The Trifecta of Effective Performance Management

Making performance management work.  This is a significant and critical challenge for any organization I've ever worked with.  So I was interested to hear what key lessons Sibson gleaned from the recently released State of Performance Management Study conducted in partnership with WorldatWork. 

Study results suggest that effective performance management is achieved through a balanced focus on three things:  leadership support, program design, and execution by managers (see figure below, source: Sibson Consulting).

This model certainly fits my experience.  Performance management failures take a variety of shapes, but a common pattern I've noted is the well-designed program that fails due to lack of leadership support or manager execution - or both.

Sibson also notes some key success criteria in each of these areas, based on observations from top performing organizations, that provide good food for thought.

Leadership support

Leaders in top performing companies are more likely to:

• Set the expectation that performance management will be done and performance ratings will be differentiated.
• Audit to make sure that performance management is tied to the overall performance of the company.
• Act as a role model for effective performance management.
• Connect performance management to business goals and people decisions.

Program design

While many of the tweaks and changes we make to the design of our performance systems do not have significant impact, there appear to be a few things that make a real difference:

• Increasing objectivity with defined accountabilities, behavioral competencies and quantifiable metrics that get employees focused on the right things.
• Making the tools convenient to access and easy to use.
• Picking a rating scale and sticking with it.

Managerial execution

So often the weak link in performance management.  The study notes two behavioral characteristics of managers that appear to be linked to success, in performance management as well as overall company performance:

• Managers coach and give regular performance feedback to improve performance
• Managers complete assessments thoroughly and on time.

In this last area, Sibson also notes another activity - heightened visibility of performance management practices and results across managers - that seems to have a positive impact on execution:

One technique that is helpful for improving the quality of execution is to increase the visibility of performance ratings, messages and actions through performance calibration across managers or through audits that publish distributions of ratings for each organizational unit.  This makes it less likely that managers will "game" the system or rate everyone high or in the middle.  When managers know that their ratings will be visible to other managers, they tend to do a better job getting their assessments done and are more objective in their assessments.

Comments

[Wally Bock]

Excellent post, Ann. This certainly resonates with both my experience and my research.

On Leadership: part of setting expectations is usually evaluating the managers on how they handle performance management and tying rewards to those evaluations.

On the System I would add that the effective systems I've seen highlight 3 or so important measures and make those the core of evaluation.

On managerial execution, I agree with what you have. What's not so obvious is that great supervisors do "regular performance feedback" several times in a day as a regular part of what they do.

There are two reasons why managerial execution often comes up short. We promote far too many people to management who don't have the aptitude or desire to talk to others about their behavior and performance. Then, we compound that by skimping on the training in the skills needed for those conversations.

[Ann]

Wally:

Thanks for the comments, and I agree - particularly with your point on holding managers accountable (via - yes! - the performance management program) for doing a good job managing the performance of their subordinates. Can't just train them and give them good tools (unfortunately). Have to also let them know (and ensure)that there are consequences for doing well or poorly with this critical responsibility.

[jen_chan, writer MemberSpeed.com]

These three factors create the much needed balance in any organization. With regards to program design, I think that bit can only take a company so far. What's really important is the performance of the people who form the team as well the managers who take charge of everything.

[Michael Haberman]

This is right on Ann. My experience has been that this gets little attention in the organizations I work with, mostly small companies. They look for an easy tool, that has no tie to company performance and then managers are not held accountable for doing it. Most are looking for a check box approach that handles attendance and attitude. God forbid we have to actually sit down and have a work conversation with an employee. But we struggle on and try to educate them with the importance of effective performance management and I have referred readers of my blog to yours. Keep up the great posts.

[Ann]

Jen:
Thanks for the comment and thoughts. I agree that program design only takes a company so far - and yet that is what we tend to focus on, often ignoring the other two areas.

Michael:
Thanks for visiting and adding your thoughts, and for the link from your site. It sounds as though we both are encountering the same scenario - organizations looking to address performance management with a simple form. And they will expend tremendous energy on that form, seemingly convinced that if they get it right, it will absolve them of the need to speak directly to employees about their performance. How we can be so willing to short-shrift such a critical thing as performance management is a bit of a mystery to me.

It is a struggle, isn't it?