Performance management is a critical business process, yet in many companies, it is an ineffective management tool. By striking a balance among committed leadership, effective program design and planned execution, companies can leverage performance management to achieve company goals. 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:
- Target critical talent for development and retention
- Execute strategy by prioritizing and aligning goals and objectives
- Improve group and individual performance
- Make pay decisions based on performance and desired results
- Identify top performers to develop a succession plan
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 versus a process — only happens once or twice a year
- Separation from, or conflict with, other talent management processes
Sibson works with clients to implement 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 both the unit and the organization.
- Leaders, managers and employees understand the process and their responsibilities.
- Communication occurs regularly, and feedback is aligned with rewards and consequences.