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April 1, 2002 Issue

How Can I Use Our Employees to Reinvent Our Performance Management System?

Most organizations invest an enormous amount of time and energy developing, revising, communicating, and implementing performance management programs, only to find they have little or no organizational impact.

Typically, time spent defining job specific accountabilities, organization based values, and personal goals results in little or no improvement in a business unit's contribution to the overall success of an organization.

We review information with employees, train managers on the system, punish those not in compliance, and then move on to another system that will remedy the ills of the current system. And yet, the new system doesn't. What's wrong?

Here are some telltale signs of performance management program failure and success.

When a failure, the program is an obligatory process mandated by policy and penalties. It is not viewed as an integral part of employee management. When a success, managers and employees accept the process as part of career development and a critical part of organizational success.
When a failure, there is more concern on filling the form out correctly and on schedule then the impact the performance discussion has on the employee. When a success, the emphasis shifts to ongoing feedback and regular interaction on what managers and employees require of each other to run the business successfully.
When a failure, management and policy drive the entire process with little or no input from employees. When a success, employees drive the system by being held accountable for developing performance standards and action plans.
When a failure, what is measured has little or no relation to the strategy and objectives of the business. When a success, employees are educated on their role in the organization's success. Personal goals and job objectives are set based on contribution to the organization's success.
When a failure, performance indicators and measures result in few innovations for organization improvement. When a success, the performance system recognizes employees who take risks and offer innovative but realistic suggestions and ideas impacting the success of the organization.
When a failure, investment of time and technology results in little improvement in overall business success. When a success, systems are continually audited and modified to meet changing requirements of managers, employees, and the organization. The "static" performance system disappears.
When a failure, the performance program has inconsistent application in the organization. When a success, one form of inconsistency, modification for business unit needs, is encouraged. The elimination of inconsistent management behavior, i.e. lack of interest, is crucial to success.

The key to addressing these issues is employee education on how the organization operates, what must happen to be successful, and what the employee's role is in making this a reality. Employees need to first understand why the organization exists. To accomplish this, we return to the Balanced Scorecard outline of organizational strategy.

Financial Success: Employees need to understand the financial workings of the organization. They need to understand how revenue is generated and spent. This communication needs to be more than an article in the employee newsletter or annual report. The financial information needs to be explained in relevant terms, focusing not only on the organization as a whole but also on the employee's particular business unit.

Customer Success: Employees need to understand who the customers are that the organization and its products / services are focused on. They need to understand the customer-related behaviors expected of them as part of the organization and business unit team. If the focus is on internal customers, employees need to understand their role in supporting each other for the overall success of the organization.

Growth: Employees need to understand what the organization and business unit expects of them in terms of growing or improving its services and products to remain competitive in the future. What innovations can they make to existing processes? What competencies will be required to be in a position to offer such innovations? What is the employee's responsibility in developing these competencies for the future?

Quality: What role does the employee play in the quality of the services and products offered? How much attention should be placed on skill and competency to contribute to quality objectives? How much emphasis is placed on productivity versus quality? What can employees do to ensure quality objectives are met?

With this education in place, the next step is to redirect the accountability for ownership of the performance measurement system from the organization and management to the employees. Most organizations require managers or Human Resources to set performance standards and objectives with little or no input from the employees. While many have moved to "self-evaluations" as a way to increase employee involvement, there has been little change in the level of employee contributions. Employees, as their managers have found, can get confused or frustrated because they are forced to focus on "words" in the form to determine performance levels.

While there are still legal and / or regulatory reasons, such as ADA or JCAHO, to have a structured evaluation process, there is an alternative that allows for more employee interaction and accountability to better focus employee efforts. This alternative allows employees to discuss expected contributions upfront with management and to provide examples of their contributions at review time.

This can be accomplished in a one-page two-sided form. The ability to use an abbreviated form assumes that employee education and involvement have been accomplished and encouraged along the way. The form focuses on three sections. The first is the employee's expectations and accomplishments in contributing to the organization's balanced scorecard. The second focuses on the employee's expectations and accomplishments in terms of their specific position. The third addresses the employee's expectations and accomplishments as related to personal performance improvement or career growth.

If you would like a sample document that could be used in this process, e-mail Michael Maciekowich at michaelm@astronsolutions.com. Please include the phrase "Performance Sample" in the subject line of your e-mail.

The key to making performance management an employee owned process is shifting accountability for the process from management to employees. Instead of being told what is expected in their job, employees should be encouraged to discover how they can contribute to the success of the organization. They should be held accountable not for just understanding their job, but for understanding the workings of the organization and their role in it.

Management and Human Resources must take a more active role in educating employees about the organization, not communicating vague goals and values that hold little meaning to employees

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ISSN Number 1549-0467