring, control and improvement of the way in which the organization creates and delivers its products and services.
Getting Performance Management to Work Requires a Clear, Concise and Known Business Strategy
Performance management practices have been the source of dissatisfaction and criticism for decades. New approaches and the adoption of technology have failed to quiet the critics. There are many questions surrounding the importance practice. Why the dissatisfaction at all levels? What are the critical factors in getting it to work? The answer is simple, one of the reasons that performance management fails to produce tangible business results is because the process is not connected with overall business strategies and objectives. One of the more common reasons that the process isn’t connected to policy is that the employed within the organization – including its leaders – can’t provide a clear and concise explanation of what the strategy is: It’s a dirty little secret: Most executives cannot articulate the objective, scope, and advantage of their business in a simple statement. If they can’t, neither can anyone else.
Here is an analogy that was presented in last year’s April Harvard Review titled, “Can You Say What Your Strategy Is?” :
Think of a major business as a mound of 10,000 iron filings, each one representing an employee. If you scoop up that many filings and drop them onto a piece of paper, they’ll be pointing in every direction. It will be a big mess: 10,000 smart people working hard and making what they think are the right decisions for the company—but with the net result of confusion. Engineers in the R&D department are creating a product with “must have” features for which (as the marketing group could have told them) customers will not pay; the sales force is selling customers on quick turnaround times and customized offerings even though the manufacturing group has just invested in equipment designed for long production runs; and so on.
If you pass a magnet over those filings, what happens? They line up. Similarly, a well-understood statement of strategy aligns behavior within the business. It allows everyone in the organization to make individual choices that reinforce one another, rendering those 10,000 employees exponentially more effective and productive.
Averil Williams BSc, CSPM,COM is a consult ant – firstname.lastname@example.org