PERFORMANCE MANAGEMENT

Performance Management

What is a Performance Management System?

Performance Management is the term used to describe the process set by an organisation to ensure all employees are aware of the level of performance expected of them in that role, as well as any individual objectives they will need to achieve to achieve overall organisational objectives.

You will find that most organisations will have a performance management system in place; however, the difference will be whether the organisation has adopted an informal or formal approach towards their employees.

It is not uncommon for smaller organisations, due to the nature of their business, not to have specific documented processes in place. Any employee goals and objectives set will be mutually agreed upon between the manager and employee, generally adopting an informal approach. Larger organisations will tend to have a more formal documented process in place for managing employee performance.

It is generally considered good practice to communicate what form of performance management system your organisation uses for its employees during induction process. By the end of the induction process the employee should be aware of their goals and objectives they need to achieve within their role to ensure they are performing satisfactorily.

The sole purpose of a performance management system is to assess and ensure that the employee is carrying out their duties which they are employed to do in an effective and satisfactory manner, which is contributing to the overall business objectives.

How Can it be Delivered in the Workplace?

At work, an employee may subjectively feel that he/she is carrying out the duties for which they were engaged, in a satisfactory manner. However, those above that employee and indeed those around may feel, objectively, that the employee is not carrying out those duties satisfactorily. If there is no feedback from management to the employee on their progress, then the employee will never realise that some aspect of their work is wanting.

Therefore, if the employee is identified to be working beneath his/her capacity, then this performance deficit will need to be addressed sooner rather than later with the employee. As this performance issue will have direct consequences for the individual, department and organisation performance. For example, the employee will have no opportunity to improve their performance; their quality and service may be compromised which can affect the overall business performance and productivity.

When dealing with an employee that is under-performing, you will have to identify in what areas they are under-performing in: effective behaviour, effective performance, achieving business targets.

You will also have to consider whether the employee's under-performance is due to personal reasons or purely performance related.

A performance management meeting organised to discuss the employee performance should be a two way discussion which will provide you the opportunity to find out whether there are any underlying issues that you may not be aware of that are affecting the employee's performance. For example: clashes of personality, domestic situations, lack of training, etc. From this discussion you will also be able to assess if the employees lack of performance is purely performance related. If so, has anything changed in the workplace to cause this issue or change in attitude?

At the end of the meeting the employee should be aware of the following outcomes:

·         Fully aware of their performance goals they need to achieve and/or expected behaviour required by the organisation

·         An agreed action plan to rectify the employees performance issues, with clear guidelines on how the employees performance will be measured going forward

·         Organise any training needs highlighted by the employee.

·         Mutually agree a date which is fair and reasonable to review the employee performance

·         Potential consequences that could result from the employee performance not improving. Disciplinary Matters

·         Benefits the performance management system can provide the organisation through Development and Training

An effective performance management system will have the effect of focusing employees in an organisation on the organisation, departmental and individual objectives. Through successfully identifying employees training and development needs, and by providing constructive feedback to your employees on their performance. This enable employees to improve and develop their skill sets within their role, showing the organisation commitment to the employee by providing them with ongoing career development and training by valuing and recognising their contribution to the organisation performance.

A remuneration and rewards process can be integrated into the performance management system to encourage employees to continually improve their individual performance and personal targets. The value to the organisation will be motivated and trained workforce which will be focused on the achievement of its strategic goals and maintaining business productivity through staff retention and succession planning.

As with any process of Performance Management also has its advantages and disadvantages.

The following is some of the advantages of implementing a Performance Management process within a company:

 1. Increased Performance of individuals and department/organisation:

The main goal of performance management is to improve the performance of individuals to eventually improve the performance of the organisation as a whole. The correct application of performance management will identify development areas of each individual as well as good performance areas. By planning specific outputs linked to specific standards and measuring the success of the individual against this on a continuous basis will have a direct impact on the performance of the individual and indirectly the organisation as a whole. Utilising the results of the performance management discussions to identify focused development programs for employees will further assist in attaining the department/organisation goals. Existing and future problems can be identified and addressed and eliminated before becoming major obstacles in realising organisational goals and strategies. 

2. Better Communication: 

Performance Management focuses on the improvement of communication between the manager and his subordinates. The feedback and planning interview create opportunity for the creation and development of communication channels as well alignment between the manager and his subordinate.

It creates an opportunity for the manager to communicate organisational / departmental goals, policies, strategies and information to the subordinate and to ensure that the outputs of the subordinate is in line with policies and strategies. It also creates an opportunity for the manager to give recognition for good performance.

It creates an opportunity for subordinates to express their views and opinions as well as suggestions for improvement of performance and identification of obstacles. The subordinate gets the opportunity to discuss personal and company goals ant together with the manager fins a balance between them.

3. Performance Standards and indicators:

Performance Management focuses on specific valuable outputs that the individual must deliver which is linked to specific goals and standards that must be achieved during the evaluation period. By clearly defining the outputs, performance standards and performance indicators the subordinate can understand exactly what is expected from him. The impact of the subordinate’s outputs on the department and organisation can be explained much easier during the planning phase.

