Designing effective performance management systems: Best practices and strategies

Today, we conclude a five-part series on one of our highly recommended strategies for driving a culture of peak performance – The Evolution of Performance and Impact Measurement. Previously, we discussed Performance Management Systems as a Catalyst for Continuous Improvement and How To Implement Effective Performance Management Systems.

No two organisations are the same. Whilst there may be a great deal of similarities in the broader sense, the specific variables are always distinct. The objectives may be similar but the methodology cannot be parallel. In designing effective performance management systems, leaders must take into account the similarities and differences, points of convergence and divergence, assets and liabilities, strengths and weaknesses, opportunities and threats that the organization is exposed to.

The strategic design of a performance management system is critical because if the fundamentals are flawed, the outcomes will inevitably be flawed. It’s like trying to use a crooked stick to draw straight lines. It becomes even more critical for large organizations where they are much complex spans of control. Overall, the following themes must be represented in designing an effective performance management system

A. Clearly Defined Expectations
In jurisprudence, it is said that “where there is no law, there is no sin”. This means amongst other things that as leaders, we cannot hold a person to account for a task we didn’t intentionally assign to such person. There are many cases where employees take initiative and do things without being asked; whilst that is great – it should be the exception and not the rule. The overarching corporate vision of an organization should ensure that tasks are assigned to a person, a team, a department, or a board. This allows everyone on the team to channel their creative energies to achieving those objectives. Setting expectations should be done in concert with each responsible officer to orient them not only on what drives productivity but the why the responsibility is critical to the vision of the organization. The metrics of success should also be clearly spelt out so that everyone can constantly undertake a self-assessment and take cognisance of any departure from the agreed objectives. These expectations should be firm enough to instil accountability yet flexible enough to accommodate exigencies.

B. Ensure Periodic Monitoring
After specifying expectations, assignments and projects should be monitored regularly. Intermittent interventions and interrogation should be a feature of effective performance management systems. This is where leaders move from what is expected to what is inspected. From experience, it’s not always what is expected that gets done but what is inspected. Monitoring isn’t mere observation, it’s involves providing feedback, conducting interviews to ascertain the other person’s point of view and comparing interim results with expected objectives to know whether to continue, pivot or abort the task. Monitoring on the one hand is to minimize liability and on the other hand to regulate behaviour. Many successful organizations don’t allow the mass production of commodity without achieving a minimum viable product. A minimum viable product is achieved when management has monitored the dynamics of a product and is satisfied that it can be presented to its external stakeholders, especially the customers.

C. Meet Employees’ Developmental Needs
An ineffective approach to leadership is to demand productivity without addressing the developmental needs of the employee. Training, promotion, provision of necessary tools and information are responses to a developmental need. Laziness stems from an unwillingness to perform a task but incompetence is the inability to perform the task. It is possible for an employee to have the willingness to be productive but lack the ability to be productive. That is why training is an indispensable feature of any effective performance management system to improve competence levels. A performance management system should not take a punitive approach but a partnership approach that makes the leader just as interested in the productivity and progress of the team member.

D. Conduct Appraisals
Appraisals are a more formal, detailed and objective feedback. It’s not just conversations but an attempt to represent productivity in qualitative or quantitative terms. This makes leaders use performance management systems to regularly provide assessments to the employee. It’s for evaluation as it is for comparison. It helps to know which employees are putting in the work and getting with the programme. It also helps management know if a particular employee is improving against their previous output by juxtaposing employee results and drawing a graph of their performance. Appraisals explain the correlation between outcomes and expectations, it’s a summary of how an employee’s actions have contributed to an organization’s corporate vision.

E. Implement A Fair Reward System
Hopefully, the appraisals show that an employee is productive – when that is the case, there must be an intentional and significant reciprocity towards that person from management. Desirable behaviour and outcomes should be reinforced so that the benefits that accrued from it serves as motivation for an employee. These rewards can both be formal and informal such as promotion, increased salary or bonus, paid vacations, awards, a commendatio n letter, a public acknowledgement of performance like the employee of the month or year, contract renegotiation etc. The reverse is also true, a performance management system is used by leaders to identify underperforming or grossly unproductive employees.

Growth Opportunities
To further position your leaders for peak performance, you can download a free copy of the latest edition of The Peak Performer Magazine You can also enrol your Mid-level Leadership Team for the Made4More Accelerator Program and your Senior Leadership Team for the Dr. Abiola Salami International Leadership Bootcamp MOMBASA 2024 We also have an upcoming training for leaders in public service

About Dr. Abiola Salami
Dr. Abiola Salami is the Convener of Dr Abiola Salami International Leadership Bootcamp and The Peak PerformerTM. He is the Principal Performance Strategist at CHAMP – a full scale professional services firm trusted by high performing business leaders for providing Executive Coaching, Workforce Development & Advisory Services to improve performance. You can reach his team on [email protected] and connect with him @abiolachamp on all social media platforms.