What is Performance Management? (Part 1 of 10 of HRSG’s Guide to Performance Management through Competencies)

Performance management is perhaps the least liked and least understood aspects of HR management. Most employees and managers dread the ritual of performance review, and it often does little to enhance or improve organizational productivity and operational effectiveness. Usually the performance plan reflects what has to be done by an employee, but says little about how the employee performed his work.  In an entirely goals-based system, an employee can achieve established goals (e.g., sales, revenue, profitability targets), but in the process alienate the people they work with.

This is the first in a 10 part series that looks at:

1. What is Performance Management?
2. Linking Performance Management to Corporate Strategy
3. How to Design a Performance Management System - Step 1
4. How to Design a Performance Management System - Step 2
5. The Performance Cycle – How Competencies are Incorporated
6. Stage 1 – Planning for Success
7. Stage 2 – Managing & Feedback for Success
8. Stage 3 – Evaluating Performance
9. Multi-source Feedback
10. Performance Management in Summary

A competency based performance management program provides both “the what” (goals) and “the how” (actions or competencies) of the tasks to be performed.  It permits better sharing of performance expectations between supervisor and employee, and improves the link between the organization’s goals and the employee’s part in achieving them.

Performance Management Defined

Performance Management is a process for establishing a shared understanding about what is to be achieved as well as how it is to be achieved. It is an approach to managing people that increases the probability of achieving success.

Performance management is an ongoing process

It is not just a set of forms, an annual ritual or check box process to meet corporate reporting requirements; and, it is not just the system that feeds into an employee recognition or bonus scheme.  It is about everyday actions that employees need to display to improve performance.  To be effective it must dynamic and operate in real-time, allowing employees to continually adjust and improve their performance, as required.

Establishing a shared understanding of what is to be achieved and how it is to be achieved

It is about establishing a shared understanding of what is to be achieved and how it is to be achieved.  Managers and employees need to have a common understanding about what success looks like for the employee, which in turn is linked to the organization’s core strategy and business goals.

An approach to managing people

It is about individuals and teams working together to support each other and achieve shared goals, and about a shared responsibility between superiors and employees.  Superiors must effectively manage those for whom they are accountable, for example through coaching and motivating, and assist them in achieving their goals.  Employees are responsible for their goals and achieving their work to the standards required.

Increases the probability of success

Performance Management is a continuous process that delivers clarity, support, feedback and recognition.  The goal is to achieve success in the workplace for individuals and the organization in which they work.

By integrating these key principles into your performance management process, your company will be well on the road to achieving greater productivity, better performance and improved supervisor – employee communications!

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The next blog in this series examines the link between Corporate Strategy and Performance Management. Sign up to our blog’s mailing list through the form on the right-hand side to receive the rest of the series in your inbox.

HRSG is a leader in competency-based performance management solutions and training. Contact us today to find out how we can help you.

Improve Organizational Effectiveness Through Competency-based Management

Too often we have seen organizations take way too long to design their competency frameworks and competency models, and forget that the goal is to use them as the foundation for selecting, assessing, developing and managing employees to support organizational success.  Competency models / profiles are of absolutely no value if they cannot be used effectively by managers, employees and HR Professionals in the complete life cycle of people management (recruitment, selection, learning, performance management, career development, succession, etc.).

Further, the competency profiles must define all the factors that contribute to success in the various jobs and to the organizational as a whole, both the general behavioral as well as the technical / professional competencies. All too often, HR practitioners jump on tried-and-true behavioral competencies (Communication, Leadership, Teamwork) while overlooking more technical ones (e.g., ability to produce a good report, ability to manage a project, etc.). Behavioral competencies often underpin the technical ones; however, especially when you try to take a strategic view of the organization, you quickly discover that behavioral factors alone are not enough.

Finally, there is a difference between creating a competency model and getting your organization to use it! Communication, training and development are absolutely essential. How can you expect a manager to do a competency-based evaluation (or a competency-based interview) if they don't even know what it is?  Providing training and development for managers and employees is essential to effective implementation (and it goes without saying that senior management needs to be 100% behind it).

