Good Performance Management
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Key Components of a Good Performance Management System
Performance Management Systems Defined
Performance management, regardless of the industry or company, is a “hot” topic that has many buzzword definitions. However, all forms of summaries, definitions, or explanations can be reduced to basic, classic principles that always work.
Small Business CEO offers a simple and comprehensive definition. A good performance management system is a “set of tools, processes and actions that enable you to maximize the performance of your employees.” Revolutionary theory? No. Solid and valuable? Yes.
Prior to the electronic media and communication explosion of the past two decades, there were fewer theories and more “seat of the pants” management systems. However, few dispute the value of performance management action plans to optimize staff achievement.
Regardless of the individual components of any management system, as a C-level executive, your leadership style determines the success or failure of your efforts. No one can create a technique that ensures high performing staff activities.
As all experienced sports personnel know, “great athletes make great coaches.” As a senior executive, you need good staff along with strong leadership and performance systems to succeed. Knowing the key components of good performance systems should help you achieve your goals.
Key Components of a Good Performance Management System
An effective performance management system need not be complex, overly scientific, or high tech. The bottom line is always success, regardless of the road travelled to achieve the goal. For example, the legendary Lee Iacocca, trying to rescue a bankrupt Chrysler Corporation, opted for the risky catchphrase, “If you can find a better car, buy it!”
While some experts believed this strategy to be a “kiss of death” for Iacocca and Chrysler, it worked. The brand, the company, the stockholders, and the vehicles were saved. Of course, in this situation, more than an effective management system was required. To turn around the company, senior management employed a bold strategic plan, extensive financial expertise, and inventive marketing techniques.
Yet, all may have been useless and their recovery derailed without a solid performance management system. Based on classic, proven principles, here are some generally agreed upon components of an effective performance system.
Strategic Job Plan and Stated Performance Objectives
This critical first step, explains (in writing, of course) the key components of job categories. Along with identifying important specific job features, senior management states their desired performance objectives and expectations. C-level executives should avoid creating a convoluted document. For example, if a certain job contains eighteen aspects, addressing each of these may prove more confusing than effective. Try to identify the primary components, preferably ten or less, and clearly state senior management’s expectations. This promotes clarity for and, hopefully, the understanding of your employees.
- Comprehensive Performance Evaluations. One of the most important, yet often misunderstood (particularly in smaller companies) documents is the employee performance evaluation. Thoughtful staff evaluations, clearly measuring performance using the already benchmarked achievement objectives, display a measurable success or failure for both senior management and staff discussion.
- Performance Improvement Suggestions. Where individual (or team) performance is less than idyllic, senior executives can offer improvement suggestions delivered in a positive, encouraging manner. Completing the first two components properly typically leads to the success of this step. Instead of a criticism focus, discussing performance improvement suggestions offers employees a better “road map” to success. Most staff members will welcome these suggestions as valuable help.
- Open Communications and Two-Way Feedback. The intimidation and “us versus them” factors can be minimized or eliminated by encouraging honest communication and two-way feedback. When senior management and staff are comfortable exchanging ideas and thoughts, your performance management system is working effectively. Keeping everyone on the same page and the same team usually leads to improved performance.
Regardless of the ability and professionalism of your Human Resource Department, you should require all management personnel and staff to contribute to creating your performance management system. This input, particularly critical with the first component, should establish a positive atmosphere of cooperation and a commitment to excellence. Encouraging open communications will spur staff to make useful contributions to senior management’s performance objectives and expectations.
As a C-level executive, you need not re-invent the wheel or create a complicated high tech process to install a wonderful performance management system. The strength of this program is its simplicity.. Designing a system that is understood by both senior management and the most inexperienced employee ensures success of the process. Translating this to operational success is up to you.