The components of sound performance management

In a recent meeting with a diverse group of managers, the discussion turned to their satisfaction, or lack thereof, with the current performance management and performance review processes in their companies. The bottom line of the discussion is that most were challenged by their current systems, which focused more on performer review versus performance review.

For those who have worked with one of those subjective forms, it can be tough to be judge and jury in telling an employee that he/she is only a 3 on a scale of 7 in some particular talent area. As the discussion wore on, we discovered that there were a few in the group who worked with a more objective, company-aligned methodology. In light of this discussion, I thought it would be of interest to briefly review the four components of sound performance management:

Goal setting

At the beginning of every year, the employee and manager get together and jointly set the plan for the following year. This plan includes those key result areas that are critical to a job well done as well as SMART (specific, measurable, attainable, relevant, and time-phased) goals behind each of those areas.

We refer to this plan as a performance results description (PRD), which is a dramatically different document than a job description. A job description lays out tasks and responsibilities and remains a relatively stable document. The PRD is dynamic and changes every year because it is measuring quantifiable results. The PRD is a picture of what the job looks like when it is done well in quantifiable terms. In addition, both manager and employee make an effort to be sure that the PRD is aligned with the company’s vision, mission, and goals. In other words, there is a direct connection between the job and the overall focus of the organization.

Coaching

Once the manager and employee are in agreement, the PRD becomes a working document for the next year. We suggest that the measurables be revisited in structured coaching meetings at least quarterly. These meetings could be conducted monthly or bi-monthly as well.

The purpose of the regular meeting is to take the annual goal and break it into smaller pieces. In that way the manager and employee are discussing performance results throughout the year. If things need to be addressed, they are addressed now, not at a performance review six months later. Praise for meeting and exceeding goals is appropriate at these meetings. One can also take more immediate action or identify areas that need improvement. In either case, the manager as coach is in constant communication and has a guidance role throughout the year.

Development planning

When areas for improvement arise because goals are not being met, the manager/coach may suggest a number of different paths. It could be the need for some project-specific knowledge that the employee does not have. It might be better addressed by connecting the employee with a mentor who could act as a guide for that area. Or it might be a training program that will do the job. In any case, the situation is taken care of in real time, rather than at the end of the year at performance review time.

Performance evaluation

If the above three components are in place, the formal performance evaluation can focus much more on looking to the future, rather than dredging up the past. If done well, the constant contact throughout the year has helped the employee meet or exceed the goals that were set 12 months prior. The data that are brought into this meeting are reviewed by both parties before the meeting. Those data consist primarily of those regular updates and coaching results that have taken place in the previous 12 months. No surprises. Finally, a future-focused positive development plan can be created that looks at building existing skill levels as the employee climbs the career ladder.

In summary, Jennifer Forgie of OnPoint Consulting brings this all together: “If you don’t have clear, measurable goals in place and provide ongoing coaching and feedback, it’s almost impossible to have an end-of-the-year appraisal that employees see as fair and accurate, no matter how well the manager conducts the meeting.”

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