Performance Management: Proactively Keeping Score
Key Fact #1: Performance management keeps companies agile.
“Performance management” is a vital part of any business, since it keeps people and processes in-line with strategic objectives and serves as a clear indicator of problems and adjustment requirements. It’s not just a nice-to-have. It’s what keeps companies agile in a fast-advancing global economy. Without performance management, a company is doomed to slide backward toward obscurity.
“You can’t manage what you can’t measure,” as the expression goes, but very often companies lose sight of what needs to be measured and what metrics to use. Measurement should lead to analysis, discussion, revision, and further action. Tools like the balanced scorecard ensure that improvement opportunities do not go by the wayside through tunnel vision or through a lack of established goals and standards.
Performance management leads to the identification and selection of targets. These must be sufficiently rigorous to stimulate performance improvements while being simultaneously attainable. They must fit with the regional corporate culture, to remain a force of positive change that is acceptable to all workers. For example, problems can arise when politics or territoriality come into play, with separate departments or even individual managers modifying the metrics or the incoming data for their own specific reasons.
Key Fact #2: Performance management must be both top-down and bottom-up.
Thus, no matter how large a company is, a wiser approach to performance management is to ensure a single source of truth that is distributed from the top across all departments and siloes equitably and simultaneously. This would be something that allows all employees to understand the overall performance of their company, not just their individual contributions, through town-hall meetings, online notifications or both.
Leadership is vital in establishing and communicating performance management initiatives. This not only refers to the traditional positive strengths that leaders are traditionally expected to demonstrate, but also that they themselves take responsibility for missed targets, failures and the repair period to follow. Furthermore, leadership should never be a solely top-down undertaking. Some organizations perform better when employees are allowed to take a greater role in goal setting, with management regularly dropping by, not to “inspect,” but to learn, listen and show respect.
Communication is also vital and should be regular and open. In addition to town halls, time should be assigned to kaizen (continuous improvement) activities, mentorship opportunities, and reinforcement of positive achievements. These activities all require time and should be done regularly and consistently, but it is time well-invested.
Picking Up the Pace
Key Fact #3: Proactivity is the name of the game in successful performance management.
The best companies build performance management strategies that are proactive; that is to say they do not wait for market data or output reports that show what has happened. Change based on past indicators tends to come too late. Change and comprehension of performance must be more of a real-time activity, using data and technology to pull together and prepare information in as close to real time as possible, with interpretation, decision-making and deployment following quickly after.
Standardization of Process
Standardization makes performance management easier by establishing standards for every task and activity, giving people the awareness and skills to adhere to those standards, and ensuring regular proactive monitoring of performance against those standards.
Standardization can be difficult to adjust to, but it forms the basis of measurable performance. When this is paired with constant internal contact, communication and a breakdown of silo-based management sustainable performance improvements become eminently achievable.
- Tools like the balanced scorecard ensure that improvement opportunities do not go by the wayside due to tunnel vision or through a lack of established targets and standards.
- Targets must be sufficiently rigorous to stimulate performance improvements while being attainable.
- Leadership is critical but communication should permeate the whole organization and should travel in all directions.
- Change based on past indicators tends to come too late. Change must be a more real-time activity.
- Standardization forms the basis of measurable performance.