HR Management, Talent Management

It’s Not Hard: How to Design a Perfect Performance Management Process

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Here’s how to design the perfect performance management process.

It isn’t a trick. Really.

OK, well “perfect” may be a bit strong, but it is possible to design a performance management process that fits your organization and your culture.

Here’s what makes for a “perfect” program

Despite all of the negative press that performance management continues to receive, it is actually an important process for organizations, their employees and their leaders. If effective, it can measure and improve performance at the individual, team and organizational level. It can build a relationship of trust and confidence between the manager and the employee. And it can provide the developmental feedback that employees crave.

What makes a performance management process perfect for an organization? It is a process that the organization believes in, holds themselves accountable, and demands the level of energy which the organization is willing and able to provide.

The form, the number of ratings, the process don’t really matter. What matters is what the organization wants to achieve from their performance management process.

Once you understand that, the rest is fairly simple.

A wild and crazy assumption

I cannot tell you how many bright HR leaders (me included, at one point in my career) start with “what.” What should the form look like? How many ratings should we have? Should we have ratings at all? What is the bare minimum that our leaders will tolerate?

This makes for one wild and crazy assumption — that the organization wants and needs a performance management program.

But they do, you say! As HR professionals, we know that we need documentation to support employment actions, goals to help people focus and competencies to help people develop. So we go about building a program, training managers on it, and then tearing our hair out when managers don’t do it, or don’t do it right.

Instead, start with “Why”

Let me suggest another starting point.

Instead of starting with “what,” start with “why.” First, ask yourself, as the HR team, and then ask the organization. By having your own list of “why,” you can facilitate the dialogue with leadership and help them discover the “why.”

Start with the premise that you don’t need to do performance management. Give the executives the option. I can pretty much guarantee you that they will come up with their own reason to have performance management. If they don’t, you might want to consider your own options.

Once you allow your executive team to decide to have a performance management program, help them discover the “why.” All of a sudden, you shift the responsibility for the success of the program from HR to the organization.

Make it theirs

At that point, provide options for program design, reasons for each option, and let them decide.

And here’s the crucial point: Ask them if they are willing to commit to holding their leadership accountable for the process, and what they feel are the appropriate consequences should a leader fail to manage performance effectively.

The heavy lifting of program design is already behind you, the big “R” (Responsibility) has shifted, and you can design a program that fits the culture and the organization.

That’s my premise. I’d love to hear your feedback.

This originally appeared on the ….@ the intersection of learning & performance blog.

Carol Anderson is a Principal with Anderson Performance Partners a boutique consulting firm with the mission of helping the HR profession be as valuable to their clients as possible, intersecting performance and learning to actually drive organizational results. She has held HR leadership roles in health care, financial services, retail and the military. Most recently she served as Chief Learning Officer for a large health care system in Central Florida, with responsibility for talent development, leadership, professional and clinical education and team member engagement. Contact her at
  • Brian Cohn

    My HR partners were always a tremendous sounding board as we developed a fair, balanced scorecard. It’s always good to have someone ask why we chose this or that, or have we thought about another.

    Brian Erik Cohn

    • Carol MacDonald Anderson

      Those are the questions HR needs to ask….thanks for the comment Brian

  • Roger Plachy

    There is nothing more basic than knowing the result we want to accomplish.
    Roger Plachy

    • Carol MacDonald Anderson

      Agree Roger, but why do we so often forget the basics?

      • Roger Plachy

        We’re not encouraged to look at the big picture. We’re led to look at life as a series of little observations.
        Roger Plachy

        • Carol MacDonald Anderson

          That’s true, Roger. But that’s where diversity in thinking comes into play. Many of us look at the 30,000 foot vision and others see the details. We need each other.

  • steventhunt

    Great points! It is interesting (and refreshing) that it is very similar to points made in my new book Common Sense Talent Management

    Here’s a relevant excerpt:
    “The main challenge to performance management is it is expected to do many different things that do not always align well with one another. Performance
    management programs often mix multiple, conflicting objectives related to
    coaching, evaluation, compensation, staffing and development together into a
    single process. This can lead to processes that don’t do any one of those
    things particularly well, except giving employees and managers something they
    can all complain about. A key to designing effective performance management processes is to clarify exactly what the process is expected to accomplish.
    Only then can you make appropriate design decisions to ensure that your performance management process does what it is intended to do.

    Once you’ve decided the focus, you will be a position to effectively answer the following critical design questions, which the rest of this chapter explores in detail.
    1. What are the primary objectives of your performance management process?
    2. How do you define effective performance?
    3. When will you evaluate performance?
    4. How will you evaluate performance?
    5. How will you calibrate performance evaluations?
    6. How is data from performance evaluations used for pay, staffing, development, and workforce management?
    7. What training and incentives do managers and employees need to effectively utilize performance management processes?”

    • Carol MacDonald Anderson

      Good points, Steven. It’s about the questions, not the answers.

  • Tarik Taman

    Carol, as always great, though-provoking stuff from the voice of experience. I agree that too often HR begins with “what?”, leading to performance management that is process-driven rather than business-focused. So yes, “why?” is the big question, and I would add a third, which you allude to: “who?” Who is going to be responsible for this? Which executives, which managers? And who will deal with sub-optimal performance?

    • Carol MacDonald Anderson

      Great point, Tarik. The “who” leads to accountability! Thanks for your comment.