Praxis Management Ltd.

This management discipline has got a bad name with employees, as a ruthless tool of management to force people to work harder. This is down to poor managers implementing a good idea badly. The most important aspect about performance management is that the performance targets must be negotiated with employees and definitely not handed down from above.

Oh! It’s so much easier to impose targets but its self-defeating and the refuge of weak managers. Good leaders recognize that people come to work to do a good job and that a performance management system can help them measure their success. And every worker looks for a way to measure success to get not only a sense of achievement but also a feeling of security and confidence that comes from knowing they have achieve a performance level agreed and expected of them by their employers. This increased confidence itself encourages people to stretch themselves further for the rewards attached, whether pay through a performance related pay process or just to be held in high esteem. This contributes to profitability.

Treat a performance management system as a top down tool for driving productivity and you will get the exact opposite results. It’s a sensitive tool and handled by poor managers will do more harm than good.

A good performance management system is the hardnosed core of a values based management system that helps more traditional managers settle into the cultural changes associated with this style of management. 

Many businesses fail to measure whats really important. You will have to determine what’s important within your own business, but there are some general principles of performance management, that are worth taking a moment to study.

Performance management is a means of getting better results from the organisation, teams and individuals by understanding and managing the performance within an agreed framework of planned goals and standards.

It is a process for establishing a shared understanding about what is to be achieved, and an approach to managing and developing people in a way which increases the probability that it will be achieved.

Performance management is based on the simple proposition that when people know and understand what is expected of them, and have been able to take part in forming those expectations, they can and will perform to meet them.

The overall aim of performance management is to augment a culture in which individuals and groups take responsibility for the continued improvement of the business process and of their own skills and contribution.

At the heart of the method are regular performance review meetings where progress can be reviewed. In a ‘values-based’ culture these review meetings are venues for high performance coaching and a core part of the person centred process fundamental to respecting and developing the people who contribute to organisational success. It is imperative that the Performance Management  system is understood to work hand in hand with good coaching.

Performance management works best with SMART objectives, which when monitored on a regular basis, enables organisations and individuals to respond flexibly and swiftly to unplanned outcomes.

SMART is Specific, Measurable, Achievable, Realistic and Timed. 

To many people this is a normal process of good management but many more people require encouragement, support, guidance and training within a well-defined framework for managing performance.

There are a string of questions that a good manager would ask in an attempt to discover what is critical to measure and monitor in any company. So in your business:
Where is your profit margin?
What is it you sell and who produces it?
How do you measure productivity?
How do employees measure their success?

These are examples of reflective questions. As the process is implemented and capabilities develop and improve mangers will become better at finding the right reflective questions in different situation which help employees rise to their potential.

Now if you know what to measure, and people understand the level of productivity required, you have the basic information to support a contract with your staff. It’s a new type of contract and its much easier to manage.

It is this type of contract, based on shared values and a commitment to an inspiration goal that enhances staff loyalty, reduces turnover and makes recruiting much easier.

Employees will want to work for your company because of the fulfillment they experience from their work. Ignore how they experience fulfillment and they will leave you. So regardless about any other performance indicators, you might use to measure your success; you must measure staff turnover, and staff motivation. There will be a strong co-relation between staff turnover and profit. Working hard to build a good performance management system means digging behind the headline measurements to find out what the really sensitive indicators are.

Remember performance management is a reflective tool consistent with every aspect of a ‘values-based’ culture of management, and must be understood and implemented as a integrated part of the overall process. Don’t be tempted to implement a performance management system in isolation from the other tools.

If you have found this section tough, then your in good company. Many CEO’s I’ve worked with have understood the principal quickly but struggled to find the right measures. Coaches can be very effective at asking naïve questions that help cut to the rub, where as to people in the business can be just to close to see the obvious.

And now having satisfied some of the more traditional managers for a hardnosed tool I want to move on to coaching (the next posting), the very heart of a person-centered, high performance culture. It is the single most important activity that can boost productivity and creativity. It is essential in a knowledge economy.