Performance Management

By Chris Chittenden

Many organisations have introduced performance management systems and many of those systems have failed to deliver. Why is this? Our observations are that these systems are not set up to succeed. When implemented, these systems often tend to provide a systemic approach to managing performance but often do not consider the human issues involved in making it work effectively. By and large, this is the reason that many good theoretical management systems fail - they ignore the vagaries of human element and assume that people will act in a certain way. Our experience is that people act in many different ways and hence the systems are not as effective as they could be. We argue that most managers need to be better equipped with conversational competences to improve this situation.

In another article, we spoke about what we term "action conversations".

An action conversation is broken into four distinct phases: (1) setting the context and making a request or offer, (2) negotiating, (3) managing the promise and (4) assessing the outcome. This conversational map applies to all situations, big and small, where a request or offer is made by one person to another. We see performance management in this light. Using a performance management system, the organisation makes certain requests of an individual, who negotiates what they can and cannot achieve and makes commitments to their employer. The employee should then carry out the actions required to fulfil their promise and have their performance assessed. We believe there are a number of substantial improvements that can come about by making action conversations the foundation of your performance management system.

As it can be applied within a workgroup to all activity that requires coordination of action between people, it can become a framework for a way of doing things. If people are effective at making and managing their commitments on a day to day basis, it becomes much easier to translate this behaviour into larger commitments, such as performance management. The conversations needed are the same, they just occur in a different context. In other words, your performance management system, rather than being something that people deal with every six or twelve months, becomes a part of their daily activities.

It is also our experience that many of the outcomes established when defining future satisfactory performance tend to be reasonably nebulous when being discussed. Business changes at such a rapid pace these days, that what was relevant three months ago is not so today. This creates a situation where a performance management system that is not part of the day to day activity can quickly become redundant and seen as a waste of time. This in turn leads to an erosion in the benefits of the system and a negative spiral quickly develops.

By utilising action conversations as the basis of your performance management system, you gain a number of advantages. Assessment to the employee doing the work is given far more quickly. This ensures that they are always aware of how they are doing in relation to their performance. This means that people will be more adaptable in terms of good and poor performance and more likely to be aligned with organisational change. It also means that problems will not sit and fester. They will be dealt with when they are still fresh in the mind. All in all this leads to a healthy and more dynamic culture.

This is not to say that a larger performance management framework should not be in place. We believe that it is always useful to spend time reflecting on how we are doing, where we want to be heading and how to get there. Rather performance management systems should be a summary of people's day to day commitments. To be most effective performance management systems should also be integrated with performance development, training, career aspirations and succession planning.

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© 2002 & 2005 Chris Chittenden