Managing Human Resources: Personnel and performance management

Any expert in 'human resources' (once simply known as 'personnel') can explain the importance for business results of 'interpersonal problems'. In simple non-jargon, getting on badly with others at work is a well-trodden path to business and personal failure.
To activate the dreaded problems, just be 'insensitive, manipulative, critical, demanding, authoritarian, self-isolating, or aloof', according to two of those HR experts. By the same token, adopting the opposite behaviour should achieve the magic aim: getting the best from those who work with and for you.
The key lies in the word 'authoritarian', a fault especially prevalent, it seems, in Europe. True-blue authoritarians never explain orders, expect those who receive commands to do exactly as they are told, ruthlessly punish failure and capriciously reward success - again without explanation.
Some of these tough nuts make fortunes: like Linda Wachner, the Warnaco textile tycoon, who once ordered a manager to head office and kept him waiting three days for a two-minute interview. Tom Watson, the founder of IBM, had similar rude habits ('They're well-paid,' he said when Tom, Jr. complained about the waiting minions). But so did the awful, disastrous Robert Maxwell.
Don't make the mistake of assuming that authoritarianism equates with success. Brutes might well do better with the anti-authoritarian methods of properly organised feedback, review and appraisal. In fact, one study of 437 companies showed spectacular before-and-after results from introducing this so-called 'performance management.'
Productivity soared by 94.2%, while the shareholders were better off by a quarter. The study's authors, though, report that the managers involved didn't think much of the procedures, rating them only 'slightly effective' or 'somewhat effective' in helping to achieve a company's ambitions. So what produced the bumper results?
The researchers, quoted in the Harvard Business Review, say that people need to know clearly what's expected of them: to be told clearly how they have lived up to expectations - or haven't: and, in the latter case, to discuss how to improve. Mismanaging subordinates, by ignoring this trio of needs, isn't going to help them, the mismanagers, or the business.
But there's a fascinating point about those expectations. Pitch them high. That doesn't mean setting impossible targets, but it does mean high rating of people's ability and potential. Do that, and you'll benefit from what Professor Dov Eden, who teaches at Tel Aviv University, calls 'the Pygmalion effect.'
To turn Eliza Doolittles into stars, try regarding them as such. Working with the Israeli military, Eden found that soldiers whose potential was rated 'high' received superior grades, and got more out of their training, than comrades whose rating, so their instructors were told, was only 'regular' or 'unknown'.
The catch was that the ratings were fictitous, entirely random. They plainly influenced the attitudes of the instructors, however. The same thing happens with managers and the managed. It's another proof of the old adage, 'Give a dog a bad name.' Give a dog a good name, though, and he becomes even better.
The crafty Eden arranged for soldiers to be told, again at random, that they had high potential for success. The blessed 'considerably' outperformed course members who believed themselves to be only average. In other words, if somebody is under-performing, maybe it's because they're underrated - by you and consequently by themselves.
That helps explain the irritating phenomenon, which every boss has experienced, of the man or woman who is sacked for under-performance, but proceeds to work wonderfully well elsewhere. Review, feedback and appraisal will help avert such waste, but you need something extra: reward
One school of thought pays more for performance against clear targets. Another advises paying extra only for super-performance. A third says that super-performance should be part of the expectation, and that bonus payments should only come from profit-sharing schemes. Whatever the system, the interpersonal success formula includes sharing that wealth.
Also, consider the virtues of another piece of jargon: 'upward appraisal.' Not only do subordinates get their performance reviewed, but so do the bosses - by the bossed. That should finally scotch the authoritarians who think that in all circumstances father knows best. He doesn't. --(ThinkingManagers)

