Weiss and Hartle (1997) “A process for establishing a shared understanding about what is to be achieved and how it is to be achieved, and an approach to managing people that increases the probability of achieving success” * In my experience performance management means different things the different people. In the company I currently work for performance management is thought of in the negative as being a process by which managers are able to take employees to task over bad performance and ultimately get rid of them. This may seem archaic and it is the most negative example I have come across in my work life so far, however, even in more forward thinking companies’ employees are often skeptical and suspicious of the performance management process.
Conversely I have been fortunate to see performance management at its best. For me performance management is all about taking the core goals of the organisation and ensuring that departmental, team and individuals tasks and behaviors link to and support these goals. In this way employees understand what is expected of them, why the work is important and how it links into the overall performance of the organisation. They are engaged and feel confident in their work knowing that they are contributing to the success of the company.
Performance management assists oganisations in motivating and empowering their employees by setting clear goals and rewarding them not only for what they achieve but also the way in which they achieve. In doing this organisations can focus on what is really important to the success of the business. They can recruit and retain the best employees, and motivate and develop by training and challenging the workforce. Performance management allows succession planning so that job roles can be filled with skilled, motivated, experienced employees.
Components of Performance Management
Performance management is a cyclical process involving a number different components. Goal setting is a key component of the Performance Management process. The organisation’s overall goals should start the chain and depending of the size and structure of the organization these goals. The process should start with the organisational goals which are designed to ensure the performance of the organisation leads to successful business. These goals cascade down to business areas, departments, teams and individuals. For individual employees their job description and the team’s goals will form the basis of their individual goals. It is important that they understand how their own goals link into those of the organisation, why the work they are doing is important and how it contributes to the overall success of the organisation. There must be agreement on individual goals if they are to be embraced by the individual and they must be SMART if they are to be effective.
Results Orientated (Relevant)
It is important that individuals are clear on what is expected of them, that they feel the goals can be achieved and that they that they are challenging and interesting. Key to the achievement of goals is regular communication. Communication may be formal or informal but can include updates from the individuals, feedback from colleagues, managers and clients, one to ones or team meetings. This communication is invaluable in employees on track to achieving their goals and making changes when necessary. Performance appraisals are another important component of performance management. These events are often undertaken annually and provide a formal appraisal of the individual’s competence in their role. Individuals and their managers have the opportunity to discuss, provide feedback and evidence of the individual’s achievements (against goals) and, in some organisations, the way in which those achievements were met (behaviours).
Some companies also undertake half yearly reviews or appraisals with the view to making sure that that performance stays on track between annual appraisals. This is also an opportunity to review existing goals and set new ones. Performance improvement or development planning is another part of performance management. Areas for improvement or development may be identified at any time during the performance management process but typically come out of appraisal discussions.
As with goals it is important that there is agreement on development plans and that activities to develop individuals are varied and effective. If employees are going to achieve their goals and develop their skills, knowledge and delivery within their role they must have access to the appropriate training and coaching. Whether employees require development because they do not meet their current performance requirements or in order to progress to the next level, training and coaching are also key elements within a comprehensive performance management process.
Motivation and performance Management
This relationship between motivation and performance management can be complex and individual to each employee. There are numerous motivational theories all of which have elements of authenticity to them. I have looked at two motivational theories, McGregor and Vroom. Douglas McGregor’s theory ‘details two contrasting models of workforce motivation’ ** Theory X suggests that the average person is basically lazy and don’t like work. They prefer to be told what to do and don’t want responsibility. As such there needs to be tight control of the individual and threats of loss or punishment are the best ways to motivate them. Theory Y is the opposite, assuming that most people enjoy work, that they are happy to take responsibility under the right circumstances and that they can be self-motivated to do a good job. This motivation can be enhanced when managers are able to appreciate the employee and develop their trust.
Victor Harold Vroom’s theory, to me, has links to the ‘Y Theory’, the theory suggests that factors such as personality, skills, knowledge, experience and abilities drive an individual’s performance. It proposes that employees are motivated by what they expect to receive in return for their effort and what that expected reward means to the employee. This is referred to as ‘Expectancy theory’ and links together in the following way: Expectancy: Does the individual feel the effort they put in will lead to high performance.
What is their levels of confidence in what they are capable of doing? Do they have the appropriate resources, knowledge and training to carry out their role? Instrumentality: If the individual achieves a high level of performance is there reward for their efforts and can they be sure they will receive it. Employees must be able to trust that they will. Valence: Is the reward offered/expected one that the individual values. For the reward to motivate it must have importance for the individual, be it financial, recognition, promotion and so on.
For me the key to Vroom’s theory and its success in motivating employees is that every individual is different, each has their own needs, wants, expectations and values based on the individuals frame of reference. Management must know and respect the individual and what they want.
Reward within Performance management:
I have already discussed reward in relation to motivation and how the reward on offer may need to bespoke to the individual in order to be effective. There is, however, a far wider aspect to reward with a performance management process.
Reward to attract and to motivate
Pay is usually the first thought when talking about reward in employment. It is important that a realistic but attractive salary is offered initially when recruiting new employees. Pay continues to be important for most individuals throughout their employment, however it is not the only way in way employees can be rewarded. Within my current organization pay is only increased annually, across the board, which has little to do with performance except for acknowledging that employees are rewarded for working for the company in line with cost of living rises. Currently there is no performance management process within my organization other than dealing with poor performance in a ‘theory X’ style, employees are serviced with a notice of improvement linked to termination of their contact.
Outside of the annual pay increase financial reward is only given if a good employee threatens to leave. Practice is known to all employees via the grapevine and acts to demotivates those who don’t wish to take this approach. I have, however, worked within another organization where annual increases were calculated on performance throughout the year based on a truly robust appraisal system. Engaged and motivated employees were encouraged to collect factual evidence of their achievements and to present and rate this evidence at their appraisal. Ratings were discussed and agreed and then, then to ensure fairness, underwent cross calibration at departmental level. Employees felt they were treated fairly and rewarded not just for their efforts over the year but for their ownership of managing their own performance.
Another type of reward for performance, which is being rolled out currently by my employer, is to provide opportunity for high performing individuals to their knowledge of the business through a shadowing scheme. This has raised employee’s morale as they feel they will be able to perform more effectively and this could, in turn, lead to better opportunities and perhaps promotion. It has also encouraged other individuals to improve their performance in order to be able participate in the scheme. As I have discussed an employee’ perception of the value of reward will vary from one to another. values The need to provide a variety of rewards in line with employee’s expectations and personal preference is supported in the concept of Total Reward schemes. These scheme look at all the rewards and benefits that are or could be provided to employees
environment, including job design and the physical workspace.
*Management and Motivation, Vroom, V.H., Deci, E.L., Penguin 1983 (first published 1970) ** Wikipedia
3 x components of total reward system 1 of which should b non financial
Weiss and Hartle (1997)
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