Blog post written by Rob Harman, II CPA, MBA, PHR, SHRM-CP
This is part two focusing on of five things to think about when designing a Performance Management System and Process. Part one covered use. This part will cover design, measurement, output, and competencies.
2. Design (see blog series part 1 for the first item).
There are many factors to be considered when designing a performance management system. Below are factors that are important as you consider designing a system for your organization.
- Simple to use. If your system is cumbersome, people are not going to want to use it, or will just do the minimum it takes to achieve the “goal” of giving feedback. Complicated systems only produce good results when everyone involved is dedicated to spend the time to provide the input. The evaluator and evaluatee need to have the ability to choose from a range of selections based on each item being measured (i.e. a rating scale of 1 to 6 for each question). The system should also have an open text box after every question in the event the individual would like to input comments or examples to support the rating.
- Accessible anywhere anytime. As many in today’s workforce work from remote locations outside the office, the system needs to be web based and accessible outside the office. Consider if you want to use cloud based software for your performance management system. Many systems offer other capabilities and modules than just performance management and could be a part of your HRIS and total financial system software package.
- Ongoing feedback. The system should be designed to provide ongoing performance feedback throughout the year based on projects, time intervals, or at the employee or managers request. Therefore the system is always open and on. This will be a culture shift for many organizations as many only give feedback when it is needed or at set intervals in time. Giving real time feedback is not only a powerful motivational tactic for good and high performers, it will help an employee or manager who may be having some challenges. It is important to provide that feedback as soon as possible so it can be addressed without sacrificing additional work productivity losses and damage to internal and external clients.
- Reporting. The system should have robust data gathering and reporting capabilities for the evaluator, evaluate, and of course HR, to help monitor and track completion and other statistics for a particular group and the organization.
- Easy to interpret results. The system should have a dashboard where the manager and employee are able to view performance feedback and goals that are compiled and aggregated throughout the year. The dashboard should be able to track the number of “to do” tasks, what stage of completion they are in, and the date of the stage. Consider the interface of the design to feature simple graphics, colors, and analysis for a quick glace of reporting and statistics.
Ask yourself, what specifically do you want to measure, and who should be measuring it? Consider the following when deciding what to measure around performance.
- Performance on a project or in a cross functional group
- Customer impact
- Individual contributions
- Pro-bono or other volunteer work
- Attitude and ability to work and team with others
- Ability and drive
- Upward feedback
As mentioned employees should be able to ask for feedback in the system at any time on any measurable item and the system will trigger the evaluator responsible for providing the feedback. Employees need to be set up with responsibility evaluator(s) for each type of measurement and they should have the ability to do self-evaluations in the system.
Another item to consider is what type of rating scale do you want to use? Traditionally, companies used scales of 1-7, or something similar. Many companies are considering either doing away with the numeric rating, or making it a smaller part of the process. A numerical rating triggers a psychological response and people tend to focus only on the number and what the implications of that number may mean, and thus are not engaged fully in the conversation. An alternative could be to borrow from the color spectrum and use red as high performance, green as expected performance, and indigo as needs improvement. Some organizations are giving feedback without ratings with some early success. For other companies, foregoing measures would be counterproductive given the cultures they have built around measurement. This is where the ability to give and receive feedback is imperative to success! One of the challenges with measures is how the feedback is delivered more than the fact that performance is measured.
An example of the ratings shown on the dashboard could look something like this.
Some companies are beginning to use values-based ratings1. This is done by looking at how the employee fits in with the company values and aligns with company objectives. Other approaches are to design a system where the output is not only feedback on performance, but focuses more on giving advice and coaching and not just a final “rating”. You will want to look for a software vendor that has designed newer products that will be able to accommodate these non-traditional ways of measurement and delivering feedback and coaching.
Now that you have designed a system, how you will use it? What decisions will you need to make as a result of the process? Do you need to implement training? Are there performance issues with a particular group, or a particular manager? Is there a morale problem at the organization? A well thought out and designed performance management system will help your company answer all of these questions and more.
Finally, competencies are an area where many organizations design complicated frameworks by level, group, subsidiary, or other measures, in an effort to define every possible measurement of performance at every level. While that is admirable, even a well-designed system will be unsuccessful if the competencies being measured are too complicated or the forms are too lengthy. There is value at developing expectations of performance at all levels of the organization from staff to executives. The competencies should be progressive, meaning each level has mastered the competencies of the preceding level. Competencies need to be designed with examples of what high performance (red), expected performance (green), and needs improvement (indigo) mean at each level and for different categories such as client services, team work, attitude, etc. The competencies need to be designed to achieve organizational and individual goals. Competencies will be a topic in another blog series, so stay tuned!
In a future post we will also talk about how to plan employee development and discuss how it links to evaluation. Some organizations couple performance evaluation and development planning while others separate them. We will talk more about performance management next week.
To become a more innovative leader, please consider our online leader development program. For additional tools, we recommend taking leadership assessments, using the Innovative Leadership Fieldbook and Innovative Leaders Guide to Transforming Organizations, and adding coaching to our online innovative leadership program. We also offer several workshops to help you build these skills.
If you are interested in receiving our ongoing blog series or other articles by email, please sign up in the box on the right labeled Get Email Updates From Us
1 Predictions for 2015: Redesigning the Organization for a Rapidly Changing World, Bersin by Deloitte / Josh Bersin, January 2015
Photo credit: www.flickr.com William A. Clark