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Performance Management once referred mainly to the burdens and pressures associated with annual performance reviews. Today, Performance Management – both in concept and practice – has caught up with contemporary leadership ideals.
Effective performance management helps develop high-achieving people in high-performing organizations. These organizations:
- Foster a culture of performance management by designing a user-friendly performance review process and system that promotes flexible, customized documentation and fits the needs of each department
- Link performance management and appraisals to organizational objectives
- Focus on the future more than the past in performance reviews through an emphasis on planning, goal-setting and multiple opportunities for feedback
- Use performance reviews as a tool to build trust, open communication and improve supervisor/employee relationships at all levels of the organization
- Walk the talk from the CEO down through the organization in modeling appropriate performance management behavior with direct reports
- Invest in training and education that encourages ongoing discussions between supervisor and employee in addition to any formal annual review
- Separate the compensation conversation from the performance review
IRI’s performance management consulting services help client organizations integrate best practices into their culture. Our approach to designing a successful performance management system is based on several influential factors:
I. Performance Management Alignment and Local Support
Performance management begins when senior leadership articulates the vision, mission and values of the organization. It continues through the efforts of departmental leaders and supervisors who set goals that serve as the orientation for all work within the organization. The entire performance management system focuses on the achievement of these goals, directly and indirectly.
Each level in the organization is responsible for and held accountable to the achievement of their goals by cascading responsibility and accountability, level by level, throughout the organization. Key to this process are communications and training that ensure alignment and address roadblocks and other barriers in organizations that contribute to employee dissatisfaction.
To reduce potential resistance to change, IRI encourages clients to identify and train “performance coaches” from within the organization – the “local” experts – who become powerful champions for change. They, along with top leadership, are pivotal to creating an effective, sustainable performance management system.
II. Clarity of Process Flow
The process flow of a successful performance management system involves four basic elements:
1. Planning: Supervisor and employee mutually agree on the job responsibilities, goals and the measurement criteria.
2. Feedback: Supervisors and employees meet regularly to track progress against identified goals.
3. Coaching: Employees receive coaching and support throughout the review period to address areas needing improvement, allowing employees to regularly get feedback and gauge their progress based on frequent dialogue and documentation.
4. Formal review: Supervisor and employee participate in a formal, year-end performance review that assesses performance versus expectations, and together identify goals and create a plan for the following year.
In implementing a comprehensive performance management system, clients follow a three-track project plan.
1. Communication and Strategy – Development of the overall strategy of the design or redesign of the performance management system, along with a comprehensive communication plan.
2. Training and Education – Training tailored to reach diverse and varied employee groups throughout the organization to help each understand their roles in the new system and learn how to meet the expectations of that role.
3. Performance Coach Training and Development – Performance coaches and “internal consultants” are trained to coordinate and deliver performance management training throughout the organization. They are responsible for coaching managers in conducting performance reviews to improve communication skills and strengthen relationships, and to measure the system’s impact and contribution to individual, work group and organizational performance.