Mueller - What is 'performance management?'

Sunday, August 15, 2004

I recently Googled "performance management" and was shown over 2,000 results for articles on the subject. Performance management is a hot topic these days, especially at the corporate level. Interestingly enough, it is also creeping into the small business owners' vocabulary as well.

Many times performance management is confused with a formal appraisal system for employees. An effective appraisal process is definitely a part of performance management, but is truly just one part of a process and a mindset within our businesses.

Performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. Performance management is a whole work system that begins when a job is clearly defined and communicated. It ends when an employee leaves the organization, with a complete exit interview.

The goal of performance is to achieve the company mission and vision. Almost no one performs for the organization, however, if his or her own mission and vision are not accomplished as well. This is where performance management cries out for not just a process, but also for systems to be in place to achieve optimum results, both individually and as a larger business entity.

Performance management systems have an employee development focus. Personal development requirements of employees and staff are reviewed, and plans for formal and informal learning and training are then implemented. The interesting thing here is there must also be some type of metrics and accountability built in to the training.

One way to do this is to allow for time-phased training. And, then some type of actions learned from the training must be implemented and follow-up occurs as a result of the time spent in training. Too often, companies send folks off to training and they enjoy it and learn something, but never really come back and apply it in the workplace.

Employee compensation is linked to performance management. The system has to integrate compensation reviews as a part of the overall process. Personal performance objectives are an important part of this.

At the beginning of the evaluation period targets should be identified. Job tasks, multi-skilling, responsibility levels, and most importantly, expected measurable results are all a part of this. Business performance objectives for both individuals and work teams should be determined and communicated to all, not just to the specific teams.

Performance management means that all within an organization need to be aware of the expectations of everyone around them. Relative corporate goals and metrics should be extracted from and related to the overall mission and vision of the organization. These often are translated into terms such as gross sales, market shares, branding initiatives, customer satisfaction ratios, etc. These need to be made meaningful to the individuals and teams, just as any individual within the company should have their own individual mission and vision. The two must be mergeable.

There are other factors to consider in performance management. One is the overall morale and organizational culture. To change the culture of a company takes time and patience, but it can take place. We must always adhere to human resource policies and procedures, and we must always be evaluating these for relevancy and importance in regards to our mission and vision.

We must look outside our walls when working in the performance management mode. Our organizations must examine business competition, and our own market strategies -- are they current, are they relevant, and reasonable in terms of our people accomplishing the goals? And, we must also look at our own inherent fiscal state -- do we have the necessary capitol and cash flow to support our initiatives? So, do not just consider a good employee review as being "performance management."

Learn how to focus on a results-oriented culture that satisfies the organization and the individuals within it.

Sharon Mueller is president of Success Skills, a staff development and training company committed to the success of a client's enterprise through improving the performance of employees and processes within the client's organization. She can be reached at 332-0900 or

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