Understanding the Performance Management Process

The importance of  Team Leaders communicating to employees throughout the Performance Review cycle with clarity and ensuring mutual understanding was emphasized in Salary.com's 2006 Performance Review Survey.

The survey showed significant gaps between employer and employee views on performance management. For example:

• 82% of managers believe they provide clear goals to their employees prior to their formal performance review, but only 46% of employees say the same
• 83% of employers say that they include the input of their employees in the review process but only 43 % of employees feel their input is valued and included
• Nearly half of the 2,000 employees surveyed said their performance has at some time been reviewed against goals that were not previously communicated

These disconnects show poor communication between the Team Leader and the employee. They also emphasize the importance of establishing clear goals that are understood by both Team Leader and employee to ensure agreement and commitment.

In order for the performance management process to be efficient and effective, Team Leaders must understand and master the Performance Management process and apply it consistently.

 Performance Appraisal vs. Performance Management?

Performance appraisal properly describes a process of judging past performance and not measuring that performance against clear and agreed objectives. Performance Management on the other hand shifts the focus away from just an annual event to an on-going process. 

According to A Handbook for Measuring Employee Performance, performance management is the systematic process of

• planning work and setting expectations
• continually monitoring performance
• developing the capacity to perform
• periodically rating performance in a summary fashion
• rewarding good performance

Planning. The Team Leader should meet with employees to create their performance plans. The Team Leader should establish measurable goals that align to the Organizations’ strategic and operational plans and consult with his/her employees when creating these goals. It is in this planning stage that the Team Leader has an opportunity to explain to employees how their performance directly impacts how the Organization and Business Unit will achieve their goals.

Monitoring. The Team Leader should monitor employee progress, not only when there is a progress review due, but on a continuous basis throughout the appraisal period. Monitoring gives the Team Leader an opportunity to make a course correction or adjust a timeline if it is needed so that employees will produce the desired outcome of successfully achieving the Organizations’ or Business Unit's goals. It also provides the opportunity for the Team Leader to make employees aware of their progress, whether favorable or unacceptable. Should the Team Leader determine the employee has unacceptable performance on any critical element, monitoring performance enables the Team Leader to identify the problem early and get an opportunity period in place well before the rating of record is due.

Developing. The Team Leader should be able to determine from continuous monitoring whether employees need additional development to achieve their assigned responsibilities. It is important to remember that employee development includes not only remediation but enhancing good performance as well. Types of development could include  formal training (classroom); informal training (online); coaching or mentoring; new work assignments (additional responsibilities); etc

Rating. The Team Leader will use the knowledge gained from monitoring the employee's performance during the appraisal period to compare that performance against the employee's elements and standards and assign a rating of record. The final rating should not be a surprise to the employee, particularly when the Team Leader and the employee have had numerous performance discussions during the rating period.

 Rewarding. The Team Leader must make meaningful distinctions when granting awards. Award amounts should be clearly distinguishable between different performance levels that are fully successful or above. Performance management should support compensation decisions.

Every Organization has policies that govern performance management that are unique to the particular Organization. Team Leaders must, in addition to mastering and consistently applying good planning, monitoring, developing, rating, and rewarding practices, learn and apply those policies as they relate to the Organization-specific practices of performance management.

Recently I came across some news that as from September, 2015 one of the largest companies in the world will discontinue their annual performance review process http://www.washingtonpost.com/news/on-leadership/wp/2015/07/21/in-big-move-accenture-will-get-rid-of-annual-performance-reviews-and-rankings/

Is this a move in the right direction? You be the judge