The Right Performance Management System Is...?
Defining, measuring and evaluating performance is a critical responsibility of those in roles that involve managing people.?If employees do not think their performance is accurately and fairly appraised, they are likely to experience dissatisfaction. When performance is linked to pay a lack of faith in the performance management system can also create pay dissatisfaction. ?
Motivating Performance
There are four pre-requisites for motivating performance.?
These four pre-requisites must be met if the motivation to perform will exist.?Expectancy, equity and reinforcement theory are the principal motivation theories supported by research and support this requirement.
Effective System Design
Systems that are designed to manage performance must fit the culture of the organization and of the workforce. Organizations must find a way to define performance in a manner that is acceptable to employees and that also is consistent with management philosophy.?
The optimal approach is to measure and reward performance at all levels.?Organizations need individual employees to perform well, but they also need employees to perform in a manner that contributes to both group/unit and organizational performance.?
The level of expectations will be influenced by the culture. Some organizations define minimally acceptable performance at a level that would be considered excellent by others. Although lofty performance standards may encourage maximum effort there must be acceptance by employees that they are realistic. There must also be equivalence in expectations within an organization, across evaluators.?
Performance management systems must fit the economic realities the organization faces. Expecting an undercapitalized organization in a highly competitive industry to outperform all others is unrealistic. Some would argue that expecting the unlikely will make it come true. But that might result in employee skepticism about how realistic the expectations are and cause them to resign themselves to not meeting them. Research on goal setting has found that difficult goals will encourage more effort but that once they become so difficult that meeting them becomes highly unlikely, they cease to provide motivation and instead promote resignation to failure.?
It is important to only hold employees accountable for things they can influence. A Customer Service Representative who gathers the relevant information, correctly applies policy and treats the customer respectfully has behaved well, which is all that the person can control.?Whether or not the customer is satisfied will depend a good deal on how reasonable the customer is.?
There must be trust in management if systems are to be effective. One of the pre-requisites for motivation to perform cited earlier is that employees must want to do what is expected. But if there is a suspicion that excellent performance will result in staff reductions or endless raising of expectations employees may not be motivated to produce results.?When “good things” are promised in return for meeting expectations what happened in the past will determine if the promise is to be believable.?
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The performance management process must be defined in a manner that includes performance planning, performance measurement and performance evaluation. This can ensure each employee knows what is expected and that those expectations are continuously evaluated to ensure they are still relevant. Continuous measurement must occur, and feedback must be provided so that individuals know how they are doing and what might be done to improve performance.?If both the evaluator and the employee are expected to agree on what happened during the performance period, there must be a reference available that avoids reliance on memories. Creating and maintaining a continuous performance record is a tool for enabling a record to be created. Electronically capturing events allows both parties to agree on an assessment of what happened and makes performance appraisal a review of what has already been resolved.
Expecting the evaluator and the employee to agree on what happened during the year by recreating the year from memory is delusional. Cognitive bias causes us to attribute good results to our efforts and poor results to uncontrollable external causes. It also causes us to believe we are better performers tan we are. Finally, it causes us to more readily accept information that is positive and consistent with what we believe. The impact of cognitive bias will be that the evaluator and the employee will come to the year-end meeting remembering two different versions of what happened... which is likely to be dysfunctional.
At designated times performance is appraised and linked to administrative consequences. And results must be attributed to their causes, so that development plans can be fashioned to capitalize on strengths and remedy any deficiencies. The last step in the cycle becomes the first step of the next cycle… definition of future expectations.
Evaluating System Effectiveness
Performance management systems must produce the results required to be effective. This will depend on whether there is a good fit of the system to the environment, the soundness of the design of the administrative system and how well managers and employees played the roles necessary for success.?
It must be recognized that employee perceptions are their reality.?If they feel their performance has been evaluated inaccurately and/or inequitably they will be dissatisfied. Even if they are incorrect that is what they act upon. As a result, perceptions must be measured when evaluating the system.
Conclusion
Performance management systems and processes must fit the organizational context and must be viewed as equitable and appropriate by all parties at interest.?Evaluating them should be a continuous process, since system effectiveness will be impacted by changes in the context within which they operate. When things change systems might have to change. Processes may have to be designed differently, or they may have to be done more effectively. Continuous evaluation will help determine what, if anything, needs to be done.
About the Author:?Robert Greene, PhD, is CEO at Reward $ystems, Inc., a Consulting Principal at Pontifex and a faculty member for DePaul University in their MSHR and MBA programs. Greene?speaks and teaches globally?on human resource management. His consulting practice is focused on helping organizations succeed through people. Greene has written 4 books and hundreds of articles about human resource management throughout his career.
CHRBP, Head of Human Resources, Change Management
1 年Very good insights. I must also add that through continuous feedback, realistic targets, support from the top leadership as well as keeping the promise of what is it in for the individuals (WIFI) will do a great deal in ensuring that the Performance management System works.