Realigning Performance Management with Business Reality!

13 Sep

The times they are a changing and our workforces also. New generations of employees are seeking better and more real time performance feedback from their supervisors. A program based on annual reviews is no longer appropriate. With the increasing use of freelancers (contract employees) and outsourcing, many workers will not be associated with a company for as long as a year, but their contribution to company results is critical. A new approach to performance management is essential to match the business dynamics of today and projecting into the future.

For years, we have been talking about managers taking more responsibility for Human Resources issues within their area.  Maybe this is the appropriate time. There has been ongoing discussion about the limitations of performance management in its current form, controlled centrally by HR. Some type of change seems inevitable and giving greater accountability to functional management/supervision may be the key.

The most logical change may be to focus performance management tracking on the criteria used within the functional areas (where the results have to be achieved) and to use the conventional HR system more in a training, assessing and coaching context.  HR would still be working directly with managers/supervisors, but on a continuing basis and in real time.  This change in focus would recognize that performance management accountability is within the function where the performance occurs and with flexibility to address changing needs.

Most HR systems focus on performance snapshots at specific points in time, while functional performance management and tracking is ongoing. The two distinct (HR and functional) ways of measuring performance have coexisted for considerable time and integrating the two programs will ensure common focus and that all resources are aligned, mutually supportive and focusing on today and tomorrow rather than yesterday. The CEO will (as always) track performance through the function, not HR, and that is where the emphasis must be.

Functional performance tracking systems and metrics may currently focus on a limited number of measures, but we count on their effectiveness to support and drive company results. They may focus primarily on costs, productivity, efficiency and quality, but that may, in real time, be appropriate.

The conventional HR performance management programs currently used are complex.  It may require significant investment to implement change, but if the current system is not working well, change is essential.  Some initial thoughts are as follows:

  • Functional performance management, addressing certain criteria e.g. productivity, quality etc., would continue to track performance as at present and be expanded as appropriate. Supervisors would review performance of individual employees on an ongoing basis and, when necessary, initiate action to deal with issues. Depending on the type of issue, HR may also be involved.
  • To meet legal and compliance requirements, HR would ensure that functional performance management practices and criteria are consistent (equitable) companywide, although varying based on functions. Key data would be online and HR would consolidate as appropriate to meet business and HR requirements e.g. salary planning and normal metrics.
  • Functional performance management would focus primarily on results. Competencies and other “soft” factors (HR specialities) would be used, when appropriate, to explore specific performance problems and for training purposes including career development. Progress review of such aspects (with the support of HR) would be separate from ongoing performance (output) tracking, but with some integration when appropriate.
  • A major HR role would be providing training and support to supervisors and managers (new or existing) and in providing assessment services for employees requiring special attention.  HR would work with supervisors, when appropriate, to identify individual employee performance issues and develop a plan of action.
  • Although the traditional HR Performance Management program would be deemphasized and significantly changed, the role of HR is likely to be greater and particularly from an ongoing learning and development, supervisor support and troubleshooting perspective.
  • The greater recognition of functional accountability should make HR a much stronger business partner and contributor to results. It is likely that some HR positions may need to be located directly within some operating divisions.

Functional (Departmental) Performance Management

Departmental performance tracking has become increasingly sophisticated over the years. In most cases, quantifiable production/output data is available, by employee, on a daily basis and the supervisor would receive system-generated alerts about specific issues needing attention. Local systems may also track other factors including training needs/progress and include input by both the supervisor and employee – both would have access to the system.

The supervisor (following direction from senior functional management) is committed to what he/she thinks is critical for managing performance within the specific area. The supervisor probably does not consider the HR factors and indicators as unimportant, but sees them more as belonging to HR. Supervisors who have followed their own style of performance management all year will not have to suddenly adopt a different (HR program) approach and fit employee performance into HR categories and using terms probably never referred to at any other time.