Simple performance management

by John Ha

When you look at the overall talent management process, performance management is often an elusive target. While leaders conceptually agree that it is a good thing, it is generally viewed by most managers and employees as another worthless human resources process that wastes time and paper. Still, most leaders who "get it" understand that they must have some form of performance management system to continually advance their organization. Once we start down this road with a client, they all ask us for the same two things: They want a performance management process that is simple and doesn't require so much time that their managers won't do it.
Performance management doesn't have to be that hard. In fact, I think it's overdone at most companies. It can be very manageable as long as you think through the process and implement a system that makes sense with your organization's needs. This article summarizes the three major components of a performance management system. It's really a cycle that continues to build on itself. Just remember that when it comes to performance management, less can be more. You don't always need a 10- to 15-page form to document performance.
1) Employee goals and development: This is the first step and focuses on setting goals for both performance and individual improvement. Goals should be for both professional and personal purposes with specific timelines. The manager should commit to providing the necessary resources and support to achieve these goals. An example might be to obtain the Certified Maintenance and Reliability Professional (CMRP) designation within six months, with the manager making a commitment that the employee can attend at least one industry workshop or seminar during the course of the year.
2) Self-appraisal document: The second step should be a self-appraisal. This should be a simple form that allows each employee an opportunity to self-evaluate and "brag" about their past accomplishments. Unfortunately, managers and their employees aren't always on the same page when it comes to identifying successes and failures. A word of caution here: Some employees may not receive this step favorably. They may question why they should be the ones to document all of their great achievements. After all, wouldn't a good manager know about all of their employees' accomplishments? Depending on your culture, a self-appraisal may be an optional step.
3) Performance feedback document: This is the most difficult step because most people as managers do not enjoy giving negative feedback to their employees. That is why it is so common to have a staff that is pretty much average. Only the superstars and the worst performers are recognized. It's also the most time-consuming step, as managers should meet with their employees individually to discuss their performance. If you don't have managers who are willing to give honest feedback to their employees on their performance (whether or not they successfully met their goals and objectives) and devote the necessary time, the entire system will fail.
How often you go through this process really depends on the circumstances and is a judgment call. A good guideline is an annual review process with a mid-year check-up to see how an employee is progressing on their goals. It wouldn't be uncommon for those goals to be adjusted at mid-year based on shifting priorities.
The application is numerous. You should be able to use the performance management system to determine merit increases, bonuses, promotions, transfers, training plans and even terminations.
If you still don't buy into performance management, think about it as a form of predictive and preventive maintenance for your people. It's really nothing more than a tool to ensure your people are operating at their peak performance without unexpected failures. Sound familiar? While comparing people to machines is like comparing apples and oranges, there are some great lessons that can be applied to both. For example, when a machine fails, is it generally the machine's fault or is it because it wasn't operated or maintained properly? Now, apply that question to the failure of an employee to perform their job.
As I've said before, professionals in the field of reliability and maintenance should be the first to understand the importance of performance management because it's already in their school of thought. - (RP, Nov 07)

Motivating employees

Providing your employees with the right motivation and work environment to bring out their maximum potential and whole-person development (Part 1)

(CSB Ltd, Saturday, 29 September, 2007)

Managing your staff is not as simple as leading them to the pinnacle of success or improving their productivity. Good leaders should know how to bring out the best in their followers. Performance management is actually a new term for the old appraisal system where employee performance was regularly reviewed. Today, performance management focuses on ensuring that the organisation and all of its subsystems work together in an optimum fashion to achieve the results desired by the organisation. This is encapsulated in one of Human Resource's main objectives - meeting the company's needs by focusing on and developing employees' key strengths. Appraise, please Performance appraisals are essential for the effective management and evaluation of staff. Appraisals help develop individuals, improve organisational performance, and are then used for business planning. Annual performance appraisals enable monitoring of standards, agreeing on expectations and objectives, and delegation of responsibilities and tasks. Staff performance appraisals also establish training needs analysis and planning. The resulting data is fed into organisational annual pay and grading reviews, and coincides with business planning for the following trading year. Each individual's performance is reviewed against objectives and standards for the trading year, agreed at the previous appraisal meeting. There is increasingly a need for performance appraisals of all members of staff to include accountabilities relating to corporate responsibility. This is represented by various corporate responsibility concepts including the Triple Bottom Line (profit-people-planet); corporate social responsibility; sustainability; corporate integrity, ethics and fair trade. The organisation decides the level to which these accountabilities are reflected in job responsibilities, which would then feature in performance appraisals. Performance defined Performance appraisals have numerous benefits. To the individual staff member, they are essential for career and succession planning. Performance appraisals are relevant to staff motivation, attitude and behaviour development, communicating and striving to achieve organisational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individual's performance, and a plan for future development. However, while the appraisal outline is a formal structure, the development discussed with the employee shouldn't have to be formal and constrained. Appraisals must address 'whole person' development - not just job skills or the skills required for the next promotion. Nor should the appraisal discriminate against anyone on the grounds of age, gender, sexual orientation, race, religion or disability. Improvement is an integrated process One should note that because performance management strives to optimise results and aligns all subsystems to achieve the overall results of the organisation, any focus of performance management within the organisation should ultimately affect overall organisational performance management as well. According to some sources, performance management goes through the following steps: analysis, identifying competencies and key skills, and lastly, continued development and control of performance management systems. A common approach to assessing performance is to use a numerical or scale rating system whereby managers are asked to score an individual against a number of objectives/attributes set during the previous meeting.

