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.