Performance Management systems promote organizational success. When employees understand how their work supports the overall business strategy, they are more engaged, motivated and productive. A good performance management program can align the work and goals of employees with the goals of the organization.

Companies implement Performance Management to:

• Improve work performance
• Administer merit pay
• Advise employees of merit pay
• Counsel employees
• Make promotion decisions
• Motivate employees
• Assess employee potential
• Identify training needs
• Better work relationships
• Helping employees set career goals

Definition

Performance Management is an on-going communication process that has a shared responsibility between the performance manager and the employee in:

• Identifying and describing essential job functions and relating them to the mission and goals of the organization
• Developing realistic and appropriate performance expectations
• Planning education and development opportunities to improve and build on employee work performance
• Assessing individual performance and coaching or receiving feedback about performance
• Writing and communicating performance appraisals
• Rewarding for competent and extraordinary performance

Objective

Performance management accomplishes these key components in the context of the immediate objectives of the department and the overall objectives of the organization. The performance management process systematically executes these activities throughout the performance cycle (quarterly, bi-annual or annual). The objective of Performance Management process is:

• To provide an opportunity for the employee and the performance manager to discuss development goals and jointly create a plan for achieving those goals.
• Development plans should contribute to organizational goals and the professional growth of the employee.
• Many organizations have enunciated mission statements, business strategies, core values, or driving forces that top management would like to communicate to its employees. Management would also like to have line managers, supervisors, and employees bring their principals to life by incorporating them into everyday activities on the job.

A well-executed performance management system can cascade those strategies, values and intentions down through the organizational hierarchy, so that each employee knows what they are and knows how his or her tasks, objectives, or responsibilities fit into the big picture. This process also makes clear that each employee is accountable for how things are done as well what is done.

Process Considerations

If your organization implements a PMP, this is the suggested performance management process:

1. The organization sets objectives – division sets objectives, departments set objectives.
2. Reviewer and individual independently draft personal objectives for new performance cycle aligned with division and department objectives.
3. Reviewer and individual meet to discuss: objectives and expectations for new cycle, timing of informal mid-cycle reviews.
4. Throughout Performance Cycle, use multi-source feedback (if available).
5. On-going monitoring/discussion/dialogue/guidance/revision of targets/goals/objectives and formal meetings.
6. End of Performance Cycle:
7. Reviewer and individual prepare performance cycle assessment and exchange prior to year-end meeting. Reviewer collects feedback.
8. Reviewer and individual meet to discuss performance, development and training needs.
9. Signature on final assessment. Overall ratings to be used for incentive payout – competency assessment and objective.
10. Pay discussion.

EMEND helps organization’s develop a Performance Management Program (PMP) by:

1. Assess the current state of the PMP.
2. Interview/meet with key constituents: clarify and develop new PMP objectives.
3. Ensure alignment with business objectives and core competencies; and integration to HR programs.
4. Design a new PMP (process and tools).
5. Determine pay for performance link (link to incentive pay).
6. Pilot test the new PMP.
7. Implement/transition to the new PMP.
8. Educate and communicate the new PMP.
9. Monitor the success of the new PMP.

There are six factors that contribute to a highly effective Performance Management System:

1. Business strategy
2. Process for change
3. Pay-for-performance
4. Development
5. Involvement
6. Measurement and alignment

EMEND establishes Performance Management Systems that are aligned with an organization’s business strategy. We ensure goals are linked closely to the business strategy and that they are cascaded from the top. EMEND uses organizational goals in setting up the Performance Management process.

EMEND also ensure that Performance Management measures and processes are integrated with other HR programs such as succession planning, talent management and career management. We use performance management as a business tool to:

• Help senior management take a visible role in program design and implementation.
• Help senior managers and HR agree on the goals of the new system.
• Implement methods that fit the organization’s culture and readiness for change.
• Give managers across the organization standardized performance measures.
• Strengthen overall business strategy and specific organizational goals.

Once a Performance Management Systems are in place, various levels in the organization have shared performance management responsibility:

Manager

• Motivates
• Observes and documents
• Updates and revises plans
• Gives feedback and coaches
• Develops
• Reinforces and communicates

Individual

• Commits to goals
• Solicits feedback
• Communicates
• Collects performance data
• Creates plans
• Monitors success.

There are several Performance Management factors an organization needs to keep in mind:

• Competencies: knowledge, skills, attitudes, behaviours
• Environmental factors
• Organization values and principals.

Timeframe:
Informally: daily
Formally: quarterly, bi-annually, annually

Competencies

Definition:

• Competencies are the skills, knowledge, abilities and behaviours that predict superior performance.
• Competencies are a popular and crucial element of successful business strategies.
• Competency-based systems – where organizations define, measure, develop and reward employees for a combination of skills, behaviour, knowledge and results.
• Core competencies – groups of interrelated competencies (skills, knowledge, behaviours, motives) required by the employees which a) are focal points for achieving superior performance, b) are essential to the organization’s ongoing success, and c) predict outstanding performance
• Are generic enough to apply to all employees in the organization; and
• Are aligned with organizational business strategies.
• Non-core competencies – competencies (skills, knowledge, behaviours, motives) required by the employees which a) are derived from core competencies, b) align with and distinguish superior performance at the division, employee group, job family and/or job level, and c) may be different for different divisions, employee groups, job families and/or job levels.
• Behavioural indicators – statements outlining specific actions which a) characterize a competency, and b) describe elements of superior performance.

Objectives:

• Competencies provide the link between business strategy and human resources.
• The real power of competencies is found in the application.
• A competency model alone will do little to achieve business objectives.
• All competencies models are not equally well suited for all applications.
• Competencies are business related and strategic.
• Differences between levels can be readily distinguished.
• Behaviours are observable and measurable.
• Competencies support a number of HR applications.
• Competencies describe behaviours that contribute to the strategic imperatives and business goals.
• Competency-based objectives should assist in achieving the results-based objectives.