1.13 Managing Human Performance
This goes from very loose to narrow performance-pay focussed. Either you move with formal systems or you facilitate performance in interpersonal ways meaning that you do it without measurement.
In possible definition evolves around a shared vision of purpose and aims which in the end enhance the performance of both individual and organisation. (Fletcher, 1993)
As of Fletcher there are three key elements:
\- setting of clear objectives
\- Formal monitoring and review
\- use to reinforce desired behaviour
All this needs to be horizontally (performance management) and vertically (fit company with individual) integration.
Go from corporation strategy to department purpose analysis. This affects individual objective setting, performance evaluation and then reward and development.
Performance management should work at all of those levels. A more advanced system can be seen in book 13 at page 13.
There are different parts within this performance management cycle.
1\. Setting and agreeing on objectives
Communication is key and objectives can be both targets and tasks. Influences include:
\- Corporate goals
\- Senior management goals
\- Department/functional goals
\- Team goals
\- Individual goals
They should be SMART
Problems:
\- Too tightly specified tasks
\- Most important objectives not measurable
\- Agreement is difficult
\- What is seen as realistic varies
\- They are time bound
They should also be consistent and agreed objectives are often more effective. They should also try to achieve the upper goal (e.g. individual goals should help achieve team goals)
2\. Performance review
To be good this often entails:
\- Assessment against agreed targets and standards
\- Constructive feedback on accurate info
\- use positive reinforcement
\- achieve joint agreement on future things to do
There are different kinds of methods to use:
\- rating (Semco)
\- comparing achievements with objectives
\- Critical incident method (file incidents during the year)
\- Narrative report
\- Behaviourally anchored rating scale (custom-built characteristics for job to rate it)
A newer approach would be 360-degree feedback where assessments are sought from a variety of people (co-workers, subordinates, internal customers, suppliers, manager, external customers) to remove the bias or imperfections from a review by just one person. Sometimes questionnaires are adapted especially for the targeted stakeholder group.
3\. Measuring performance
While what gets measured gets done, it is important to remember that:
\- The act of measuring needs to cost less than the result achieved brings in
\- Too much data is bad
Why: to see problems and correct them and see if the correction is working
What: becomes difficult in people management especially where no direct output
Currently we are moving to measuring a bigger set of data to have a well rounded view (EFQM, Six Sigma, and Balanced Scorecard) but linking this to individual performance is hard.
To link pay to performance is thought to be the solution of performance management but it gets complicated. For one, the link between performance and pay needs to be very clear. It might also be bad for team work and needs to be big enough to make a meaningful difference.
EVA (Economic Value Added) method is currently used to align management with long term shareholder wants and needs.
In general performance based pay works better in smaller organisations as things are easier to measure.
Many times performance management comes from the accounting side and neglects the personal aspect. Other methods of managing performance would include individual coaching and counselling.
Different coaching styles include The Judge (tough), The Helper (Protective), The Thinker (Calculator), The Fun Lover (Whoopee) and The Defendant (Manipulative).
Remember:
\- can make vital contribution
\- Different approaches work at different times in different places
\- Employee needs to be committed to the enterprise.