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Performance Management

Week 2

Define your organisation’s Performance Management goals

How effective are your organisation’s performance management processes? Do they meet the needs of your organisation and deliver what is required?

You can’t properly answer these questions until you have established what the goals of performance management are for your organisation. Before we started building Clear Review,  we spent many years working as consultants, helping organisations to do better performance management. The first questions we always asked were “Why do you bother with performance planning and doing performance reviews? What would happen if you just didn’t do it?”.

Doing performance management properly takes time; so if you’re going to ask your employees and managers to invest their precious time in it, you need to be 100% clear on why they should do it – why it is important for the organisation and what the benefits are for them personally.

Agreeing your Organisation’s Goals for Performance Management

The starting point is to discuss with your senior management what they think the objectives of performance management should be for the organisation. Later on in our masterclass, we’ll be emphasising the importance of getting senior management buy-in to performance management, so involving them in this activity now is an important part of getting that buy-in. A survey conducted by eReward in 2014 found that the most common goals for performance management were:

  • to improve organisational performance
  • to align individual and organisational objectives
  • to develop a performance culture
  • to improve individual performance
  • to align individual behaviour to organisational values
  • to provide the basis for personal development
  • to inform performance pay decisions

Other goals for performance management that we commonly come across include:

  • to improve employee motivation and engagement
  • to identify high performers for talent management purposes
  • to measure potential for succession planning / promotion planning purposes
  • to identify under-performers
  • to record performance evidence to justify HR decisions (e.g. dismissals for poor performance) if legally challenged

Prioritising your Goals

Once you have agreed your goals, the next step is to rank them in order of priority. Again, this is best done with your senior management as a group. Prioritising is very important as some of the goals may be contradictory. For example, there is strong evidence that linking performance appraisals to pay (e.g. through an overall performance rating) negatively impacts the personal development aspects of performance reviews (due to employees being less honest about things that have not gone well). Therefore, as you go through the process of developing or improving your performance management process, having the overall goals prioritised will help you when you need to make decisions.

What’s in it for your managers and employees?

Whatever the goals of your performance management process, its success will ultimately depend on how well it is implemented by your managers and employees. As part of this, you’ll need to ensure that they understand the organisation’s goals for performance management. But that’s not enough. You’ll also need to sell the benefits to them – what’s in it for them personally? Only if they buy-in to the rationale for performance management and understand how it can improve their working life will they put in the time to do it properly. Otherwise it will be viewed merely as a box-ticking exercise, as it is in far too many organisations.

To sell the benefits, you’ll first need to define what they are. This is a great opportunity to engage some of your line managers and employees, either through workshops, interviews or surveys. Approach those people in your organisation who you know undertake really good performance planning and have high quality, year-round performance and development discussions, and ask them what benefits they have seen from doing this. Show them the organisation’s goals for performance management that you have agreed and ask if they have seen evidence of these goals being achieved at their level. For example, have they seen an increase in their team’s results? Has engagement or morale increased? Has better team member performance enabled them to delegate more effectively and has this led to a better work/life balance for them? Have they been able to fill more positions internally due to a focus on personal development planning?

Is your performance management process delivering?

Now that you’ve defined your organisation’s overall objectives for performance management, and understood how achieving these goals can translate into genuine benefits for individuals, it’s time to assess whether your current performance management process is achieving these goals and benefits. We’ll be discussing how to do this in Week 3 of the Performance Management Masterclass.

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Masterclass Programme

  • Week 1 – What is effective performance management?
  • Week 2 – Define your organisation’s goals for performance management
  • Week 3 – How to measure the effectiveness of performance management
  • Week 4 – The 5 keys to successful performance management
  • Week 5 – How to get buy-in to performance management
  • Week 6 – How to ensure high quality objectives and personal development plans
  • Week 7 – Avoiding the 4 pitfalls of performance appraisals
  • Week 8 – Developing performance management skills in your employees
  • Week 9 – How to launch a new or improved performance management process
  • Week 10 – How to implement an online performance management system

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