If you want to be cutting edge you need to measure your results and performance manage your team.
Getting the best out your people can sometimes be a stressful business. In my many years of managing and subsequently as an HR professional, one of the biggest barriers to great performance management is that people have different perceptions of what performance management is about.
Even terminology around performance management can be misconstrued. For a business to succeed you need to make sure that when planning, developing and communicating your performance framework you get it right. Your performance framework sits underneath your overall organisational purpose and mission. It is not the end the result: a performance framework is the examination and monitoring of the factors which will make you profitable, or successful; or not.
Businesses who get their performance framework right have a huge advantage. I know of some organisations who don’t actually have a performance framework in place, and frankly they are missing a trick. Because performance can contain a myriad of factors; the first hurdle is to decide on the unique framework for your business.
Measuring and managing performance are two different processes. They are frequently confused. Depending on style and culture of an organisation, these two simple elements can be approached in different ways. A good organisation will have no doubt at all about all of the elements of their performance measurement and their performance management regimes.
There are six basic performance measurement equations: These are:
The six components all work best when they work in a balanced scorecard framework comparing each equation against each other. So for example, you might be the most efficient team, but if your customers aren’t happy then that could affect profits. Likewise if your productivity is top end, but your costs are high then you haven’t got the right balance.
Performance measurements can be introduced at organisational or team level. They can include outcomes, targets and results, both quantitative and qualitative.
Once you have decided on the most impactful performance measurements, then your next task is to have a sound framework of performance management. This is the golden thread that runs throughout your business, and links your outcomes, standards and processes to your people and how well they perform.
Performance management is all about how your individual employees work. What makes performance management different from performance measurement is that it is about individual contribution. Performance Measurement is about the collective organisational and teeam results of individual contribution. It is a subtle distinction.
Obviously the elements of performance that you decide to manage should link into the measurements on your balanced scorecard; but they are about the specific elements of that person’s job, and ability to do that job. So for example, the performance requirements of an office junior will be very different from an MD. For that reason it is essential that your business has the right job roles to get the right results!
The elements of individual performance can vary greatly. A way to keep this simple is to break down the components of what an individual needs to bring to the party to help your business be successful. The four most common components are:
A good business will have aligned the overall desired measurements or results, with the elements of managed performance. I have seen literally hundreds of performance frameworks, and if you are intending to or in the throes of developing a performance framework, I would contend that there are only two rules:
1. Keep it simple. If your 13 year old can’t understand it, then it won’t work
2. Make it relevant. If the golden thread, connection or link isn’t made, then it won’t work.
What do you think? Do you have a great performance management system? Have you different views or essential elements you would include?
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