Performance Management: Beyond Hard Approach

What do come up to your mind when you are being asked what is performance management system? Is it limited to the numbers, hard facts of your performance achievement vs target which will impact your salary, bonuses, and promotion? Is that really true?

The limited view of performance management system typically only focuses with the starting and ending. It starts with performance planning which is done in the beginning of fiscal year to understand what are the objectives that employees need to achieve. Later at the end of fiscal year, during the reviewing phase, those objectives will then be compared with actual achievement, whether it is above, on, or under target. As a consequence, employees will get the reward based on their achievement which might impact their salary, bonuses, or promotion.

Unfortunately, the true essence of performance management disappears in that view. As the name suggest, ‘performance’ and ‘management’, are you sure that you will be able to manage the performance by only looking at the beginning and ending of your employee’s performance?

Since more often than not it is less likely, therefore, the question remains on how we would be able to manage performance using this HR tool? The answer lies on two main missing elements which are Communication and Coaching.

Coaching happens in between the planning and reviewing phase, which many people usually blame ‘lack of time’ as the main reason why this does not happen. Many managers are being given a stretch target from their bosses. Subsequently, they expect that their subordinates would be able to finish the tasks those are being given while they themselves are occupied on achieving their other objectives. However, they tend to forget that without clear direction and coaching, very often their subordinates are ended doing the tasks below their initial expectation. As a result, they need to redo the task which might consume more time rather than they invest their time in advanced to do proper coaching to avoid the issue happens at the first place.

This is when communication comes into play. Usually lots of issues in the organization happen because there are misalignments between the boss and subordinates. While both over and under communication are not ideal in the organization but over communication tends to have less negative impacts than under communication. The worst thing might happen from over communication is the boss would be overwhelm with information overload. However, the worst thing from under communication might result in the boss made completely wrong decision because he/she does not get enough information on hand.

Therefore, it is important to always communicate, communicate, and communicate. Communication needs to happen in every phase of performance management. Starting with planning phase, it is important to ensure how do employee objectives actually relate with company objectives and how does their performance have impact to the success of the company. This is also important to build the sense of ownership and employees engagement.

On the coaching phase, communication plays a greater role to ensure that both the boss and subordinates have the same understanding that they are on the same page. Their boss could benefit from the facts that he is aware on the project status update and whether what have been done by their subordinates are actually on track with achieving the company’s objectives. On the other hand, the subordinates could benefit from the facts that they are able to have open discussion with their boss regarding the hurdles, challenges, and possible solutions to resolve any anticipated issues. However, giving feedback is like double edge sword, especially with organization without open communication culture. Therefore, it is also very important to be aware on how we can give a good feedback as I wrote in my previous article.

Furthermore, this would create more trust in the organization since employees would feel that their boss also has concern on how they can perform well during the fiscal year. This would also lessen the surprise effect for yearly performance appraisal because they have clear understanding on how well (or badly) they perform compare with their set objectives. As a result, communication plays an important role during reviewing phase to ensure that employee understands on how they get their performance appraisal objectively, no matter whether it is positive or negative appraisal.

Lastly, we could also set our reward program to communicate what kind of behavior that we are expecting from high performer by combining monetary and non-monetary reward system which both have their own merits and therefore it is important to have the right combination.

To conclude, below are the main considerations to have more effective performance management system:

• Performance management goes way beyond hard approach (numbers). On the contrary, soft approach (communication) plays an important role in managing performance.
• Regular coaching that happens between planning and reviewing phase is very important to ensure that both the boss and subordinates understand that they are on the same page.
• Communication needs to be happened in each distinct phase of performance management: planning, coaching, reviewing, and rewarding.

As reflection points, you could evaluate on how currently performance management system happens in your organization (on a scale 1-10):

• How much do you think performance management system in your organization have an impact on your performance?
• How much do you clearly understand on the objectives that you need to achieve for the fiscal year?
• How much do you rate the coaching culture in your organization, both quality (i.e. depth of discussion) and quantity (i.e. coaching frequency)?
• How often do you not get any surprised during performance appraisal because you understand that you get what you deserved based on your achievement?
• How much do you rate open communication culture (discussion and providing feedback) happens throughout your organization?

If your answer for above questions on average are greater than 7, most likely that you have a good performance management system in place. Otherwise, you need to think in what aspects that it needs to be improved and provide suggestions to your company.

For further discussion, please feel free to contact me at [email protected] or providing comments below.