The ultimate goal of introducing a performance management system is to improve organizational performance. That sounds good, but does it ever really happen?
Or is the data that’s collected in traditional performance appraisals interpreted to enforce old opinions — not necessarily to create new ones? Are we implying that if employees are not managed, they do not perform?
Studies have proven organizations with effective performance management processes consistently outperform those without such systems. The goal is to have a comprehensive performance management system that links a company’s and an individual’s objectives to desired outcomes.
The old style of goals and objectives set by management, and agreed to by employees, is no longer a good measure of success or failure. Neither is the development of competencies against which performance is measured — which may or may not truly impact the bottom line of an organization or help it attain its goals.
These annual, in some cases 11- or 12-page, report card-style reviews cause disruption and anxiety, and end up de-motivating team members and managers. Employees don’t like receiving them and managers don’t like giving them.
A rigid system such as this, regulated by senior management, tends to dampen employee initiative, rather than empower or encourage people to focus their efforts and strengths on initiatives that ensure an organization achieves its goals.
Over time, a culture of performance measurement starts to emerge: Employees blindly follow what they are measured and rewarded on — often at the expense of the company’s success.
To avoid this cycle, organizations need to involve employees as much as possible during the design and implementation of a new system, carefully monitor its use and introduce rewards.
But first, there must be a clear understanding of what the employer is trying to achieve. To link performance management with an annual corporate planning process, the organization must establish targets for improvement and focus on individual, departmental and corporate plans and measurement tools designed specifically to achieve organizational goals.
It must also ensure all employees understand and share the vision and goals. It is that perfect match between creating a culture that encourages great performance and focusing on an organization’s success.
Case study: Town of Pelham
A municipality in Ontario recently redesigned its performance management process. Darren Ottaway, chief administrative officer at the Town of Pelham, Ont., is like few other bureaucrats. His big-picture thinking and creative approach pushes everyone around him to stretch a little bit further and try things that have never been tried before.
Phrases such as “tried and true” and “that’s the way we have always done it” are not acceptable in his vocabulary. Ottaway is committed to making the town an employer of choice with a strong, focused workforce driven to achieving council’s strategic vision.
The municipality recently adopted an innovative approach to problem-solving and goal-setting. Moving forward, it wanted to replace the traditional review structure with a more lightweight, continuous model, fostering trust between employees and management while addressing employees’ needs to enhance their own development and work toward their strengths.
This meant creating a model that made employees want to contribute, learn, support one another and take pride and have fun in what they did, while ensuring the municipality’s goals were met.
Ensuring support for the new process from the entire management group, all employees and council was critical to Ottaway. Initially, a taskforce of seven employees, representative of each department, was created.
They met to determine what an employee’s essential components were in a performance management process. Since views varied, they decided to open the discussion to all employees in a half-day meeting dedicated to the subject.
The result was the foundation of a model based on:
•ensuring alignment with the strategic plan
•promoting fairness, treating employees equally but different
•providing a platform that ensures a safe and open dialogue
•aligning rewards with great performance.
As the responsibility fell heavily on the management group’s shoulders, it was imperative to design a training and coaching program that supported the management team and the project. A “Principle and Value Statement for the Town of Pelham” clearly identifies respect, communication, professionalism, teamwork and innovation as core values.
Challenges to the new approach included the development of a measurement tool that treated hourly employees and salaried employees fairly and equally, and built a reward system that was achievable within the current budget and supported by council.
Solutions included developing a measurement tool that benchmarked performance against the values of the organization and, as such, could be the same but different for the two different employee groups.
It was recommended the municipality launch a one-year pilot project that included monthly progress reviews with a training and sharing component, and quarterly coaching meetings with managers — with an external coach to help guide the process.
Annual planning meetings as opposed to performance reviews are based on the establishment of a one-page plan that outlines for each employee the “me” goals — personal development goals for the year — and “my department” goals, based on the operational plan and strategic priorities highlighted under the “my town” goals.
The result is a positive discussion between employee and manager reviewing the individual plan moving forward over the next 12 months. Monthly departmental goals are monitored and, when required, adapted to change. Rewards are based on incentive pay increases and a budget allocated for each manager to celebrate small departmental successes.
Overall, it’s an exciting change to the way performance is managed, and mediocre employees are motivated and held accountable to set goals and achieve recognition and reward. The pilot project is launching in January 2014 and has strong support from council and staff.
Anne Charette Tyler is president of the Burke Group, an HR consulting and staffing firm based in St. Catharines, Ont. It helped the Town of Pelham redesign its program. She can be reached at (905) 641-3070 ext. 225, (888) 896-3618 or firstname.lastname@example.org. For more information, visit www.theburkegroup.com.