Performance Management in Summary (Part 10 of 10 of HRSG’s Guide to Performance Management through Competencies)

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

Performance management is about achieving results in a manner that is consistent with organizational expectations. Integrating competencies within the performance management process supports the provision of feedback to employees not only on “what” they have accomplished (i.e., performance goals), but also “how” the work was performed, using competencies for providing feedback. Assessing competencies as a part of performance management is an important means of assisting employees in understanding performance expectations and enhancing competencies.

Importance of how Performance Management is implemented
Regardless of how the system and forms are designed, the latest research indicates that how the Performance Management process is implemented is as important, if not more important than the defined form, process and the performance appraisal itself.

The issue is that performance management is often viewed to be a series of prescribed steps within formal administrative systems that are disconnected from the day-to-day activities, rather than a process for supporting performance effectiveness (e.g., communicating clear work expectations, setting short-term objectives and deadlines, and providing continual guidance). Although well-developed tools and systems can facilitate performance management, these alone do not yield effective performance management. Instead of making further changes to formal performance management systems, many organizations are now devoting more attention to improving supervisor / employee communication and working relationships (e.g., levels of trust). Hence, if performance management initiatives are to succeed, the focus needs to shift from the system itself to its use as a tool that guides individual and team development towards organizational goals.

Integrating Performance Management in Your Talent Management System
The results of the Performance Management can feed into a number of key talent management processes. In some organizations, the ratings feed into and support the determination of merit increases in pay. Incorporating competency assessments supports the analysis of strengths and gaps in employee competencies, thereby supporting the development and implementation of Individual Learning Plans.

The competency assessment can also support career development and succession planning by providing an assessment of how closely the employee matches the competency requirements of other jobs in the organization. By incorporating the competencies in the performance management process, the organization has the data and information to examine the supply of available talent to meet the current and future business needs of the organization (Strategic HR Planning). Finally, by analyzing the selection outcomes against later job performance, one can determine the efficacy (empirical validity) of the recruitment and selection process.

Best Practices for Effective Performance Management
In summary, best practice research indicates that to be effective Performance Management processes should include the following features:

• Links individual goals to the corporate and work unit business plans and goals;
• Focuses on results, behaviours (competencies) as well as process improvement;
• Regular reviews and updating of performance plans to address changing demands;
• Training for both managers and employees on how to effectively give and receive feedback, including providing feedback to employees who experience challenges in performing to the standards required in their jobs / roles;
• Training for managers on how to provide performance evaluations that are valid, fair and unbiased.

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