In Search of Performance Management Solution

When the question of what Performance Management is and what it entails is asked in any organisation, there are as many answers and perceptions as there are people in the organisation. The Human Resources Department will tell you that Performance Management entails the training, mentoring and development of employees; Finance Department will tell that Performance Management is the measurement of a series of financial and non financial indicators; the IT Department will tell you that Performance Management is the “system” used to manage performance in an organisation. Though none of these perceptions are incorrect, they are only part of the truth.To complicate matters even further, numerous management methodologies have been introduced over the years, which all claim to be the silver bullet when managing performance. Concepts such as the Balanced Scorecard, Value Based Management, Total Quality Management and Six Sigma are commonplace in most managers’ vocabulary. Perhaps the starkest reality when attempting to sift through the information overload is not the lack of information and methodologies available to design and implement a performance management system, but the realisation that there is no silver bullet that can create a successful performance management system. Managers cannot delegate what is effectively their job to a “system”. To ensure the success of a performance management system, managers have to devote a significant amount of their time to the process. Often the success or failure of a performance management system has less to do with the chosen metrics and templates used for managing the system, and more to do with the honesty and rigor used in the process. All too often, performance management systems fail because they are either measurement systems, where little is done to interpret the results and take corrective action, or the system is simply delegated to the bottom drawer because it is cumbersome and managers have not bought into the process.A well-designed and implemented performance management system will ensure that there is open and honest communication between all layers of the organisation. It will ensure that managers have the authority to manage, while there is an assurance to their bosses that agreed levels of performance will be met. A good performance management system should focus not only on the achievement of a metric but also on the reasons behind the achievement or non-achievement of the metric in relation to a target. Unfortunately there is no magic formula for designing an effective performance management system, but there are a number of factors which differentiate between success and failure. Performance Management implementation either succeeds or fails, based on whether the management buys into the process. If a robust change management process does not run alongside the process of implementing performance management, it is bound to fail. Complete management buy-in at all levels is crucial to ensuring the success of the system. The change management process and associated training will ensure that a culture of value creation is instilled throughout the business. It is important for all employees to understand the concept of value creation as well as understanding how their decisions and actions influence value creation. This understanding can be achieved by top management members who consistently reinforce the importance of the value creation mindset in all their communication to the rest of the organisation. Ultimately the senior management must lead by example and walk the talk. Senior managers, who cut the budgets for employee development and training to meet short-term profit objectives, are unlikely to inspire a culture of long-term value creation among the members of their middle management team.Performance Management relies on measuring performance and on taking corrective action when the targets set for the performance metrics are not met. What is measured will ultimately impact on people’s behaviour, therefore it is important to ensure that due consideration is given to identifying the value drivers that define the short-term performance and long-term health of the business. It is important for managers to have a clear understanding about what the business’s value drivers are, as this will ensure that managers can understand and analyse the trade-offs required to balance short-term performance against long-term health. For example, reducing Research and Development costs may bolster short-term performance but could have disastrous consequences for the business in the long term. When identifying the priority value drivers, it is important to take the following into account:* Will focusing on the driver have a material impact on business performance* Does management have control over the factors which influence the driver, or do the external environment and asset constraints prevent them from having a meaningful impact?* Does the driver have any unintended consequences, such as managing inventory levels to the detriment of customer service?* Is the driver sustainable, or is it a one time cost reduction or synergy?Once these factors have been considered, the important value drivers can be ranked in order of priority, appropriate value metrics can be assigned to the drivers and they can be cascaded throughout the organisation. SMART target setting should ensure that the targets that are set are realistic but are also challenging. In short, targets should be specific, measurable, attainable, realistic and time-based. Targets must be based on the opportunities identified for improvement and any economic considerations. When setting targets, the following input should be borne in mind, namely the performance of similar companies in the same industry, the internal performance of business units, historical performance and blue-sky scenarios. Performance targets should include a base which should be regarded as the minimum level of acceptable performance, and a stretch target which should result in considerable rewards if it is met.Quarterly performance reviews should focus on the facts, using a scorecard as the basis for the discussion. Reviews should focus on the reasons for poor performance so that they do not recur, rather than on apportioning blame. Opportunities for employee development should be identified and implemented during the review process. The final consideration when designing and implementing an effective performance management system is to ensure that the top performers are adequately rewarded and recognised. Well-designed incentive schemes should differentiate between top performers and the rest of the organisation. Short-term rewards should be linked to the achievement of annual financial and non-financial measures, whereas long-term incentives should focus on rewarding long-term value creation and the long-term health of the business. The organisation’s top performers should also have abundant opportunities for non-financial rewards such as career advancement and development opportunities.Though performance management is an important tool for creating value in an organisation, its design and execution are complex and the best intentions are often shelved or sidelined. However, companies that are willing to invest in establishing a culture of value creation linked to effective targets, reviews and rewards, should definitely reap the rewards that a performance management system offers. It must however be reinforced that no matter how hard you look, there is no performance management silver bullet to be found.Leslie Yuill

