3 Performance Management Basics for Managers

Performance Management Basics

Do Not Underestimate the Performance Management Basics
Getting the performance management basics right matters.  Unfortunately, too many managers struggle to follow the tenets of effective performance management.

Employee Expectations Have Shifted
To add to the challenge, old school performance management basics regarding processes and performance reviews are struggling to align with today’s fast moving organizations and employees who have different expectations.

  • For example, my old employer, Accenture, is replacing annual evaluations and rankings with more timely and personalized feedback for all employees.
  • The same can be said of companies like GE, Goldman Sachs, Microsoft, Morgan Stanley, Adobe and the GAP.

Both Managers and Employees Want Something Better
It is clear that both employees and managers want something better.  Our annual Best Places to Work employee engagement surveys find that less than 50 percent of employees report their managers provide relevant and valuable input, and most managers we interview find the performance review process to be a monumental waste of time.

The Five Drivers of Performance Management Basics
But performance reviews are designed to do five important performance management basics that are directly correlated to higher performance and greater levels of employee engagement:

  1. Monitor performance
  2. Create accountability
  3. Develop skills and careers
  4. Reward high performance
  5. Act upon substandard performance

The Five Drivers Are Difficult to Accomplish without a Performance Management Process
While we can appreciate managers wanting to reduce administrative overhead and employees wanting a better way to receive feedback, we think that companies who ditch performance reviews will struggle across the five performance management basics listed above.

More specifically, we believe that managers will struggle to provide clear, timely and accurate performance feedback that they need to lead their teams to higher levels of performance and employee engagement.

Three Questions that Must Be Answered with or without Performance Reviews
Regardless of whether you use annual performance reviews or not, managers and employees must be able to measure progress, allocate resources and adjust strategies and tactics accordingly.  A first step in effective performance management basics is to make sure managers and employees can answer three questions related to the basics of basics of effective performance management:

  1. Do your team members know what you expect of them and how their performance is measured?
  2. How is excellence rewarded?
  3. How are under-performers handled?

Three Performance Management Basics for Managers
The cartoon characters above are clearly at odds. To extract the best performance from your team there are a few performance management basics from decades of performance management training that must be followed:

1.  Set Clear Performance Performance Expectations
There should be no confusion about the standards of success and failure for each and every job.  To get it right, make sure that the success metrics are relevant, consistent, fair, just possible, accurate and timely.  To get this right, have people design their metrics with you.

2.  Ensure Transparent Performance Measures
Goals and success metrics for performance should be visible to all.  Transparent objectives and performance metrics increase awareness and accountability while allowing everyone to assess progress against important initiatives and learn from what is working and what is not working.

3.  Establish Meaningful Rewards and Consequences Upfront
In high performance cultures, superior performance gets superior rewards; inferior performance gets consequences.  Done right, effective rewards and consequences motivate people to move toward the things (actions, behaviors, assumptions) you want and away from things you do not want.

This last “basic” regarding negative consequences is perhaps the hardest for managers to follow when they have a poor performer on their team.  It is difficult for someone who wants to be “nice” to enforce consequences and to give negative feedback. But you must learn to do so if you want to keep your high performers motivated and engaged.

The Bottom Line
When it comes to the performance management basics, be supportive, be encouraging and be honest. If someone is not measuring up, they will eventually drag down the entire team. It is your responsibility to require improvement or move them on in a reasonable time period.

To learn more about performance management basics for managers, download 3 Must-Have Ingredients of High Performing Teams for New Managers

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