HR Basics, HR Management

The Art (and Basics) of Performance Management

Business Boot Camp

Effective performance management is the avenue for achieving organizational goals that impact the bottom line of the business.

Master the skill and you will be able to create a greater alignment of the organization’s interests and those of the individual employees.

The process of managing

A process for managing the performance and development of your direct reports equips you to carry out your primary responsibility of getting work done through others.

Any performance management system is supported by critical skills that are necessary for both you and your direct reports to be successful. So, regardless of what particular system your organization relies on, the skills and tools described in this section will support your efforts to implement it. Simply overlay what you learn here with the system you use in your organization.

To start, let’s get specific about what performance management is and is not.

Performance Management is…

  • An ongoing process of working with your direct reports in a partnership for the purpose of helping them (and you) be successful.
  • An ongoing communication for the benefit of the organization and the individual.

Performance Management is not…

  • A once-a-year appraisal;
  • An opportunity to punish or intimidate your direct reports.

You need a plan to ensure that you achieve the “is” while avoiding the trap of the “is not.” You risk falling into the trap if you let performance management slip as a priority.

Most companies set expectations or objectives at the beginning, or near the beginning, of the calendar or fiscal year. Some of these objectives are set from the top down, and others are set up from the individual contributor level. However your company sets objectives, it is important that your direct reports agree to those objectives that they will own.

Review periods are also set by policy in most companies. Some companies require only an annual review; others require two, three, or four reviews annually.

Why managers balk at performance management

Regardless of the number of required reviews in your company, you may choose to hold more performance discussions than that number. Experts in the performance management field recommend that reviews be held at least quarterly so that individuals have the opportunity to get back on track if they have strayed off course.

Often, the most difficult step to take in putting together performance management plans is the first step — that is, to set objectives or expectations. The next big challenge comes in having review meetings.

Managers often balk at the prospect of working on performance management plans. They have a litany of excuses starting with “I don’t have time” and moving to “It’s just an administrative requirement” and “It’s not an important part of my job.”

If you keep one thing in mind, you can move past procrastination and resistance and get the process moving: You and your direct report are the team that gives the process energy and meaning.

Many managers think that they must do all of the work in the development of the performance management plan. But when the manager and the direct report share responsibilities, development of the plan becomes much more approachable.

No manager should feel that she is operating independently when it comes to an individual’s performance. After all, it is the individual’s job that is being affected, and the individual needs to take ownership for her success in that job.

The art of SMART objectives

Provide a clear framework for developing objectives so that your direct reports are in sync with you on how to express them. Well-written objectives follow the format of being SMART:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Trackable and time-bound

Once the objectives are written and agreed upon, tracking the results becomes an ongoing process. A review of the progress in meeting the objectives provides the opportunity for the direct report to ask for support and the manager to understand what to do to help the individual achieve the required results.

Examples of well-written objectives are as follows:

  • “Increase sales of project management software applications by 10 percent by end of year.
  • Train five departments on the use of the new expense reimbursement process in the third quarter of this year.”
  • Reduce data-entry errors from previous quarterly results by 3 percent each quarter of this year.”
  • Complete six days of security training by end of year.”

Setting objectives is the beginning of the continuous process of performance management. The middle involves ongoing conversations and meetings, at least quarterly, to discuss progress on expectations and identify what level of support is needed for successful achievement of stated objectives.

The final appraisal is the end. And the way to keep track of everything your direct reports do is by keeping records.

Reprinted with permission from AMA Business Boot Camp: Management and Leadership Fundamentals That Will See You Successfully Through Your Career, edited by Edward T. Reilly. Copyright 2013 American Management Association. All rights reserved. Published by AMACOM Books, a division of the American Management Association.

Edward T. Reilly is President and CEO of the American Management Association International. Prior to joining AMA in 2001, he was President and CEO of Big Flower Holdings, Inc., a leading provider of integrated marketing and advertising services. He also served as President of The McGraw-Hill Broadcasting Company, among various executive positions during his more than 25 years with The McGraw-Hill Companies.