My thanks to George Chernikov of the International Organization for Migration in Geneva, Switzerland for contributing his thoughts on the Linked in Discussion group - Competency-based HR Management: http://www.linkedin.com/groupAnswers?trk=view_disc&gid=158668&ut=2ZKgA863DVlBk1&commentID=87863907&viewQuestionAndAnswers=&discussionID=118799819

Competencies Out-of-the-Box, Or Not?

I was recently participating in a LinkedIn discussion regarding my experience developing competencies and competency profiles within an organization. As the discussion progressed, there seemed to emerge two opposing views: develop from scratch, or use a pre-defined solution. In my opinion, it’s doesn’t need to be one or the other.

It has been my experience that most organizations cannot afford to build a comprehensive competency library and framework that would properly address their needs. What you typically end up with is a scaled down solution that only addresses certain areas within the whole HR lifecycle, which diminishes the return on investment for competency-based management. What we recommend and implement time and again with our clients, is to start with a pre-defined and proven competency library (or dictionary), which gets you about 80% of the way there, and then focus your internal resources on refining those competencies to meet the specific needs of your organization.

If you are using a competency library housed within a talent management software suite, the system has to give you the flexibility to allow you to adjust the competencies to meet your organization’s unique culture and strategic goals. We have seen many organizations that have acquired copyrighted competency libraries that could not be adjusted to meet their needs. The result was strong resistance from management and employees. This is why we give organizations the right to modify our library of competencies to reflect their requirements, and provide tools and processes within the software for managing and communicating the competency requirements throughout the organization. This is particularly important when the organization is global in nature and wishes to ensure that executives, managers and employees around the world are being managed to the same best practice standards no matter where they are.

Some argue that it is cheaper or more cost-effective to develop the organization’s competencies from scratch, but our experience shows otherwise. In fact, it can take years to develop a comprehensive competency library covering all the general and technical / professional competencies that may be needed in your organization. While you are doing this, you are not gaining the benefits of competency-based management within your organization – for example, better recruitment and selection, improved performance, better leadership development, etc. Starting with a list of well-defined and proven competencies, and then modifying them to reflect your organization’s unique needs, gets you to the results you need faster while saving you development time and money.

Read the whole discussion at http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&discussionID=118799819&gid=158668&commentID=87025568&trk=view_disc&ut=2FO_LUkWNubRk1

Emerging Trends in Competency-based Management

Competency profiles a prerequisite to contract award
As a competency professional working in this field for over 25 years, I have worked with and trained clients of all shapes and sizes around the world in the area of competency-based management , or CBM. What I am seeing are more client organizations insisting on their suppliers being “CBM certified” either as a contract condition or prior to contract award. Many of the organizations that attend my CBM workshops at HRSG are there because they need to implement a competency-based framework within their organization as part of a contractual requirement. Their clients want to know if they are competent in what they do, they want to be certain they possess the needed skills, have the proper qualifications, or are aligned with their corporate culture.

As companies squeeze out their own operational waste, they turn to their suppliers to help them eliminate inefficient processes. It is not uncommon for organization to utilize competency-based performance management for individuals and some are event using it to manage supplier performance. The competency model identifies specific behaviors that allow the measurement of the progress and development. The set of defined behaviors contribute to the success of an efficient supply chain. We see this approach used in creating “Lean Environments”. A company can align with other business organizations who reflect the same core values and business philosophy. Competencies then provide a grid by which to measure the pursuit of the Lean Journey.

In the United States a “Certificate of Competency” is issued by the small business administration (SBA) to prove that a small business is capable of contractual performance. The certificate is necessary in cases where the small business is the low bidder on a government contract and the contracting officer who is charged with awarding a bid does not believe that the small business can carry out the duties required under the bid. SBA experts review the business in detail to assess its performance capabilities and issue a Certificate of Competency that requires that the contract be awarded to the business. Without it, businesses that are new to bidding on government contracts may have difficulty being awarded contracts by contracting officers who are unsure about their ability to perform.