January 2011 Newsletter

Filling in"Performance Gaps"

January 2011 Newsletter Image

As business leaders, we want the New Year to be a successful one. And our success often depends on how effectively we manage our employees. Talking about that inevitably includes a discussion on Performance Management. Celebrated as a breakthrough management system, it promises, if properly implemented, to take businesses to a whole new level of functionality and profitability. For some companies, that’s been the case. But, as Patrick Hauenstein tells us in his article, “The Value Promise of Performance Management,”“The Value Promise of Performance Management,”  many businesses that use Performance Management tools, still struggle with “performance gaps” between “desired results” and “actual results.” In those cases, Performance Management isn’t quite living up to its promises. In his article, Hauenstein offers several compelling reasons as to why this may be the case.

Rather than recap his findings, though, I want to add two of my own reasons why I think some businesses are finding such a disconnect between Performance Management in theory and Performance Management in practice:

1. Performance Management means Project Management
As Hauenstein’s article points out, Performance Management is a process, not an event. Yup, it’s a process alright…a LONG, layered process with steps within steps, each one of which requires a strong commitment from leadership, clearly articulated goals, defined “next steps” and consistent follow-through. Translation? Managing employee performance is a huge project that, in and of itself, has to be managed. Successfully implementing Performance Management tools requires managers to already have effective project management skills in place---and many don’t. If they did, would they be looking to implement a new management system? It’s a bit of a catch 22.

2. Performance Management gets reduced to Performance Evaluation
Evaluating employee performance is an important part of Performance Management. But more often than not, it becomes the only tool out of the Performance Management toolbox that businesses actually use. Conducting performance evaluations is not Performance Management; it’s Management after the Performance---reactive rather than proactive. I’ve written a lot about how often I work with business leaders who are reluctant to planbusiness leaders who are reluctant to plan before launching into projects. Since implementing Performance Management means managing a multi-layered project (as I mentioned above), often the first layers---the ones that require up-front planning--- get dropped. So employee performance is being evaluated, but not actively managed from the start.

So, am I suggesting that businesses not use Performance Management tools? No. In fact Hauenstein’s article points out that those businesses that do successfully implement Performance Management tools reap 2.4 times the returns of typical companies in their industry. What I do suggest (and have used successfully with my clients), however, is adding a management tool called the Individual Development Plan (IDP) to the Performance Management toolbox. IDPs require leadership to be actively engaged in managing employee performance from the start. Employees and managers work together to create a written development plan built upon a full assessment of the employee’s strengths, weaknesses, job satisfaction and individual goals. Once that assessment is reviewed, both manager and employee outline mutual goals tied to the organization’s Vision, Mission and quarterly goals.  

The Individual Development Plan is a proactive management tool that: 1) doesn’t require up-front project management expertise to implement, and 2) requires leadership to plan, making them engage from the start instead of only evaluating at the end. In other words, Individual Development Plans help fill in the “performance gaps” of Performance Management which, ultimately, will help you fill in yours.

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