Perhaps one of the most important concepts of performance management is that it is a continuous process that reflects normal good management practices of setting direction, monitoring and measuring performance and taking action accordingly.
Performance management should not be imposed on managers as something ‘special’ they have to do. It should instead be treated as a natural function that all good managers carry out. To ensure that a performance management culture is built and maintained, performance management has to have the active support and encouragement of top management who must make it clear that it is regarded as a vital means of achieving sustained organizational success.
Importantly, the supporting process of performance management must be converted into reality by the deeds as well as the words of the people who have the ultimate responsibility for running the business.
Performance appraisal systems were usually built around an annual event. This is taken care by the personnel department of every organization.
Performance management should be regarded as an integral part of the continuing process of management. This is based on a philosophy that emphasizes −
the achievement of sustained improvements in performance;
the continuous development of skills and capabilities;
that the organization is a ‘learning organization’, in the sense that it is constantly developing and applying the learning gained from experience and the analysis of the factors that have produced high levels of performance.
Managers and individuals should therefore be ready, willing and able to define and meet development and improvement needs as they arise. As far as practicable, learning and work should be integrated. This means that encouragement should be given to all managers and members of staff to learn from the successes, challenges and problems inherent in their day today work.
The process of continuing assessment should be carried out by reference to agreed objectives and to work, development and improvement plans. Progress reviews can take place informally or through an existing system of team meetings. But there should be more formal interim reviews at predetermined points in the year, e.g. quarterly.
For some teams or individual jobs, these points could be related to ‘milestones’ contained in project and work plans. Deciding when such meetings should take place would be up to the individual managers in consultation with their staff and would not be a laid down part of a ‘system’.
Managers should encourage regular dialogue within the established pattern of briefing, team or group meetings or project review meeting. In addition to the collective meetings, managers may have regular one-to-one meetings with their staff.
If performance management is to be effective, there needs to be a continuing agenda through these regular meetings to ensure that good progress is being made towards achieving the objectives agreed for each key result area. During these interim meetings, progress in achieving agreed operational and personal objectives and associated work, development and improvement plans can be reviewed.
Interim review meetings should also be conducted along the lines of the main review meetings. Any specific outcomes of the meeting should be recorded as amendments to the original agreement and objectives and plans. Two of the main issues that may arise in the course of managing performance throughout the year are updating objectives and continuous learning.
Performance agreements and plans are working documents. New demands and new situations arise, and provisions therefore need to be made for updating or amending objectives and work plans. This involves −
discussing what the job holder has done and achieved;
identifying any shortfalls in achieving objectives or meeting standards;
establishing the reasons for any shortfalls, in particular examining changes in the circumstances in which the job is carried out, identifying new demands and pressures and considering aspects of the behavior of the individual or the manager that have contributed to the problem;
agreeing on changes required in objectives and work plans in response to prevailing circumstances;
agreeing on actions required by the individual or the manager to improve performance.
Performance management aims to enhance learning from experience — learning by doing. This means learning from the problems, challenges and successes inherent in people’s day-to-day activities.
This principle can be extended to any situation when managers give instructions to people or agree with them on what needs to be achieved, followed by a review of how well the task was accomplished. Such day-to day contacts provide training as well as learning opportunities and performance management emphasizes that these should be deliberate acts.
Let us consider two examples — one at the Team level and one at the Individual level.
A team with the manager as project leader has the task of developing and implementing a new computerized system for responding to customer account queries. The team would start by jointly assessing with their leader their terms of reference, the project schedule, the budget and the results they are expected to deliver.
The team would then analyze progress and at periodical ‘milestone’ meetings would review what has or has not been achieved, agree on the lessons learnt and decide on any actions that need to be taken in the shape of modifications to the way in which they conduct the project for the future. Learning is an implicit part of these reviews because the team will be deciding on any changes it should make to its method of operation – learning can be defined as the modification of behavior through experience.
The team would need to adapt their behavior as required by the organization and what lessons have been learnt and how they need to behave in the future on the basis of this review.
The same approach would apply to individuals as well.
The regional manager of a large sales company holds a monthly meeting with each of the field officers. At the meeting, progress is reviewed and problems discussed. Successes would be analyzed to increase the field officer’s understanding of what needs to be done to repeat the successful performance in the future.
These are examples of project or periodical work reviews. But continuous learning can take place even less formally, as when a team leader in an accounts department instructs an accounts assistant on her role in analyzing management information from the final assembly department as part of a newly introduced activity-based costing system.
The instructions will cover what has to be done and how, and the team leader will later check if the things are going as planned. This will provide an opportunity for further learning on the part of the accounts assistant, prompted by the team leader, in any aspect of the task where problems have occurred in getting it done properly.