A well-designed performance management strategy is a competitive advantage
This is part four of our series titled, ‘The value proposition of an HR consultant.” Over the past three weeks we have explored topics ranging from strategic hiring and effective communication to consistent HR policies. Our hope is that business owners and managers will learn the benefits of strategically thinking through and implementing HR practices in their organizations.
What does Performance Management mean, really?
- Performance Management (PM) is the process of creating a work environment in which people are enabled to perform to the best of their abilities. (Source: About.com)
- It encompasses all the processes that provide feedback, accountability, and documentation for performance outcomes. (Source: Talent Space Blog).
- PM is known as a process by which organizations align their resources, systems, and employees to strategic objectives and priorities (Source: Wikipedia)
Why is it important?
- More than 75% of managers, employees, and heads of HR feel that PM results are ineffective and/or inaccurate (Source: CEB Corporate Council, 2012)
- 52% of employees will actively seek a new job this year and they’re looking for career development, recognition and appreciation, honest conversations, and work that’s engaging and challenging. (Source: SHRM Webcast – Oracle)
- A survey by Watson Wyatt showed that only 3 out of 10 workers agree that their company’s performance management system helps improve performance. (Source: SHRM)
Why is it important to the bottom line?
We are going to focus on performance management primarily from a performance evaluation approach for the purposes of this blogpost.
As mentioned in previous posts, employees like to know what is expected of them and how they will be treated based on their actions. The PM topic is not one that managers or employees like because it takes effort, time, and can be uncomfortable depending on what needs to be communicated. A typical manager doesn’t mind giving positive feedback…they might even enjoy it. However, when it comes to constructive feedback, most managers tend to avoid confronting employees. It could be for various reasons …
- ‘It’s my most productive worker and I don’t want to de-motivate him/her’
- ‘I don’t want it to be awkward between us’
- ‘I don’t know how to communicate the message without hurting feelings’
- ‘It’ll eventually be fine so there’s no need to address it right now’
All of these are normal reactions but unfortunately a manager that cannot give constructive feedback whether formally or informally will struggle with the performance of their group. All employees have areas to improve and if nobody is taking the time to coach and challenge them…they will remain at status quo, which doesn’t help either party. Implementing a process whether formal or informal will help open communication lines, and thus open doors for improvement and more productivity, which in return impacts the bottom line.
From my years of HR experience, there are pros and cons to a formalized performance evaluation. In this blog post I’m not advocating for a formalized ranking evaluation or an informal coaching approach, but I do want to emphasize the importance of having a process around setting performance expectations, conducting effective performance and coaching discussions, and instilling a culture of rewards for stellar performance.
A company that links these areas together will find that their productivity will increase and ultimately will create a culture of continuous learning and improvement. All small and medium sized companies have different cultures and work ethics. As an HR consultant my job is to spend time understanding and evaluating the organization’s strengths and weaknesses and to create a process and approach that fits the needs of that specific company in regards to Performance Management.
Contact HR Designs if you would like to see how our HR Consulting services can help positively impact your bottom line. Stay tuned for next week’s value proposition…Cost Savings Initiatives.