SECTION: PEOPLE

304091211 Putting a Staff Performance System in place and setting Staff Performance Standards

Published: 04.09.2012 |
Last Updated: 27.05.2013
Deirdre McConville
Deirdre McConville
Deirdre McConville

Deirdre is an experienced senior management coach and internal HR consultant, with over 10 years strategic level experience in all key areas of Human Resource Management, in Ireland, UK and Europe.      

What is Performance Management?

Performance management is a continuous process of identifying, measuring and developing performance in Organisations by linking each individual’s performance and objectives to the Organisation’s overall mission and goals.
Performance Management Systems
A performance management system is the process/tool an Organisation uses to measure performance.
If the management performance system in your place of work is informal and unclear, it is likely to be the reason behind staff performance problems.
Implementing a well-designed performance management system has many advantages. 

Good systems ensure that:-
• Management expectations are met
• Managers can clarify their performance expectations to staff. 
• Staff get the opportunity to enhance their own performance
For an Employee, a good performance system:-
• Increases motivation and self esteem
• Enhances job performance
• Clarifies job tasks and duties
• Provides development opportunities and self analysis
From the perspective of the Manager, a good performance management system allows them:-
• To get a good insight into what motivates their staff
• To communicate Organisational goals more clearly
• To differentiate between good and poor performers
• Drive Organisational change.  

The consequences that can arise from the poor design and implementation of a performance management system can affect all parties involved – Employees, Managers and the Organisation as a whole. 

A performance management system is the key factor determining whether an Organisation can manage its human resources and talent effectively.  Performance management provides information on who should be trained and in what areas, which Employees should be rewarded (if linked), and what types of skills are lacking in the Organisation.  Therefore, performance management also provides information on the types of Employees who should be hired.  When implemented well, performance management systems provide critical information that allows Organisations to make sound decisions.

4 Step Process for Performance System Development
(Noone,  Leon – “Staff Performance Secrets”)
1. Specify the exact results/performance you want.
2. Specify the starting conditions e.g. materials, time frames, service standards equipment.
3. State how you know that the results have been achieved.
4. Describe the steps to be followed to move from step 1 to step 3 using step 2.

General Measures
Performance standards should be objective, measurable, realistic, and stated clearly in writing (or otherwise recorded).  The standards should be written in terms of specific measures that will be used to appraise performance.  General guidelines used to measure Employee performance include the following:-
• Quality – How well the work is performed and/or how accurate or how effective the final product is.  Quality refers to accuracy, appearance, usefulness, or effectiveness.
• Quantity – How much work is produced.  A quantity measure can be expressed as an error rate, such as number of percentage of errors allowable per unit of work, or as a general result to be achieved.  When a quality or quantity standard is set, it should be high enough to be challenging but not so high that it is not really achievable.
• Timescale -  Are deadlines in place? Outline by when and by what date work is to be produced.  This again must be realistic.
• Cost effectiveness – addresses performance within a set budget.  Standards that address cost-effectiveness should be based on specific resource levels (money, resources, time) that generally can be documented and measured.
Performance expectations must be about the individual, not the team or the business.
Ensure the performance standard is relevant to the Employee’s job and is within the Employee’s control.  This may seem intuitive, however some businesses adopt a one size fits all approach to creating performance standards and as a result everyone in a certain job classification has the same set of performance standards.
Employee Motivation
Motivating people is a challenge, one that is helped by developing performance standards that are motivational. You can ensure that your performance standards are motivating by avoiding these common mistakes;
• Standards are too soft - If the standards are too soft your people will have no need to stretch, you will quickly find that no one is motivated to achieve soft targets.
• Too much of a stretch - If your people do not believe that they can achieve their goals, they will not be motivated to try.
• Measures are too complicated - All too often measurement systems are too complicated and not understood by the Employees that they are designed to measure.
If your people do not understand how they are being measured you will not be able to motivate them to achieve the required level of performance.
Sometimes Managers do not adequately communicate the performance measures to their people. Whilst they may communicate the performance standards once at the beginning of the year, they often do not revisit the measures and current results throughout out the year.
Reinforcement is required to ensure your people understand their measures, and how they improve their results.

Benefits of Performance Management Standards
• They tell you how well the Employee is progressing towards achieving goals
• They guarantee that you’ll know when goals have been achieved
• They significantly reduce stress for Managers and Employees
• They clarify exactly what you expect from staff
• Employees know precisely what the Manager regards as most important
• Employees know just how their performance will be measured
• Standards provide many opportunities for positive reinforcement of Employees’ work
• They provide key information to enable Managers to make better decisions
• Managers can take prompt action when standards aren’t being met
• They remove the need for close supervision
• They help in managing poor performers

Whilst a lot of work is involved in the design and implementation of a robust performance management system, let’s not forget the impact, a successful system will have on the Organisation, the Manager and the Employee.  Instill confidence and ownership into your staff and always ensure that you acknowledge the achievement of set standards.  If you don’t, all that hard work may be for nothing.

Reap what you sow. 
 

My Top Tips
Top Tips
1
Be clear on your performance expectations
2
Know what your Employees are thinking
3
Understand how to set performance management standards
4
Invest the time then reap the rewards
Suggested reading
1
Performance Management (Developing People & Performance)
by Frank Scott – Lennon & Fergus Barry
2
Key Performance Indicators
by David Parmenter
3
Performance Management
by Robert Bacal
SECTION 2: PEOPLE

304091211 Putting a Staff Performance System in place and setting Staff Performance Standards

Published: 04.09.2012 |
Last Updated: 27.05.2013
Deirdre McConville
Deirdre McConville
Deirdre McConville

Deirdre is an experienced senior management coach and internal HR consultant, with over 10 years strategic level experience in all key areas of Human Resource Management, in Ireland, UK and Europe.      

