Is Performance Management A Process Or Strategy?

I arrived in Johannesburg on an overnight flight from Lagos on Tuesday 28 November to speak at the 3rd Annual HR Africa Summit organised by IIR South Africa BV. As the taxi driver navigated his way from Oliver R. Tambo airport to the Southern Sun hotel in Grayston, I reflected on how much poor tracking of performance has cost many organisations. The long early morning drive gave me an opportunity to process many questions such as:

a. What are the most effective communication tools in managing performance?

b. Do we engage in continuous monitoring and feedback supported by formal reviews?

c. How can HR and line managers work together to ensure the feedback is being passed on and productively received?

d. Do we communicate performance feedback at all?

e. Are organisations addressing individual needs or just fulfilling all righteousness?

f. Do we know what the individuals’ limiting factors are?

On Wednesday 29 November, I had the opportunity to present a paper titled “Are We Managing The Tools Or The Outcomes?” Performance management evokes a lot of emotions in individuals and organisations because of the implication of the outcome on individual employee and the reward elements linked to it. There are endless debates about performance management. I have met human resource practitioners who describe performance management as a process. I disagree. My favourite definition describes performance management as “a strategy which relates to every activity of the organisation set in the context of its human resource policies, culture, style and communications systems. The nature of the strategy depends on the organisational context and can vary from organisation to organisation.” This makes sense because performance management is the employee-facing arm of business strategy. My hypothesis is further validated by the quote that says “Corporate strategic goals provide the starting point for business and departmental goals, followed by agreement on performance and development, leading to the drawing up of plans between individuals and managers, with continuous monitoring and feedback supported by formal reviews.”. Therefore, setting of KPIs is a strategic process as they affect the entire operations and profitability (or otherwise) of your business.

A key part of your performance management strategy is performance feedback. Why is this important? You need an effective communication channels to ensure performance feedback is properly received and implemented. You need to ensure follow through. What are the desired outcomes? Motivate? Frustrate? Inspire? Promote commitment? Over the years, I found out that one major challenge faced by HR professionals is how to move away from the routine of filling in forms and focusing more on the individual needs.

I shared the story of my organisation, an airline that faced initial difficulty in attracting and recruiting the right people as a start-up. As the HR Director, I worked with the HR team and line managers to develop a talent resourcing strategy that helped us to successfully attract employees from eighteen countries (across 4 continents – Asia, Europe, Africa, North America). Using the performance management strategy, we became Africa’s fastest growing airline. We opened nine routes in fifteen months. We invested over ￡1.8m in employee development in twenty-one months. The end product was an energised and motivated team as we maintained our focus on nurturing talent.

Our performance management strategy started from the on-boarding/induction stage where we share the dream, talk about who we are, where we want to be, what we need to get there and the role of each team member. This is done with the full involvement of executive directors and senior managers. We talk about our belief in, and respect for each member of the team. We hold conversations with all employees about our desire to be a world class company and then ask them to reflect on four questions:

a. What does this mean to me?

b. What is my role in achieving this?

c. What’s in it for me?

d. How do we do it?

This conversation supports our “Line of Sight” objective setting. Providing a clear Line of Sight is seen as a key job of leadership. A “line of sight” means that everyone is able to describe how their current work is part of the larger vision and the organization's core strategies. Many organizations have an annual process to create goal alignment that cascades down the organization. It helps team members to have a clear and unobstructed vision. Supporting the strategy is a skill gap analysis for identifying and knowing what the individual’s limiting factors are.

Who champions the feedback process? CEO? HR? Line manager? Employee? To ensure that performance feedback is implemented, we promoted an effective line management engagement strategy led by the CEO. The C-Suite took responsibility for auditing the feedback process. We provided support (training) and tools to the line.

Our reward strategy placed emphasis on rewarding positive role models well. We tracked demonstration of effective leadership. We look for evidence of mentoring and coaching. In our career review meetings, we discuss managers who are using influence to get thing done. Line managers who showed interest and invested in the growth of their team members were rewarded better. We communicated our performance bonus structure to all employees which was as follows:

a. Achievement of Company performance: you earn 20%

b. Achievement of Departmental Performance: you earn 20%

c. Achievement of Individual Performance: you earn 60%

I concluded with four bullet points from Mike Cannell, a former CIPD Adviser - Learning, Training and Development, who said that the keys to the successful introduction and application of an effective performance management strategy are:

a. being clear about what is meant by performance

b. understanding what the organisation is and needs to be in its performance culture

c. being very focused on how individual employees will benefit and play their part in the process

d. understanding that it is a strategic lever for the leadership and its success will depend on our ability to use it effectively.

Conference over and feeling jet-lagged, I proceeded to The Grillhouse Sandton for a generous serving of medium done T-bone steak with Cabernet Sauvignon wine.