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During 2017, I was drawn into a few debates about the value of Performance Management (PM). In many organisations for many years, there have been loud advocates for deep changes to traditional PM processes. Some Human Resources leaders would be happy to ditch PM altogether, arguing that the appraisal process is disruptive and completely unproductive – others just wish that performance ratings would disappear.
In my experience, there’s a solid business case for a common Performance Management process in most organisations, but PM usually fails because of bad design, or poor alignment to the strategic needs of the organisation and its employees. Too often, HR departments have accepted a “one size fits all” PM process that’s pushed onto employees without sufficient consultation. This is becoming easier to do with the advent of complex PM systems that are combined with an organisation’s ERP and payroll systems. (Dare I say, “the tail is wagging the dog”?)
The best solution involves developing a strategy driven PM process that is facilitated by a tailored Performance Management system (of which there are an abundance). I have listed below some fundamentals of successful PM development.
Articulate PERFORMANCE – to achieve enduring success, publish the required:
Engage with STAKEHOLDERS:
Address the PROBLEM(S):
Relevance of PERFORMANCE RATINGS:
Invest in IMPLEMENTATION:
Performance Management program failures will often damage remuneration effectiveness, and consequently corrode employee engagement. The development fundamentals above will help rejuvenate and improve Performance Management program design.
Of course, my particular interests include employee performance measurement and the impact of PM design on remuneration management. Therefore, I focus on an organisation’s genuine need for base/ fixed pay differentiation and variable incentive pay, which should always be developed for each job family and work level.