4. Succession and Career planning:

The Performance Management process provides valuable information that can be used during succession and career planning. Employee aspirations can be clarified and where possible incorporated into overall planning of the employee's goals and outputs as well as his development plan. Clarification of the managers goals and direction regarding the employee and his role within the department. Compilation of formal training and development plans per employee to ensure the development of the employee based on the results of the performance evaluation phase of the process. 

5. Training and development: 

The Performance Management process, when applied correctly, will supply valuable information regarding developmental areas of a subordinate. The information is used during the compilation of the subordinate's development and training plan after evaluating the individual's performance. This will also provide a "check point" to determine whether the past training had any positive effect on the employee's performance. 

6. Remuneration: 

Performance Management simplifies the linkage of salaries, bonus and allowances because it is comparable and explainable. 

7. Recruitment and selection: 

The latest requirements and specifications of a specific job and the readiness for promotion of the subordinate, are supplied by the Performance Management system. It is a tool that can be used for the selection of the most appropriate candidate for a specific job.

 These are just a few examples of the advantage that performance management has for the individual and the company and the manager.

 The following is some of the disadvantages or problems of implementing a Performance Management process within a company:

 1. Decreased Performance of individuals and department/organisation: 

It is possible that by implementing performance management within the company could have a negative impact on the immediate performance of individuals and indirectly the organisation. This could be because of the following reasons:

Lack of training of the individuals and managers

Lack of an formal change management process

Lack of addressing the change in the culture of the organisation

Subjectivity level to high during evaluations

Performance reviews used as a stick to get back at employees

Lack of addressing the fears of employees and clarification of the whole process and advantages to the employees

Lack of conformity regarding Performance Management in the various departments

Lack of management commitment

2. Degrading of Communication: 

Performance Management is a two-way communication process and should managers neglect this and turn the performance review into a one-way disciplinary interview it will have a negative impact on the employee. Should the employee feel that this interview is just to be reminded of things that went wrong, it will have a negative impact on the employee's performance. There need to be a balance between providing negative as well as positive feedback. Negative feedback should be given in such a way that the focus is on improving the employee's performance the next time the task has to be performed and not on another parent-to-child session telling the employee he hasn't done his job. The focus should either be on giving guidance as to how to prevent this issue occurring again or even clarify the requirements should it appear that this was not understood by the employee. 

3. Lack of Management commitment: 

Even though you may spend lots of time and effort in designing and implementing a performance management process for your organisation it may have a negative impact on performance due to the level of management commitment. The most important factor to successfully implement this process is the commitment and support of Top Management as well as Line Management. Employees must "feel" that management is committed to the process and it is to their own benefit to improve their performance, as there are some rewards in the pipeline should they improve their performance. 

4. Subjectivity:

Subjectivity during the performance management process with specific reference to the manager, is one the most fatal elements that can negatively impact on an employees performance. I have noticed many times how subjective evaluations of managers can negatively impact on the employee's performance. Therefor it is extremely important to eliminate subjectivity of performance evaluation by utilising specific measurable performance indicators i.e. financial statistics to prove whether the employee has dome his job or not. Usually the "gut feel" evaluations are very subjective and can be influenced by the current emotional state of the manager. To further eliminate subjectivity of performance evaluations is to implement a 360º Performance management process. Various people provide their inputs regarding the performance of the employee to provide a more objective and fair reflection thereof. 

5. Lack of Rewards:

Should there be a total lack of rewarding the employee for his performance (either negatively or positively), the performance management process will not be very effective in improving employee performance. There is always a "what's-in-it-for-me" element that you will have to address. Employee must see the benefits of the process. Whether financially or by "soft" rewards (i.e. being nominated as Employee of the Month).

6. Negative Attitudes:

 Negative attitudes of managers:

• 1. Conflicting goals with regard to performance evaluation. 
• 2. Lack of knowledge regarding the setting of objective performance standards. 
• 3. Incompetence to distinguish between responsibilities that the subordinate has control over and responsibilities the subordinate does not have control over. 
• 4. Fear of communicating performance evaluation results to the subordinate. 
• 5. It de-motivates employees. 
• 6. Performance evaluation is used for reprimanding poor performance. 

Negative attitudes of subordinates :

•  1. Lack of understanding why performance is evaluated.
  
• 2. Lack of objectivity and fairness.
• 3. Subjective measuring used for performance evaluation.
• 4. Personality evaluation and not evaluation of outputs.
• 5. Managers attitude that the subordinate is in full control of his performance.
• 6. Nothing is done after the performance evaluation.
• 7. Performance evaluation is just a tool to discipline the subordinate and has no advantages for the subordinate.

These are just a few examples of the disadvantages / problems that performance management has for the individual, the manager and the company. However there may still be more items to add to the list, it is important that when you implement Performance Management that these disadvantages / problems and attitudes are identified and specific features or actions are built into the process to counter the effects of these disadvantages / problems / attitudes.

References

https://www.thebalancecareers.com/performance-management-1918226

https://www.peoplestreme.com/what-is-performance-management

https://smartchurchmanagement.com/advantages-and-disadvantages-of-performance-management/