When the question of what Performance Management is and what it entails is asked in any organisation, there are as many answers and perceptions as there are people in the organisation. The Human Resources Department will tell you that Performance Management entails the training, mentoring and development of employees; Finance Department will tell that Performance Management is the measurement of a series of financial and non financial indicators; the IT Department will tell you that Performance Management is the “system” used to manage performance in an organisation. Though none of these perceptions are incorrect, they are only part of the truth.To complicate matters even further, numerous management methodologies have been introduced over the years, which all claim to be the silver bullet when managing performance. Concepts such as the Balanced Scorecard, Value Based Management, Total Quality Management and Six Sigma are commonplace in most managers’ vocabulary. Perhaps the starkest reality when attempting to sift through the information overload is not the lack of information and methodologies available to design and implement a performance management system, but the realisation that there is no silver bullet that can create a successful performance management system. Managers cannot delegate what is effectively their job to a “system”. To ensure the success of a performance management system, managers have to devote a significant amount of their time to the process. Often the success or failure of a performance management system has less to do with the chosen metrics and templates used for managing the system, and more to do with the honesty and rigor used in the process. All too often, performance management systems fail because they are either measurement systems, where little is done to interpret the results and take corrective action, or the system is simply delegated to the bottom drawer because it is cumbersome and managers have not bought into the process.A well-designed and implemented performance management system will ensure that there is open and honest communication between all layers of the organisation. It will ensure that managers have the authority to manage, while there is an assurance to their bosses that agreed levels of performance will be met. A good performance management system should focus not only on the achievement of a metric but also on the reasons behind the achievement or non-achievement of the metric in relation to a target. Unfortunately there is no magic formula for designing an effective performance management system, but there are a number of factors which differentiate between success and failure. Performance Management implementation either succeeds or fails, based on whether the management buys into the process. If a robust change management process does not run alongside the process of implementing performance management, it is bound to fail. Complete management buy-in at all levels is crucial to ensuring the success of the system. The change management process and associated training will ensure that a culture of value creation is instilled throughout the business. It is important for all employees to understand the concept of value creation as well as understanding how their decisions and actions influence value creation. This understanding can be achieved by top management members who consistently reinforce the importance of the value creation mindset in all their communication to the rest of the organisation. Ultimately the senior management must lead by example and walk the talk. Senior managers, who cut the budgets for employee development and training to meet short-term profit objectives, are unlikely to inspire a culture of long-term value creation among the members of their middle management team.Performance Management relies on measuring performance and on taking corrective action when the targets set for the performance metrics are not met. What is measured will ultimately impact on people’s behaviour, therefore it is important to ensure that due consideration is given to identifying the value drivers that define the short-term performance and long-term health of the business. It is important for managers to have a clear understanding about what the business’s value drivers are, as this will ensure that managers can understand and analyse the trade-offs required to balance short-term performance against long-term health. For example, reducing Research and Development costs may bolster short-term performance but could have disastrous consequences for the business in the long term. When identifying the priority value drivers, it is important to take the following into account:* Will focusing on the driver have a material impact on business performance* Does management have control over the factors which influence the driver, or do the external environment and asset constraints prevent them from having a meaningful impact?* Does the driver have any unintended consequences, such as managing inventory levels to the detriment of customer service?* Is the driver sustainable, or is it a one time cost reduction or synergy?Once these factors have been considered, the important value drivers can be ranked in order of priority, appropriate value metrics can be assigned to the drivers and they can be cascaded throughout the organisation. SMART target setting should ensure that the targets that are set are realistic but are also challenging. In short, targets should be specific, measurable, attainable, realistic and time-based. Targets must be based on the opportunities identified for improvement and any economic considerations. When setting targets, the following input should be borne in mind, namely the performance of similar companies in the same industry, the internal performance of business units, historical performance and blue-sky scenarios. Performance targets should include a base which should be regarded as the minimum level of acceptable performance, and a stretch target which should result in considerable rewards if it is met.Quarterly performance reviews should focus on the facts, using a scorecard as the basis for the discussion. Reviews should focus on the reasons for poor performance so that they do not recur, rather than on apportioning blame. Opportunities for employee development should be identified and implemented during the review process. The final consideration when designing and implementing an effective performance management system is to ensure that the top performers are adequately rewarded and recognised. Well-designed incentive schemes should differentiate between top performers and the rest of the organisation. Short-term rewards should be linked to the achievement of annual financial and non-financial measures, whereas long-term incentives should focus on rewarding long-term value creation and the long-term health of the business. The organisation’s top performers should also have abundant opportunities for non-financial rewards such as career advancement and development opportunities.Though performance management is an important tool for creating value in an organisation, its design and execution are complex and the best intentions are often shelved or sidelined. However, companies that are willing to invest in establishing a culture of value creation linked to effective targets, reviews and rewards, should definitely reap the rewards that a performance management system offers. It must however be reinforced that no matter how hard you look, there is no performance management silver bullet to be found. - by Leslie Yuill

