Performance Management : A Myth

October 23, 2013


When dealing with such an exciting topic as performance management one has to wonder what specifically in this article is going to be of interest to the reader, or are we talking about the same old challenges that have been facing management and HR professionals for years.

As defined in Wikipedia (at my age I often wonder what ever happened to Webster’s): “Performance Management is known as a process by which organizations align their resources, systems and employees to strategic objectives and priorities.”  Is that true? The ultimate goal of introducing a performance measurement system is to improve organizational performance. Sounds good, but does this really happen?  Or is the data collected in traditional performance appraisals interpreted to enforce old opinions and not necessarily create new.  Are we implying that if employees are not managed….they do not perform?

Studies have proven that organizations with effective performance management processes in place consistently outperform those without such systems. The goal is a comprehensive performance management system that links the Company’s and the individual’s objectives to the desired outcomes.

The old style of goals and objectives set by management and agreed to by employees is no longer the measure of success or failure. Nor are, as in more recent years, the development of  ‘competencies’ against which performance is measured and which may or may not truly impact the bottom line of the organization or attain its goals. These annual, in some cases eleven or twelve page, ‘report card’ style reviews cause disruption, anxiety and end up de-motivating team members and managers. Managers don’t like giving them and employees don’t like receiving them.  History shows that a rigid system regulated by senior management – that report card approach – tends to dampen employee initiative, rather than empowering or encouraging them to focus their efforts and strengths on initiatives that ensure the organization achieves its goals.  Over time a culture of performance measurement starts to emerge: employees blindly following what they are measured and rewarded on, often at the expense of the company’s success.

To avoid this vicious cycle, organizations need to involve people as much as possible during the design and implementation of a new system, carefully monitor its use, and introduce rewards. But first we need a clear understanding of what exactly it is we are trying to achieve. The goal of linking performance management with the annual corporate business planning process establishes targets for improvement and focuses on individual, departmental and corporate plans and measurement tools which are designed specifically to achieve organizational goals. It also assures that all employees understand and share the vision and goals. It is that perfect match between creating a culture that encourages great performance and is focused on the organization’s success.

In a recent award, we were contracted by a local Municipality to design a performance management process that stretched our creativity to the max.  Darren Ottaway, CAO of the Town of Pelham in Southern Ontario is like no other bureaucrat.  His big picture thinking and creative approach pushes everyone around him to stretch that little bit further and try things that have never been tried before. Phrases like, ‘tried and true’ and ‘the way we have always done it’ are not acceptable in Ottaway’s vocabulary. He is committed to making the Town an employer of choice, with a strong, focused workforce driven to achieving Council’s strategic vision.  They had recently adopted a new innovative approach to problem and goal setting. Moving forward wanted to replace the traditional review structure with a more lightweight, continuous model, fostering trust between employees and management while addressing employees’ needs to enhance their own development and work toward their strengths. We were challenged to create a model that made employees want to contribute, to learn, to support one another, to take pride and have fun in what they did, while ensuring the municipality’s goals were met.

Critical to Ottaway was ensuring support for the new process by the entire management group, all employees, and Council.  Initially a task force of seven employees, representative of each department, was struck.  A meeting was held to determine what employee’s essential components were in a Performance Management process.  Views varied enough that it was decided to open the discussion to all employees and a half day total staff meeting was dedicated to the subject. Every employee was given the opportunity to share their views on what the program needed to look like for it to be supported.

The result was the foundation of a model that needed to be based on the following: eliminate mediocrity; ensure alignment with the strategic plan; promote fairness, treat employees equally but different; provide a platform that ensures a safe and open dialogue; and align rewards with great performance.

The challenges that were identified included the development of a measurement tool that treated hourly employees and salaried employees fairly and equally, that built a reward system that was achievable within the current budget and supported by Council.  As the responsibility fell heavily on the shoulders of the management group, it was imperative to success that we design a training and coaching program that supported the management team and the project. The Principle and Value Statement for the Town of Pelham clearly identifies Respect, Communication, Professionalism, Teamwork and Innovation as core values.

Solutions included developing a measurement tool that benchmarked performance against the values of the organization, and as such could be the same but different for the two different employee groups. The recommendation was to launch a one year pilot project that includes monthly progress reviews with a training and sharing component, and quarterly coaching meetings with Managers with an external coach to help guide the process. Annual ‘planning meetings’ as opposed to ‘performance reviews’ are based on the establishment of a one page plan that outlined for each employee, the ‘Me’ goals – personal development goals for the year, “My Department” goals – the departmental goals based on the operational plan, and the strategic priorities which were highlighted under the “My Town” goals.  The result is a positive discussion between employee and Manager reviewing the individual plan moving forward over the next twelve months. Monthly departmental goals are monitored and when required adapted to change. Rewards are based on incentive pay increases and a budget allocated for each manager to celebrate small departmental successes.

An exciting change in the way performance is managed, and mediocre employees are motivated and held accountable to set goals and achieve recognition and reward.  Ottaway is launching the pilot project in January 2014 and has strong support from Council and staff, so it made sense that the measurement tool developed for both hourly and salaried staff, although different, measured contributions in those areas.