Book review - performance management by Linda Ashdown

At a time when business is in great need of growth, the most important leaders bring to their organizations a focus on performance. This view is different from the stubborn focus on efficiency that has characterized managerial thinking over the past 30 years.

Work efficiency is most often defined as "the number of hours of work performed to accomplish tasks in relation to the standard in terms of business applications or conditions." Efficiency is to do the same with less money. Companies most often increase efficiency, trying to reduce the number of working hours needed to achieve the same level of production. Translate to bills because the company creates less on wages and other service costs. Therefore, efficiency consists in reducing the denominator, i.e. expenditure - number of employees, working hours - in order to change profitability.

What is performance management

In practice, the term Performance Management is increasingly used today - performance management - instead of the Management by Objectives (MBO) system, although the principles on which both systems are based are similar.

Both allow us to systematize the management process by setting goals, provide an opportunity to assess the performance of employees, focus on the result, and lead to increased productivity of the company and business as a whole. However, the Performance Management system focuses on increasing the importance of the role of the leader in supporting employees to achieve their goals. In addition, the PM system includes an annual Performance Review - a discussion of employee performance.

Why is it important

If you set a task of maximizing the potential of your employees, you should try to explain to them all of the above points calmly and naturally, during a normal conversation. Performance review gives positive results at once on several levels:

• Motivation

• The employer brand

• Employee well-being at work

• Talent management

• Psychological contract

How does it fit with an organization and HRM system?

Company goals are the same of the general director and teamleads, the goals different departments are the goals of the head of team.. At the same time, setting goals even at the lower levels of the company occurs in accordance with the goals and strategy of the organization.

Goals are depending on the management and company style . Who sets goals for employees? In an authoritarian style of management - direct manager, based on the goals of the company / division / department. In a democratic style, employees are introduced to the goals of the unit or department, and then they have the opportunity to develop goals that are subsequently discussed and agreed upon with the immediate supervisor. If you say that this is more time consuming, then I agree with this, but, as experience shows, it is more efficient.

How does it work

All ele­ments of the per­for­mance man­age­ment cycle are very impor­tant, but this will not nec­es­sar­i­ly lead to effec­tive per­for­mance man­age­ment for your organ­i­sa­tion. There are many oth­er fac­tors which depends on performance apprisial, such as:

• Hav­ing buy-in from lead­er­ship and senior man­age­ment to per­for­mance management

• Ensur­ing the per­for­mance man­age­ment cycle is con­tin­u­ous and not an annu­al process

• Ensur­ing per­for­mance con­ver­sa­tions and reviews are mean­ing­ful and not​”tick-box” exercises

• Hav­ing easy to use per­for­mance man­age­ment soft­ware which sup­ports effec­tive per­for­mance man­age­ment and gives you vis­i­bil­i­ty of per­for­mance man­age­ment activity.

• The skills and will­ing­ness of your man­agers to deliv­er effec­tive per­for­mance man­age­ment on a day-to-day basis

How do you do it

1. At the beginning of the period (month, quarter) of the organization, departments, employees, goals (tasks) are established, the implementation of which depends on the variable part of wages.

This means that they must be:

• Specific - specific to the organization / unit / employee;

• Measurable - measurable (define metrics to calculate performance);

• Achievable - achievable, realistic;

• Relevant - relevant (relevant), important;

• Time-based - based on setting clear deadlines.

2. Decomposition, or "cascading" of targets from the upper level to the lower.

To determine the level of achievement of goals, KPIs are established (Key Performance Indicators), i.e. key performance indicators or performance indicators; You can also use Russian versions of this term: KPI - a key performance indicator or KPI - a key performance indicator.

4. Formed a culture of dialogue.

The manager must not only evaluate the employee’s performance at the end of the reporting period, but also monitor it in the current period, as well as provide the subordinate with the necessary resources to achieve his goals and provide him with support if he needs it.

If an employee cannot influence the fulfillment of goals due to circumstances beyond his personal control (for example, due to the poor performance of the interacting unit), and later for this reason he will be deprived of a bonus, then he will create a negative attitude towards the system itself (“unfair”) and directly to the leader. From his point of view, since the employee did not complete the task, it means that the right decision was made to reduce his bonus, but, according to the employee, the head would not be right, because he would have completed the task on time if he had not been let down by another unit.

Western companies understand so well how important the support from the leader and his ability to conduct a conversation with an employee aimed at achieving his goals (such conversations are also called coaching) that they conduct special training to form such a skill.

