Effective Performance Management Starts With You.

Every leader dreams of having strong employees who hit all key objectives and bring a great can-do attitude to work every day. So how does a manager match his or her hopes of a strong workforce to actually having one? Performance Management is a critical piece of the process that allows leaders to achieve this elusive dream.

It starts with the leader, who must adopt a new mindset and own this process; and it continues with building an effective, on-the-ground system focused on increasing employee engagement and enhancing performance.

In the early 1980s, Jack Welsh popularized the concept of talent management at General Electric (GE). With a stringent philosophy and a cut-throat, metrics-driven appraisal process, leaders force-ranked their direct-line employees and cut the bottom 10 percent from the company. For top performers, if you weren’t moving up every two years, you were falling behind. No doubt, this has worked for this highly touted legacy corporation.

Over the years, this formula has been adopted by similar sized public companies to varying degrees of success. However, this talent management strategy did not translate well to the middle market. Only unconnected piece-parts from that system found their way to the middle market, which were applied out of context and with little understanding resulting in failed attempts. Today middle-market business owners need, more than ever, high performing teams, but they are frustrated that the popular tools keep coming up short. What gives?

Own the Process: Shifting the Leadership Mindset

Leaders must own the process. Owning the process has two parts: 1) having a philosophy about leading and engaging people, and 2) knowing the fundamentals of talent management that will deliver on performance expectations. This is not about buying a system off the shelf, or piecing together best practices from other companies. It’s about getting involved and proactively defining ways to engage the performance of your people. People drive an organization’s growth and profitability. It is the leader’s responsibility and obligation to lead the way for giving candid, constructive feedback to the people. This feedback makes a difference in their personal and professional lives. Performance Management is an essential channel for leaders to reach employees and help them improve and grow. And, not living up to this responsibility is often interpreted by those around you as not caring.

Beyond the financial relevance, performance reviews are also a privilege for leaders. Think back on your own ascension to leadership. How did you get to where you are? To what degree would you say feedback from others, formal or informal, nice or nasty, pushed you to perform better? Only a handful of people over the course of your life have the formal role or opportunity to tell you something about yourself that could make you better. Teachers, athletics coaches, parents, and the boss are among the few!

Analyze People: Reinventing Performance Management
A well-rounded Performance Management process creates a ready bench of talent and fertile ground for growth. A successful process involves feedback specific to the job, role and relationships, establishes ready and open channels for confronting difficult situations, creates opportunities to reward and recognize achievements achieving objectives, and pushes top performers to reach new levels. Executed this way low performers have no room to hide.

All leaders have employees who: 1) think they are performing better than they are; 2) are performing better than they think; 3) are so good you worry they’re going to leave; 4) you wish would leave but never will. And don’t forget, employees are evaluating the leaders’ performance, too. Do they see management retaining low performers who they have to carry? Are managers seen as playing favorites? Perhaps employees feel unmotivated because they are overlooked for their efforts and/or work product. What incentive do they have to climb?

Now, the question is: How do leaders unwind from the people problems they are aware of (and those they are not) so they can build a strong bench?

Start the Conversation: The Essential Ingredient of Performance Management
Performance Management is one of the nine centers of excellence in the Strategic Talent Management continuum that transforms “employee data” into business intelligence – the kind of business intelligence that over time gets you out of the people grind and focused on building a strong bench. The crux of effective Performance Management is the conversation, not the forms. Those conversations should include feedback, encouragement, appraisal, development, direction and insight a leader provides to his or her people. The conversation is your responsibility. Honest, clear direction is the foundation of Performance Management so everyone in the company recognizes how goals, ratings and rewards are realized.

Provide the Building Blocks: Four steps to a new mindset

  •  Define the process. Begin with a synching exercise during which the owner/key leaders and managers sit down and talk about what Performance Management means and think big about what to expect from doing it well. Emphasize that helping people grow and exceed their own expectations is a privilege. Clarify what their respective responsibilities are in this process and how their efforts deliver to the bottom line.
  •  Focus on honest feedback. Constructive conversations should always create some tension. Restlessness that keeps you seeking new challenges to accomplish. Tension can help you figure out what is getting in the way. The purpose of the conversation isn’t to be mean or scolding, or to enforce one’s own agenda. The goal is to share observations based on stated goals and measurable objectives, as well as the individual’s performance from a productivity, attitude and future potential standpoint. Remember, fair assessments will help individuals improve. Assessing employees effectively will have a direct impact on your bottom line.
  • Empower your managers. Managers must view this process as important and valuable. It is their job, their responsibility. It is their right to help direct reports reach their potential. Help managers understand their role in the Performance Management process, and the importance of clear, honest communication and a consistent language shared among leadership so employees receive fair assessments. Measure managers themselves on how well they are performing these reviews.
  •  Translate feedback to action plan. Each manager owns part of the Performance Management process as an evaluator. The information managers gather and the scorecards they generate for employees become the centerpiece of enterprise-wide talent discussions. A company builds its bench strength based on its ability to leverage talent, and this is only possible when an owner knows what talent exists. Managers deliver this information via performance appraisals, which ultimately unfold into a company talent inventory.

Peak Performance Starts With Your People
Performance Management plays an integral role in Strategic Talent Management and establishing a high-quality bench of talent that has the drive to grow an organization. Leaders must keep an ongoing inventory of our people and their contributions to our companies, conduct honest discussions about performance that are tethered to expectations and goals. People are a company’s greatest asset. Leaders who invest the time and resources in establishing a Performance Management infrastructure will leverage this asset to compete and accelerate growth.

Originally published in Construction Executive E-newsletter – April, 2015.

Download PDF Version »