Assessment & Evaluation

10 Lessons Learned by Implementing Performance Management
Carolyn Koening


1. Teach people how to give and receive feedback. If employees are not comfortable giving and receiving feedback, no performance management system in the world will be effective. Somehow, when we all became adults, we acquired a visceral reaction to giving and receiving feedback. It is so important that you create a culture that is comfortable with this type of interaction, and it is part of the daily management and communication between employees and managers. If it is not part of the daily interaction, the appraisal process will become a much dreaded event that no one feels competent to participate in.

2. Keep it simple. Defining expectations and measuring performance have been around since the beginning of time, so why do we make it so hard? The biggest mistake companies often make is overcomplicating the performance management process. In its purest form, managing performance is clearly stating what success looks like when a task is complete and providing feedback on the result. If an appraisal cannot be completed or delivered in less than 40 minutes, it is too complicated.

3. Linkage to all employee processes. If an employee cannot clearly see the tie between job responsibilities, objectives, competencies, results, performance ratings, development opportunities and promotions, your system has failed. Complete and clear linkage is imperative for effective performance management systems. Leveraging a best-in-class automation tool is a great way to ensure your linkage is working and obvious to your people.

4. Make it meaningful. What does the company value and how are you contributing? Every company has a strategy on how they make money and grow. Whether it is reducing expenses, improving efficiency, increasing revenue or all of the above, every employee has a role in making that strategy a reality while they are doing their day-to-day responsibilities. Ensure that you are rewarding not just day-to-day execution and project results, but also the behaviors that support the corporate strategies. That is how clear, meaningful linkage becomes apparent within all levels of the organization

5. Accountability at all levels. Everyone owns the process and they must be held accountable for its success. Employees own sharing their contribution, and managers are accountable in defining clear objectives, assessing results and defining ways for increased improvement. There also must be consequences for not participating effectively. Without consequences, performance management will never be a priority. For example, MasterCard implemented SuccessFactors technology, which offers an automated system with built-in reminders, metrics and reporting tools to provide a corporation with the data to administer consequences, if needed.

6. Full Disclosure of ratings between managers. Make sure there is healthy discussion between business units. Consistency and fairness are the two key factors to all human resource programs, and the performance management process is no exception. The only way to ensure managers are valuing the same performance is to have them defend their ratings to each other. While it is a painful process at first, over time a company will see consistent performance expectations across the organization.

7. Daily activity versus an annual event. If feedback is given as part of daily management, the appraisal process should be a non-event. The annual appraisal should be the documentation that supports the conversations that have happened all year long. As described above, if feedback is not part of your daily interactions, then it becomes a much-dreaded event. Also, having an automated system that is part of employees and managers’ daily process makes the integration of managing performance easier.

8. Start at the top. Too often, the worst people to deliver feedback and help to develop people are the executive team. Many executives seem to think this is why they hired HR professionals. If the executives can model the way performance management should be done, the rest of the company will follow.

9. Integrate best practices. Too often, HR program designers think it is their job to create the most effective performance management system. My motto is to steal shamelessly. There are great practices out there, and you should leverage them to help create the best program for your company. Leveraging companies that provide technology through an ASP or hosted model really helps you stay current with best practices available. The technology vendor will ensure the latest and greatest trends are part of the software, and you can leverage them as you see fit.

10. Show me the money. Differentiate performance and especially pay. At the end of the day, we all come to work to be rewarded for our performance. Ensure that your compensation and incentive systems are truly rewarding your highest performers. It is critical to demonstrate—through compensation—what you value, even if this means giving less or nothing to your lower performers. If you don’t, expect mediocrity across the board. Also, having an integrated platform that links objectives, performance, development and compensation is a sure way to see if you are truly being consistent.

Carolyn Koening , principal of HR Expert Consultants Inc. has spent more than 15 years implementing performance management systems working as a human resources executive for companies such as MasterCard International and Sprint Corp.