The beginner’s guide to Performance Management: from challenges & priorities to tips & solutions

To begin with performance management is not something new. In fact it’s a process that has been prevailing for decades from a personal context to an organisational context. Even though this has been ongoing for a long period of time, many find it unsuccessful to master the simple techniques behind it.

The aim of most organisations is to ensure they optimise their abilities to have clear and objective decision making. Hence 4 priority areas can be identified that need focus when it comes to performance management.

1.Measurement:

Many organisations struggle with identifying the “right” mix of measures for their purpose. This can be filtered down to the following reasons.

• Incorporating non-financial measures into organisational performance measures.
• Establishing a performance culture.
• Identifying the right mix of leading, in-process, lagging measures.
• Utilising consistent performance measures throughout the organisation.
• Determining the right number of performance measures.
• Ensuring performance measures need to be relevant to what they are trying to measure.

 Tips and solutions:

The first step for achieving effective performance management is identifying which measures are strategically aligned and relevant. To accomplish this, organisations need to balance their measures between strategic outcomes, financial, and customer- and employee-focused measures.

Best-practice organisations use an array of communication and engagement tactics to build a performance culture and tap into the expertise of their employees to pick the right measures.

2.Strategic planning:

Organisations tend to cite challenges throughout the strategic planning process, from picking the right mix of objectives to measurement and implementation.

• Balancing long-term and short-term goals.
• Measuring the success of strategic objectives.
• Identifying, prioritising and addressing the needs of key internal stakeholders from heads of functions, business units and geographies.
• Aligning division-level strategies with corporate objectives.
• Addressing risk aversion within the organisation.

 Tips and solutions:

Best-practice organisations use a mix of behavioral and performance measures to track success; this helps monitor and improve the efficacy of new initiatives and programs and ensure new behavior adoption.

They also ensure an environment where employees are comfortable with risk, fail fast, and learn from mistakes. Innovation and agility requires supporting the idea that employees should complete a task quickly, make a decision, and move on.

3.Data and analytics:

Though data and analytics are now a pervasive part of most organisations, they continue to struggle with embedding it in their decision making. This involves:

• Establishing a culture of data-based decision making.
• Establishing a roadmap on how analytics is to be used.
• Combining business acumen with statistical analysis to provide meaningful insights.
• Aggregating analysis into a dashboard to support decision making.
• Developing clear goals for measuring the success of projects.

 Tips and solutions:

Best-practice organisations use a broad mix of change management engagement techniques and service offerings to demystify analytics and actively engage decision makers throughout the organisation.

Organisations that combine an iterative analytics process with project teams that include business, statistical, and data management expertise are able to effectively combine business acumen with statistical analysis for meaningful insights.

4.Bench-marking:

Most organisations struggle with finding the right bench marking sources for both practice and performance comparison.

• Identifying the right benchmarks and their sources.
• Finding best-practice organisations to compare to your organisation.
• Identifying valid data for performance bench-marking.
• Planning and scoping bench-marking activities.
• Guiding how benchmarks are used to support decision making.

Tips and solutions:

The first step to clearly identifying the right benchmarks and their sources is to clearly understand and articulate the performance gaps the organisation wants to close.

The second step is to compare your performance measures with norms either in trusted benchmarking databases.

There are several ways organisations can identify potential best-practice partners including success stories or case studies in publications, suggestions from peers, and through participation in associations and organisations.