My Top Tips
My Top Tips
My Top Tips
1
Be clear on your performance expectations
2
Know what your Employees are thinking
3
Understand how to set performance management standards
4
Invest the time then reap the rewards
Suggested reading
Suggested Reading
Suggested Reading
1
Performance Management (Developing People & Performance)
by Frank Scott – Lennon & Fergus Barry
2
Key Performance Indicators
by David Parmenter
3
Performance Management
by Robert Bacal

What is Performance Management?

Performance management is a continuous process of identifying, measuring and developing performance in Organisations by linking each individual’s performance and objectives to the Organisation’s overall mission and goals.
Performance Management Systems
A performance management system is the process/tool an Organisation uses to measure performance.
If the management performance system in your place of work is informal and unclear, it is likely to be the reason behind staff performance problems.
Implementing a well-designed performance management system has many advantages. 

Good systems ensure that:-
• Management expectations are met
• Managers can clarify their performance expectations to staff. 
• Staff get the opportunity to enhance their own performance
For an Employee, a good performance system:-
• Increases motivation and self esteem
• Enhances job performance
• Clarifies job tasks and duties
• Provides development opportunities and self analysis
From the perspective of the Manager, a good performance management system allows them:-
• To get a good insight into what motivates their staff
• To communicate Organisational goals more clearly
• To differentiate between good and poor performers
• Drive Organisational change.  

The consequences that can arise from the poor design and implementation of a performance management system can affect all parties involved – Employees, Managers and the Organisation as a whole. 

A performance management system is the key factor determining whether an Organisation can manage its human resources and talent effectively.  Performance management provides information on who should be trained and in what areas, which Employees should be rewarded (if linked), and what types of skills are lacking in the Organisation.  Therefore, performance management also provides information on the types of Employees who should be hired.  When implemented well, performance management systems provide critical information that allows Organisations to make sound decisions.

4 Step Process for Performance System Development
(Noone,  Leon – “Staff Performance Secrets”)
1. Specify the exact results/performance you want.
2. Specify the starting conditions e.g. materials, time frames, service standards equipment.
3. State how you know that the results have been achieved.
4. Describe the steps to be followed to move from step 1 to step 3 using step 2.

General Measures
Performance standards should be objective, measurable, realistic, and stated clearly in writing (or otherwise recorded).  The standards should be written in terms of specific measures that will be used to appraise performance.  General guidelines used to measure Employee performance include the following:-
• Quality – How well the work is performed and/or how accurate or how effective the final product is.  Quality refers to accuracy, appearance, usefulness, or effectiveness.
• Quantity – How much work is produced.  A quantity measure can be expressed as an error rate, such as number of percentage of errors allowable per unit of work, or as a general result to be achieved.  When a quality or quantity standard is set, it should be high enough to be challenging but not so high that it is not really achievable.
• Timescale -  Are deadlines in place? Outline by when and by what date work is to be produced.  This again must be realistic.
• Cost effectiveness – addresses performance within a set budget.  Standards that address cost-effectiveness should be based on specific resource levels (money, resources, time) that generally can be documented and measured.
Performance expectations must be about the individual, not the team or the business.
Ensure the performance standard is relevant to the Employee’s job and is within the Employee’s control.  This may seem intuitive, however some businesses adopt a one size fits all approach to creating performance standards and as a result everyone in a certain job classification has the same set of performance standards.
Employee Motivation
Motivating people is a challenge, one that is helped by developing performance standards that are motivational. You can ensure that your performance standards are motivating by avoiding these common mistakes;
• Standards are too soft - If the standards are too soft your people will have no need to stretch, you will quickly find that no one is motivated to achieve soft targets.
• Too much of a stretch - If your people do not believe that they can achieve their goals, they will not be motivated to try.
• Measures are too complicated - All too often measurement systems are too complicated and not understood by the Employees that they are designed to measure.
If your people do not understand how they are being measured you will not be able to motivate them to achieve the required level of performance.
Sometimes Managers do not adequately communicate the performance measures to their people. Whilst they may communicate the performance standards once at the beginning of the year, they often do not revisit the measures and current results throughout out the year.
Reinforcement is required to ensure your people understand their measures, and how they improve their results.

Benefits of Performance Management Standards
• They tell you how well the Employee is progressing towards achieving goals
• They guarantee that you’ll know when goals have been achieved
• They significantly reduce stress for Managers and Employees
• They clarify exactly what you expect from staff
• Employees know precisely what the Manager regards as most important
• Employees know just how their performance will be measured
• Standards provide many opportunities for positive reinforcement of Employees’ work
• They provide key information to enable Managers to make better decisions
• Managers can take prompt action when standards aren’t being met
• They remove the need for close supervision
• They help in managing poor performers

Whilst a lot of work is involved in the design and implementation of a robust performance management system, let’s not forget the impact, a successful system will have on the Organisation, the Manager and the Employee.  Instill confidence and ownership into your staff and always ensure that you acknowledge the achievement of set standards.  If you don’t, all that hard work may be for nothing.

Reap what you sow.