Somehow or other, the HR function has “stolen” Performance Management!
The Chartered Institute of Personnel and Development (CIPD), for example, writes on its website, “Fully realised, performance management is a holistic process bringing together many of the elements that make up the successful practice of people management including, in particular, learning and development”
Well, NO actually!!
Actually, fully realised, Performance Management is an organisation-wide and fully integrated system for:
- defining the business direction and strategy to achieve it (using Strategy Mapping wherever possible);
- detailing the work that needs to be done (action planning) to deliver the strategy;
- defining the key performance indicators that will measure its achievement;
- cascading the strategy into people’s individual objectives;
- systematically reviewing and analysing performance against the key performance indicators and business and personal objectives;
- using the performance review to plan for performance improvement at every level of the organisation;
- providing coaching and mentoring for individuals to help them improve.
HR seems to have grabbed all of the points about individuals and made it into an industry but it’s a very limited part of the whole. As a consequence, the full power of performance management to transform the culture of the business has all too often not been fully realised.
In fact, the Chief Executive owns the Performance Management System – when properly designed and implemented, the Performance Management System is the highest level process in the business. It gives the senior management team the ability to:
provide direction for people, from the C-Suite down, on the key issues on which they need to focus their attention, if they are to make a dramatic and sustained improvement in customer satisfaction and the performance of the business;
receive data on performance that can be used to identify strategic improvement priorities and monitor ongoing performance both at the level of the whole system, sub-systems and the level of the individual;
create the foundation on which leaders can create a fundamental change in culture from laissez-faire into high performance;
use performance data as the basis for making better decisions.
On the basis of research undertaken for Nestle, we propose that this system, when fully optimised, will comprise seven key components and these are:
- A robust Business Planning Deployment process that will ensure effective business planning from the top down, right into the development of individual objectives;
- A highly developed Programme Management resource and process for managing implementation and ensuring dynamic and effective execution;
- A well-defined programme of process improvement aimed at delivering intensive customer focus and operational excellence and based upon lean six sigma;
- The development of individuals based upon a systematic review of individual performance against agreed objectives;
- Ongoing coaching and mentoring of all leaders by their own bosses;
- An ongoing review of the organisation’s talent pool and effective succession planning;
- An effective system for rewarding people for their contribution to improving the performance of the system as a whole.
Putting such a set of components in place will take time, not least because they do require a change in culture as well as in process.
The graphic below envisions the implementation of these and other elements, as they might be developed and implemented over an appropriate time period:
Setting out to build and implement a systematic, whole organisation approach to performance management like this will deliver the performance that you have always dreamed of – anything less, you will make progress but you will always struggle.
In a following blog, we will describe how the organisation progresses through these phases and the leadership transformation needed to make it happen.
If you would like to hear more about how Four Pillars goes about helping our clients to develop a high performance organisation, subscribe to this blog for more reflections on strategy and business transformation, or simply phone or email Michael Simmons who will happily guide you through the journey.