Renovate, restore, remodel – or tear it down?
A mid-sized manufacturing company, in business for over thirty years, was debating whether to continue to apply quick fixes to its performance management process... or rebuild it from scratch.
An analysis of the situation revealed several flaws:
- Managers, frustrated with the time it took to fill out the performance review paperwork for each and every employee they supervised, acknowledged that they often short-cut the process.
- Employees voiced concerns that more than half the items on the annual performance review checklists were "not applicable" to the jobs they were doing today.
- Senior leadership expressed concerns that key employees were departing and expressing, in exit interviews, general dissatisfaction with how pay and performance were linked.
In this case, an objective look at the issues indicated that there was very little, if any, linkage at all between the performance management process and the company's current strategy.
While each company's situation is unique, sometimes the most compelling action – as in this case - is to lay a new foundation. Rebuilding also has another added advantage: it can send a powerful message to employees that the organization recognizes that performance matters... and is doing something about it.
In very general terms, ten recommendations on starting anew follow:
- Articulate your strategy and get senior management buy-in on the implications the strategy will have on your overall talent needs.
- Identify the critical positions in the organization. While most organizations eventually will need a performance management system for all positions, starting with the most critical positions (and note, these are not necessarily positions of senior leadership) will speed the process in terms of linking performance management processes to performance improvement needs.
- Determine the key activities needed in these critical positions.
- Build a competency model or models for those critical positions (i.e. leadership, sales, etc.).
- Link competencies/behaviors to corporate goals.
- Reevaluate compensation to align incentives with the business strategy.
- Develop or build competencies into a solid performance management process and system.
- Train managers on the process.
- Communicate expectations to employees.
- Reward the right behaviors and correct inappropriate or wrong behaviors.