Microsoft rolls out performance management BI software

September 19, 2007 (Computerworld) -- Microsoft Corp. today announced that its has begun shipping Office PerformancePoint Server 2007, which it said will allow companies to use a single tool to monitor, analyze and plan business operations. The performance management application can be used to develop strategies and set goals that can be expressed as metrics and key performance indicators, Microsoft said. Users across a company can access data compiled by the application, and monitor their performance against the metrics, through familiar Office tools like Excel, it said. "Customers have spent hundred of billions of dollars over the past 15 years for ERP, supply chain management [and] sales force automation," said Jeff Raikes, president of Microsoft's business division. "But how can that be channeled to deliver better insight? BI is really only used by 10% or fewer information workers today." Raikes compared the state of business intelligence today to the status of word processing 20 years ago, when only a select few workers had access to the software. Today, he said, only a company's "high priests of data" have access to BI and analysis tools. "Our vision is to bring the powerful capability of BI to all information workers ... to democratize access to critical business insight," he added. "We will revolutionize the economics of BI by making broad deployment possible through a low per user price point. Microsoft ... will bring BI capabilities to 10 times the number of information workers because we deliver BI exactly where they are working every day." During a conference call announcing the software, Ulf Hilton, group finance manager of Oticon, a Danish hearing-aid company, said that his company expects to go live with PerformancePoint in February 2008. Oticon opted for PerformancePoint because it would offer corporate performance management tools companywide and because it lets users access data through the familiar Excel interface, he said. "All our finance people who are contributing to this system use Excel daily," he said. "Excel's existence cannot be eliminated." In addition to making end users happy, PerformancePoint's support for Excel ensures data integrity and version control, he said. The Excel support should also allow the company to continue using its various homegrown Excel budgeting and reporting modules, he added.