The new performance management approach would be more effective as it would directly interact with data already routinely collected, coupled with employee and supervisor online notes on specific issues and action committed to (employee and/or supervisor) or following a regular review meeting.

Human Resources Performance Management Support

Human Resources will be responsible for providing performance management support and specifically for working with supervisors to review/identify diagnostic and psychometric requirements, performance development planning and assistance with performance problem issues. Progress on action agreed for/with an employee would be tracked and reviewed by the supervisor and the employee on an ongoing basis. The new performance management direction will require HR to be a strong and equal team player – not controller.  HR will need to develop mutual trust with functional management, with HR working as an ally and partner.

Learning and development responsibility will remain with HR, reflecting our professional expertise and to consolidate and review needs for the total organization.  The HR role would require skilled HR analysts and planners to use total company information in the most effective manner. 

Why it will work

Executives, functional management and supervisors would be more committed to a company-wide performance management system tied more directly to business results. Employees, in general, will be better informed with ongoing communication and feedback from the supervisor and no year-end performance evaluation surprises.  Employees will know where they stand at any point and would still be able to go to HR with a problem. The Employee Relations role of HR would not be diminished.

Functional performance management would be expanded and higher profile because it would be “official”. The HR leadership and development role would be expanded because it would provide ongoing support to local supervisors and recommend action (e.g. employee related) that the supervisor would build into the applicable plan. The focus would be more on tackling needs and issues as they occur rather than looking back at what has already happened. Employees will benefit from improved communication and feedback and likely to be increasingly comfortable with the machine aspects of the online system including available help and online training modules.

Our traditional HR performance management systems are very thorough and were essential when little else existed. Based on technology advances and greater functional metrics based accountability, it is now time to move ahead. We have the capability to develop more appropriate and more flexible processes to meet the business challenges of today and tomorrow and working more collaboratively, rather than controlling through a central program. Does this make sense? What do you think?

Thank you for your interest.  I look forward to any thoughts and comments you may have.



5 Responses to “Realigning Performance Management with Business Reality!”

  1. Gabriel Oriti September 14, 2014 at 6:45 am #

    Hi Ian

    I agree with your general thesis that devolving functional PR down to supervisors and managers is the way to go – and giving employees more timely feedback that is structured and constructive – this gives employees and managers a sense of achievement or a sense that goals are not being achieved and as such require corrective action. Normal monitoring but again in a structured and progressive manner. As you argue with contractors or short term employees they want and need consistent monitoring and PMgt
    It will be interesting what other feedback your post generates
    Thank you for raising this topic and looking at ways to engage with today’s workforce
    Regards gabriel

    • ianclive September 14, 2014 at 2:47 pm #

      Hi Gabriel,

      Thank you very much for your helpful insight on this subject. I agree with all your points. So far, including a number of comments on LinkedIn, there seems to be greater receptiveness to this type of change than in discussions a few years ago. Probably part of the reason is because of significant change to business dynamics. But, I also look forward to input from all perspectives, including those who support the traditional performance management process.

      In my experience, the “one-on-one” ongoing communication between supervisor and employee is not dominantly to give feedback, but equally to review work progress as a discussion between two intelligent people and possibly with some brainstorming to move things ahead and agree on action. In sales, for example, discussion how to close a difficult deal, the need to find inventory or other ways to meet deadlines. Mutual feedback (there may be set criteria) can naturally fit into such discussion.

      Thank you so much, Gabriel, for expanding this discussion in such a helpful way.


  2. waleed May 5, 2015 at 12:07 am #

    I agree with 100 % but how can we apply your methodology on blue collara in gold mine site for example? ?

    • ianclive May 5, 2015 at 12:33 am #

      An excellent question. The key is really the alignment of performance factors with specific performance requirements determined by functional management, rather than trying to apply a standard methodology. The main thing to avoid is judging performance based on competencies etc. that are never discussed or considered particularly important by either employees or functional management.

      Thank you very much for your comment.



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