Performance Management - Making Appraisals Work

I once saw a quote in a book by Tom Clancy, called "Net Force" (Published by Headline Book Publishing, a Division of Hodder Headline PLC, ISBN 0 7472 6040 0). The quote read:

"Remember the Rule of the 5Ps
- Proper Planning Prevents Poor Performance"

I could not agree more! (Actually the quote was the 6Ps - I left out the four-letter expletive that went before the word 'poor'!) In my view, the essence of the a good performance management system revolves around planning - in this case individual performance planning, derived from organisational planning. When this model is followed, not only will planned business goals be more effectively achieved, individuals will be more motivated, as they know with greater clarity than ever before, exactly what is expected of them, and what their part has been in the company's success. Organisations that are better able to reward good performances, are planning for their future success.

The Performance Management System (PMS) which I have designed for a number of companies here, has two distinct parts A and B, and is the means by which individual managerial or supervisory performance is linked to an organisation’s business objectives and operating plans (Part A) and to the organisation’s future through assessing the potential of each managerial or executive level employee(Part B). For any company to be successful every Manager must establish and agree precise, measurable and objective standards and goals for individual performance that will in turn lead to improved performance by the company as a whole.

This Performance Management System (and its sister system, covering clerical and operator level employees), is put together after many years of experience with performance management, both as a Corporate Human Resource Manager and as a Consultant. Our aim is to provide our clients with all the company needs to introduce a simple, but effective system of measuring and rewarding employee performances.

The Aims of PMS
· PMS aims to make every managerial and supervisory level employee completely aware of the company's business plans, and through the cascading of those plans to individuals, provide them with the motivation to achieve, and then, the ownership of success
· PMS is concerned with improvement - organisationally through increased contribution by each individual and personally through the broadening of experience and career opportunities.
· It aims to make the appraisal of Managers and Supervisors as fair as possible and less subjective, by focusing on planning, performance, priorities and key result areas.
· It seeks to provide rigorous and current information about an executive in order to activate appropriate training and development opportunities and to facilitate career progression.

The Role of PMS

PMS is central not only to a need to develop, train and motivate employees, but also to its continued business success. It provides a structure to focus the resources and activities of all Managers on achieving the company's major business objectives. PMS is the basis for assessment of performance, ability and potential and an essential source of data on employees for manpower and succession planning purposes.

Completion of Parts A and B are separated in time by six months. When the two quite different objectives of each part are separated in time, experience of many major companies has been that far more effective attention is given to the assessment of individuals’ potential, development and training needs.

However, if a company so chooses, there is nothing to prevent them carrying out Parts A and B at the same time, say both at the end of the year. But we do urge such companies to hold two separate discussions between Appraiser and Appraisee, in order that sufficient focus is directed to the employee's longer-term potential and training and development needs.

There is so much that can be said and written about performance appraisals, and I'll let this suffice for now, but will return to the topic again in the future.

Are you being served?

It is said that the only thing which separates your company from the competition, is the quality of the service you provide.

We’ve all got plenty of examples of the poor service we’ve received, but sadly, perhaps fewer of the good. I want to concentrate on the good, and to examine some of the reasons why.

Let me give you one or two examples from my personal experience.

Take the case of the guy who services my car. Not only does he charge a fair price, he also picks up the car from my office in the morning and delivers it back in the evening. As a result I have often recommended him to many of my friends.

Or the case of the lady who runs my local mini-market (corner shop). I regularly stop there to buy the odds and ends which I might have run out of, prior to the weekly shop at the market. A few weeks ago I was in there buying a few cans of beer. I'm not too fussy about brands, and although I might usually buy a particular one, she said to me on checking out that why don't I take another brand as they are on offer at present, and I hadn't noticed. She didn't need to do this, as I was now buying something which gave her less revenue. But she did, and as a result, more often than not now, I will buy from her rather than from the supermarket, even if it might be easier when I'm getting all the rest of the shopping.

And how about my newspaper vendor, from whom I buy my newspaper most mornings. One morning a few weeks ago I was later than usual and there was only one left. I commented how lucky I was. He replied that it wasn't lucky, because he had saved it for me. I had never asked him to do that, but do it he did.

Notice a theme here? All of these positive cases I've mentioned have one common factor - they are running their own businesses, however small they may be, and perhaps therein lies one of the answers to the reasons why we seem to get better service from small, owner-run businesses. Could it be that they recognise that they get their income from us, their customers, and we have a choice - to use them, or their competitors. Employees of much larger organisations may not have this same level of enlightenment.

But I would not place the blame on them. I would place it firmly with the owners of the businesses who have failed to provide their people with the right motivation. In my opinion, it's not their training that is lacking, either in substance or quality, it's a far greater problem one which will not be solved until businesses which employ large numbers of people, recognise the critical importance of what I term intrinsic motivation.

Everyone, without fail, is (inherently) positively motivated by something. It might be money, a pleasant working environment, performance-based incentives, share options, longer holidays or whatever. It doesn't matter what it is, employers need to find out from their employees and then act upon it. Of course, you're never going to be able to please (motivate) all of the people all of the time. However, as long as an employer manages to feed the intrinsic motivation of the majority of his employees, he'll find a marked increase in customer satisfaction, which will ultimately turn into increased profitability.

Another facet of life working in a small companies (eg less than 10 people), is that you really do feel a part of the organisation, and not merely someone who needs an ID tag around their neck so the company’s security people knows who they are. There are less than 10 in my consultancy (dozens more of course in our network of associates), and I am proud to tell you that they all not only know our company’s goals, short and long term , they are also intrinsically motivated to want to succeed. They know that if the company succeeds it’s because of them, and that the result will be the reward they KNOW they’ll want. And it isn’t just money.

Large companies CAN do this too, and I know of one from personal experience. They are one of the world’s largest international banks and I worked for them for some 28 years, in London, Hong Kong and Malaysia. In each location they strived hard to keep people as informed as possible about the company’s goals and its performance against those targets. OK, as this can be market sensitive information, it had to be cloaked in terms which related to percentage increases and so on rather than exact figures, except of course, where this was public information anyway.

People are far better self-motivated when they have a clear picture of how their own performance has contributed to the company’s. Hopefully too, this will be reflected in their performance appraisal – but that’s a topic for another time.