THE BUSINESS CONTEXT
In business today, there is only one certainty and that is
that tomorrow will be at least as challenging as today. Constant
change is a fact that organisations are having to learn to
live with, together with the fact that change is increasingly
fast and erratic. Change is being driven by external challenges
which include:
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Mature
markets making an organisation's products/services extremely
price sensitive |
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Slow
growth and low inflation economies making it difficult
to grow businesses/sustain market share |
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Changes
in customer buying patterns requiring enormous flexibility
and responsiveness by suppliers |
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The
increasing power of customers putting pressure on suppliers
in the areas of cost reduction, quality, and providing
'added value' advice |
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The
ever increasing technology threat constantly putting pressure
on the ability of organisations to achieve and maintain
competitive advantage |
These
and other pressures have reinforced the imperative for organisations
to optimise the development and management of the people they
employ. It is now recognised that products and services alone
cannot deliver corporate success; people and their skills
are key to the long term success of any business.
As
increased results become expected of fewer people, issues
of performance management are pushed to the fore. For many
organisations, they can be summarised as:
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The
need for everyone within the organisation to be focused
on key imperatives |
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The
requirement for greater accountability from managers and
their staff |
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The
broadening of skills (technical and interpersonal) across
the organisation |
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The
emphasis on teamwork versus individualism |
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The
need to manage performance for subjective, behavioural
aspects of an individual's role as well as the easier
to define end results |
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The
requirement for employees to take more responsibility
for their own personal growth and development |
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The
move towards the manager as coach/counsellor versus checker/controller.
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For
managers and their staff, employability and marketability
have now replaced promotability as the key issue. As never
before everyone is aware that corporate success increasingly
depends on the performance of everyone within an organisation;
and their performance is no longer driven by loyalty or job
security but by personal goals.
Corporate
success internally is essential to underpin corporate success
externally. Success is ultimately about agreeing challenging
goals (with everyone) and achieving them. Given the large
variety of jobs undertaken in an organisation, and the frequent
changes in people's
roles and responsibilities, this is not always an easy task.
To leave objective setting as a statement of good intent is
therefore dangerous; it simply will not happen. Managers need
a process to do it, a performance management process.
BACKGROUND
TO PERFORMANCE MANAGEMENT
What you measure and reward is what you get!
Every
organisation has its measures of what matters to it for success
in today's competitive market-place. These measures of success
will revolve around being able to not only survive but also
to prosper and grow. Organisations must have strategies to
achieve short term performance; they must also have strategies
to achieve improvements in longer term competitiveness and
performance (however this is measured). These strategies must
impact and involve every employee to become a reality.
To
stand any chance of success an organisation needs to identify
its overall purpose and vision, and then translate these into
an overall business strategy. Questions such as 'what business
are we in?', 'what are our markets?' and 'why do we exist?'
need to be answered before examining what the company needs
to do to succeed. The answers to these questions then need
to be set down in the company's strategic plan. This plan
typically looks a minimum of 3 years ahead and details the
company's markets, its customers, its products and services,
financial projections and resourcing needs. It identifies
the company's strengths, weaknesses, opportunities, and threats,
and the strategies to be employed to gain future success.
The
final step should be to communicate the objectives and supporting
plan to its managers so that they can tackle the issue of
how the plan is to be translated into individual responsibilities.
The
overall process is shown in the following diagram.
...READ
ON
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A
performance management process focuses all of an organisation's
people resource on achieving the desired results that will drive
the achievement of business success, both in the short and longer
term.
In
most organisations this process starts with the setting and
communication of their strategic objectives.
These
provide the focal point for objectives and performance measures
throughout the business.
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MISSION
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COMPANY OBJECTIVES
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FUNCTIONAL
OBJECTIVES
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MANAGEMENT
OBJECTIVES
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INDIVIDUAL
OBJECTIVES
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Individual
performance objectives and measures need to focus on key imperatives-both
for the business and for the individual. Key imperatives for
the business are those which have maximum impact on business
results.
Key
imperatives for individual staff are those over which they have
real personal influence and control.
Any
performance management scheme should therefore be designed to
identify those performance objectives which combine high impact
on the business results with high personal influence. Any scheme
should help direct individuals' energies into the most productive
areas.
Performance
management schemes only achieve these results when all employees
are clear on how they can best impact the business through personal
actions. Managers and their employees need to decide this together.
MANAGERS'
RESPONSIBILITIES
Ask most organisations what they require of their managers and
you will receive some bewildering and extremely challenging
responses. Typical of these are:
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Maximise
efficiency and productivity on a day to day basis and create
longer term opportunities for continued success |
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Get
everything right, to the highest quality, all of the time,
but take some risks, experiment, be innovative and creative
to find new and better ways of doing things |
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Meet
your short term financial objectives but not to the neglect
of building relationships with customers and of staying
in touch with your competitors' activities and market trends |
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Be
a manager, leader, coach, trainer and counsellor to your
staff and find the time to give to thinking strategically,
business planning and making recommendations for continuous
improvement |
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Become
broadly educated in all aspects of modern business practices-IT,
management information, marketing, sales, finance, personnel,
legal-and provide technical or a specialist input to the
business |
As
one manager put it "this is the era of schizophrenic management!"
To
meet these organisational demands, and to stay sane, managers
need to act fast. They need to:
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Obtain
a set of clear overall objectives from their managers |
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Work
out what these objectives will mean to them in the management
of their teams |
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Formulate
objectives for them and their direct reports to make the
overall objectives happen |
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Allocate
and agree objectives with each of their direct reports |
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Have
their direct reports do likewise with their own staff |
Once
this has been done with the consultation and participation of
all involved, their task is then to plan and organise the necessary
resources, put in place appropriate controls, implement the
required actions of all involved, and make regular assessments
to check on progress.
Any
performance management scheme should therefore be designed to
make this process relevant and meaningful to every employee.
It can achieve this through a simple six step process in the
need for such a process in which the employee, together with
his/her management process.
THE
EMPLOYEE'S RESPONSIBILITIES
Every organisation which is succeeding today is doing so through
the active involvement of all its staff. Organisations will
win through their people when they:
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Are
excited about the future of the organisation |
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See
personal gain in that future |
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Enjoy
being a part of a team in which they play a unique and valuable
role |
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Are
motivated by their managers, and the environment in which
they work |
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Can
succeed in their jobs, and that success is recognised |
Their
responsibilities in these areas are to be both proactive and
reactive. There is a need for them to be responsive to the organisation's
needs but there is also a need for them to express clearly what
they are seeking in terms of their own personal needs and motivation
agendas.
In
any good performance management scheme these personal 'wins'
should always be introduced into the dialogue between employees
and their managers.
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