4 Steps to Effective Performance Management


The Institute for Corporate Productivity recently came out with four recommendations for putting in place an effective, robust process for managing and recognizing individual performance.

Focusing, as is their wont, on the practices of high performing organizations, their research found that:

  • Less than 20% of organizations in general have managers who are very highly or at least highly skilled in conducting performance reviews.
  • Critical to managing individual performance effectively is to have the right set of skills resident in your managers and supervisors.
  • High performance enterprises are twice as likely as low performing ones to provide training in these critical skill areas;
    • Developing goals
    • Giving and receiving feedback
    • Conducting a performance review meeting
  • High performers address not only results (goals, metrics, etc.) but also the behavior that generates the results.

Here, taken verbatim, is their four-part recommendation:

  1. Train managers to deliver effective performance management. Arming managers with the ability to properly develop goals, give and accept feedback, write up appraisals and provide motivation will greatly improve the overall performance management process. Training on how to actually conduct the appraisal meeting is also critical.
  2. Differentiate and reward top performers appropriately. Use the performance management process to identify the true superstars in the organization. Then reward those people accordingly. If the top merit increase in your organization is 5%, and the average employee receives 3.5%, then there really is not much separation and you risk losing top talent.
  3. Address and resolve poor performance. Simply rewarding high performers and ignoring low performers will not suffice. Similarly, culling the bottom 20% and replacing them would be a costly endeavor. Instead, identify the factors leading to the poor performance. Perhaps there are development opportunities that could help or conflict issues that can be resolved. Given the proper direction, a low performer can often become a high performer. If termination or similar actions are necessary, those decisions are made easier by examining all of the possibilities first.
  4. Encourage continual feedback. Waiting until the end of the year to tell an employee how they are doing helps neither the high- nor low-performing worker. Low performers never get the course correction they may need to turn things around, and this can lead to an ugly appraisal meeting. High performers also benefit from ongoing feedback. The recognition of work well done can keep them engaged and on track.

These are so sensible. They offer a straight-forward roadmap to follow. If you are a senior leader, demand, engage in and support a process that does all four really well. Our training program, The Skillful Leader, can deliver on items 1, 3 & 4. Your HR folks can, again with your support, devise a system to see that #2 is installed.

All your employees–most importantly your star performers–will appreciate this and your organization will surely reap the greater benefits of everybody contributing more.