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Performance management systems are in operation in most companies. They are described as a way of maximising individual employee performance to achieve the goals of the organisation. Most senior managers I speak to see them as a way of improving employee morale with all of the associated benefits that come with this.

In most organisations, performance management generally consists of agreeing goals between a manager or supervisor and the direct report. These are recorded, reviewed and actions are agreed to meet the goals.

In practice, however, there are few things that managers and supervisors struggle more with in their day-to-day duties. The worst thing is that, in spite of this, most companies let their performance management systems run and run, not aware of the damage that they can create.

Hare are some of the things that happen:

  • Objectives for the forthcoming year are generally imposed and may often be unrealistic or out of the control of the staff member
  • Managers, supervisors and staff are often poorly briefed in how the performance management system is supposed to work
  • While meeting structures are put in place to review objectives, these are often the first thing to be cancelled when pressures of work dictate
  • The yearly performance appraisal is based on events over the last few weeks and not the year
  • If a rating is given as part of this process, the results are often influenced by how the parties get on
  • The final appraisal often involves completing complicated documentation that serves little purpose. All parties, except the Human Resource department, see this as an end in itself and a major achievement when the documentation is complete and signed.

For a staff member, there aren’t many things as personal as appraisals about their own performance at work. The chances of de-motivating staff members, if the performance management processes aren’t effective, are high.

It gets worse if there is a pay rise or bonus that is determined by the process, particularly if the achievement of an objective has been hit by a reason outside the staff member’s control. For example, an unexpected decrease in base rate would impact on my branch profit when I worked for a large clearing bank, as income would reduce.

So, if a senior manager is thinking about designing, implementing or improving a performance management system, here are some points to consider:

  • Staff should have input into the design of the system and accept its fairness
  • Where possible there should be a combination of individual and team goals for staff members to work to
  • The system should be as simple as possible and fully communicated to staff
  • There should be an element of 360 degree feedback
  • Any personal development objectives agreed should have a realistic chance of being fulfilled and a clear action plan on how they are going to happen. All too often such objectives are agreed and nothing subsequently happens
  • There should be consistency in the way the system is applied across the company and checks and balances to make sure this happens
  • The system should be regularly reviewed to make sure weak areas are corrected. Staff members should play a part in this review process.

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