Performance Management Framework
Most agree the success of any company flows directly from the quality of each employee’s performance in completing their job, e.g. getting new clients and making sales.
We know exceptional performance is fickle, it must be nurtured, motivated and directed where needed.
Knowing this, why has the performance review process become a burden for line managers and not the central part of their role?
If employees are the lifeblood of a business – why is performance management not more important? Why do line managers and employees often treat performance management as an afterthought, something to do after the ‘real work’ is finished for the day.
“Edgeview has a distinctive and effective style in working with me to sharpen my focus on value creation, develop unique strategies and build our management capabilities to maximise value”
However, line managers view performance management as time-consuming, excessively subjective, demotivating, and ultimately unhelpful.
This can be true, but it does not have to be the norm.
Rethinking Performance Management
It is performance management that dictates the level of performance in which an organisation – produces, builds, prospects closes, makes sales and services clients.
Therefore, neglecting, or overly delegating the performance management process, is problematic because:
- Over time, the focus shifts to the process, not on the quality of discussions and outcomes;
- Leadership teams delegate their responsibilities to line managers who do not have the motivation, ability or training to engage in effective performance conversations;
- Line managers are not willing or able to assess and differentiate performance objectively;
- Line managers and employees see performance management as a ‘box-ticking’ exercise;
- Poor performers remain in the system with ‘good performance’ ratings because line managers prefer to avoid conflict;
- Good performers realise their talent will not be recognised, and because there is an artificially high number of ‘good performers’ the bonus pool is diluted; and
- Line managers do not prioritise performance management conversations and feedback.
Rethinking Performance Compensation
Performance management must be the central pillar of the leadership team’s mandate because all revenue depends on the ‘top performance’ of line managers and their employees.
To achieve a competitive advantage from a workforce that is actively engaged, there must be a focus on:
- Rewarding the integrity and responsibility of line managers to excel at performance management month after month – not once or twice a year;
- How to envision, create, sustain and measure an effective remuneration strategy;
- Adopting a pay philosophy that matches the leadership team’s governance responsibility and growth aspirations;
- How to ensure the business has the right balance between wages and bonuses (why it pays to go the extra mile);
- Why it’s critical to define value creation for the business; and
- What a complete and compelling pay strategy looks like for the long term
Together we agree on a process for line managers to recognise the impact of performance management on both individual and business performance.
We switch their energy and the focus to ensure they get performance management right. Moreover, as line managers deploy the change, they keep the enhanced performance-management system in mind and ensure that employees align with its vision.