Performance management is one of those bits of business terminology that’s mentioned so regularly it’s almost just another item of office furniture – like a printer, it serves a function but it’s only when you need it that you pay it any real attention. This means that often it can be easy for enterprises not to realise there are problems with their performance management until it breaks down entirely. At which point you find you have a queue of 150 documents to send out but a piece of equipment that simply growls and eats paper.
Clearly then, there’s a value in taking your performance management seriously. Adrian Wakeling, senior guidance manager at ACAS, believes the first step is truly understanding the purpose your performance management fulfils. “Performance management is the system you use to align your business goals with the work of your employees in order to get better results for your business and to improve individual and team performance,” he states. One of the most important things to recognise about performance management is it’s essential fluidity; plans need to be able to adapt according to the needs of either party. Wakeling elaborates: “As the business changes and evolves, an individual’s objectives should also change.”
This idea of the meeting of mutual need is something echoed by Liz Reynolds, HR director at Trustmarque. “You first have to look at the business and what kind of business it is and what it’s trying to achieve,” she says. Trustmarque’s primary function is on helping their customers get the best value out of their software solutions and technology. As a result, it’s a company with a very strong focus on interpersonal skills and relationships. “It’s all intellectual property, people and advising,” she explains. “Everything we do has to be centred around people and enabling them to do their jobs in the best way.”
And this is where truly effective performance management comes in. “Part of what we’retrying to do is set out a very clear vision for what we want for the business,” says Reynolds. Having a good deal of experience working with other businesses, she has become aware that their organisation is unusual in the amount of freedom it gives its employees – they are self-driven and determine how best to handle their day-to-day tasks. “People end up checking their own objectives and in many ways driving their managers as much as their managers drive them,” she says. The staff are very competent and – as these are their careers – they want to achieve and excel in their respective fields. “Managing performance becomes more about supporting and enabling, which is a lot of what we do in HR.”
But if one is to really understand how effective one’s performance management scheme is, then this idea needs to be dissected a little further. First of all, it’s vital that employees are engaged with the scheme, rather than feeling it is a hoop they must jump through. “We drive managers towards what we call a quality conversation,” says Reynolds. Simply working through fields and checklists isn’t going to create a functional performance management system because it’s not going to an encourage an employee to invest in their work. “You’re not going to get that employee engagement by treating them that way.”
“There are four ingredients of employee engagement,” Wakeling says. “Vision, voice, empowering line managers and integrity.” The most effective performance management systems need to address all of these factors. For example, it’s all very well having an overall vision but without an overall integrity to that vision, your employees will inevitably display little engagement with any performance management that is introduced. “Engagement is about getting the ‘people bit’ of your business right,” explains Wakeling. “Performance management is very much about aligning your people with your business interests.”
While the manner of delivery is important, however, some attention does need to be paid to the nuts and bolts of how you actually structure your performance management. And while this can sometimes appear to be very simple, in practice this can be deceptive. “Sales performance is very easy to measure in some ways,” says Reynolds. “They have to bring in a certain amount of revenue per month.” But it really does come down to more than just monitoring sales targets. “Reflecting the complexity of our business, we don’t just assess people’s performance – we’re looking at the mix of business,” she explains. “Are our sales people talking about solutions to our customers? Are they introducing managed services and longer term annuity business?” Hitting a key performance indicator (KPI) is obviously important but performance management also needs to look openly at the quality of the work taking place.
Good performance management also needs to be reflexive. If employees don’t feel that their managers are subjecting to the same level of scrutiny then faith in the scheme will inevitably dwindle. “It’s about making performance management a more dynamic process for employees – not just letting it happen to them,” Wakeling observes. “If employees trust their managers and have a good ongoing rapport, they are more likely to interact with the performance management.” This can take the form of anything from giving managers feedback on how they prefer to be managed to suggesting ways working practices can be improved upon.
Reynolds outlines how this can work in practice. “All of our sales managers get their employees metrics but they also get 360 degree feedback,” she explains. “They’re hearing directly from their teams about what they’re doing well and what they need to improve.” And this can be absolutely vital, not only in introducing across-the-board accountability but also preventing employees feeling like performance management is just a case of management ‘keeping tabs’ on them. Reynolds introduces an analogy to describe this degree of transparency. “It’s not like the room is just floodlit from above,” she says. “Everybody has a torch – there’s nowhere to hide as the light might be coming from any number of angles.”
As positive as all this sounds, however, performance management is also there to deal with problems when things go wrong. “We very much believe in rapid response, and more informal ways of dealing with performance,” Reynolds comments. “Often, if you look at things early, you can get to the heart of the matter before you have to start with formal processes.” Heavier-handed formal proceedings tend to have an inertia that makes them hard to stop once initiated, so pre-emptive measures can prove invaluable. “If you can have those discussions softly and early on, people are more likely to be honest rather than defensive,” she explains. “They’re more likely to say, ‘I’m really struggling at the moment with the new products’ or ‘breaking into this particular customer’.”
When things do become more formal, you can rely in part on existing procedures. “There may be overlap between performance management and your disciplinary process,” says Wakeling. If performance management doesn’t improve things, then formal approaches such as issuing a written warning and putting in place an agreed improvement plan are well-tested routes for dealing with ongoing issues. However, as Wakeling explains, “The aim of both your performance and disciplinary systems is to improve future performance rather than punish past performance.”
However, with an effective performance management programme in place, these cases should be in the minority. At its most effective, a performance management system will ensure the aims of your employees and the aims of your business are in sync. And when they’re both pulling in the same direction, there will be nothing to hold you back.