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Effective Performance Management
Leveraging Performance Management
Performance management is a critical business process, yet in many companies, it is an ineffective management tool. By striking a balance between committed leadership, effective program design and planned execution, companies can leverage performance management to help drive company results. Our experience indicates that top-performing companies execute performance management effectively and use it to achieve their strategic objectives and improve operational results.
Effective Performance Management helps organizations…
- Execute strategy by prioritizing and aligning goals and objectives
- Improve group and individual performance
- Make pay decisions based upon performance and desired results
- Identify top performers to inform succession planning
- Target critical talent for development and retention
Symptoms of an ineffective process may include:
- Irrelevance – does not reflect "how we operate"
- Narrow focus – only affects pay decisions
- Resistance – managers hate doing it; employees resist it
- High effort for low return – a lot of time spent filling out forms
- An event vs. a process – only happens once or twice a year
- Separation from, or conflict with, other talent management processes
Elements of Effective Performance Management
The key to success is to improve and integrate the role of leadership, alignment of goals, simplified processes and clear communications.
Sibson works with clients to implement the critical success factors that ensure effective performance management. The top four are:
- Executives model a high performance culture and use the process at the top.
- Individual expectations are aligned with the goals and objectives of the unit and the organization.
- The process is clear, and responsibilities are understood by leaders, managers and employees.
- Communication occurs regularly, and feedback is aligned with rewards and consequences.
In 2007 Sibson and WorldatWork completed a study of more than 500 organizations on the state of performance management. This study found that top performing companies (based on total return to shareholders) have much more effective performance management.
Click here to read more about the study or order a copy of the study report