5. The remuneration is differentiated.

It is necessary to establish a clear relationship between performance and remuneration, the value of which should be compatible with the value of the goal (result) for the organization

Planning and action

1

Training goals, clarifying the knowledge of the objectives of periodic assessments, its importance for motivating and improving work efficiency and shaping a development attitude, arming with tools for conducting interviews,Training in the practical use of assessment techniques, providing knowledge about potential evaluation errors, strengthening in an assertive attitude in the situation of conducting evaluation and development talk, influencing the change in employees' attitudes and behavior, ability to use feedback in a conversation, practical application of development-oriented conversation techniques.

2

Introduction - periodic assessment system in the light of the organization's personnel policy and evaluation interview.Discussion of the definition, structure and specifics of a development conversation, its characteristics (i.e. how it differs from an evaluation conversation);Goals to be achieved during interviews: how to prepare for the interview, how to communicate the employer's goals, how to provide feedback, how to motivate an employee to set goals and plan specific development activities?

Training of development talks:

- conversation conducted with the help of coaching questions,

- conversation based on feedback - work on a selected real case study,

- conversation about professional and development goals - work based on own case study or prepared scenarios

The most common evaluation errors and how to avoid them?

Communication in the assessment process. The most common mistakes in the assessment process.Assertive modeling of employees' attitudes and behavior towards assessments.

3

List the areas where the employee's performance is subpar, giving each a separate section. Following each performance area, describe specific steps the employee must take to improve her performance. For example, if she's a sales representative who has a revenue goal or sales quota to reach, quantify the goal so as to leave no ambiguity about what it takes to succeed on the performance-action plan. If the employee needs to achieve a better attendance record, describe the process the employee has to use for alerting her supervisor to unexpected absences and if there's any kind of documentation necessary to return to work after an absence, such as a doctor's note.

4

Conversation and obtaining information from key employees. Interviews with employees directly involved in the processes analyzed and evaluated are a very important element. It is worth conducting a conversation with employees of the managerial level to get to know their perspective and proposals regarding possible optimization changes.It is also worth conducting a separate meeting with employees directly performing tasks in the warehouse. It is good then to simulate the work performed, focusing on any problems and obstacles that can translate into speed and efficiency of work. Very often, the information obtained at the level of these conversations supplement the analysis with valuable information.

During the meeting with employees (regardless of level) it is worth focusing on estimating the attitude to work. Let us remember that the atmosphere at work is one of the factors affecting efficiency. Let's think about whether the composition should remain unchanged or maybe changes within departments or changes in the number of people within specific teams are necessary.

5

In summary, the benefits of Performance supervision are huge.They apply to both aspects of:assessment of process effectiveness,technology correctness assessment,operational profitability assessment,but first of all EFFICIENCY introduces an automatic mechanism of MOTIVATION and increasing the efficiency and self-control of employees.Leadership practice is increasingly proving the importance of employees, especially at a time when it is becoming increasingly difficult to recruit them.

Measurement

• After collecting the data, you should generate reports that will determine the final direction necessary to carry out the changes. At this stage, reports should be drawn up showing:

- internal operations performance

- accuracy and timeliness of shipping orders

- level of return of goods

- inventory level

- stock replenishment time

- order picking time

- packing or loading time

Analysis of the above reports will allow you to identify which departments operate in accordance with adopted standards (expectations), and which require attention and make changes.External benchmarking. The final evaluation should be a comparison of expectations regarding the results achieved with the average results in force in the industry.

It is worth remembering, however, that the comparison should be as precise as possible. When choosing companies to compare, we try to choose companies from the same or similar industry that are more or less at the same stage of development. However, do not take the standards of a particular company as your own too quickly and directly. There are many small aspects that affect the final results and which may have been left out of the analysis. A better solution would be to periodically compare the results of analyzes carried out both in your own company and market standards. This action will allow to assess the development and direction of changes in general trends.

To conduct employee evaluation, you will need a specially profiled survey consisting of open and closed questions. It should contain questions about knowledge, time management, work organization, hard and soft skills and predispositions, as well as the employee's motivation.

Conclusion

For many managers, assessing their subordinates is a very difficult task. Although they do deal with it on a daily basis, checking the work of their team, the need for periodic assessment is an unpleasant and stressful duty for them.First of all, it's worth remembering that it's even more difficult for an employee. He is assessed by his superior. He doesn't know how this could affect his further career in the company. So let's do everything to facilitate this conversation, e.g . At the very beginning, present the purpose of the conversation - explain why such conversation takes place, what will be its consequence; if there is a suspicion that the employee is afraid of negative consequences, it should be clarified that there will be no, because the assessment is to help, not disturb,ask the employee how he assessed individual competences - if the employee assessment took into account the employee's self-assessment, start with him; ask what assessment he assigned to a given competence and why?

Performance reviews are important because they help each side of the table gather thoughts and become more familiar with the areas that need improvement and those that are working well. If done right, reviews can be one of the best tools for developing an employee’s career with a company. Start to use BrainyHR software for your performance review, don't waste your time for long and boring paperwork.