Effective Performance Management

Recently the Aberdeen Group completed a study on performance management. They found that companies with best-in-class employee performance management systems produce 50 to 70 percent more revenue than those that don’t have a good system. That finding gets my attention.

We also know, from earlier studies, that top performers are four times as productive as the weakest performer in an organization.

Bob Rogers, the president of Development Dimensions International (www.ddiworld.com), has said, “The majority of the workforce is randomly trying to achieve success without any real understanding of how success is measured for them in the organization.” The need for an effective employee performance management system is clear.

An effective employee performance management system establishes goals and measures results regularly.

A major performance management problem in organizations today is ignoring poor performance. Ignoring poor performance tells everybody that mediocrity is acceptable. In a hyper-competitive world this is deadly. The negative impact on even the top performers is only a matter of time.

Typically, managers can identify poor or mediocre performance, but they choose to ignore it. Very often these managers have past experiences when they did not receive positive support from higher management when they attempted to confront poor performers. A lack of high level support leads to a culture of “looking the other way.”

Senior leaders in the organization set the tone for performance expectations. Developing managers throughout the leadership pipeline requires training and rewards for effective performance management. Managers must be trained and evaluated on their ability to provide feedback to employees about performance. Developing employees is a critical task for all managers.

Organizations must make the role of every employee clear. At Dell Computer, the company’s “The Sole of Dell” program shows how every employee contributes to the success of the company. Michael Dell believes individual accountability begins with his role and the roles of senior management.

Every organization must make performance expectations and performance measurements clear. Only with clear expectations and measurements can we compete in any field.

For more discussion on this and related topics, please see my book entitled “Strategic Organizational Learning.” And, for free articles and other resources visit my website www.mikebeitler.com.

Retain Your Boomers

My recent article, “America’s Talent Drain,” stirred up a lot of concern (and some panic) about America’s future competitiveness. Let me offer some non-traditional thinking and a non-traditional solution to the talent drain problem.

First, let me quote some Conference Group research that has been loudly trumpeted in the media. “By 2010, the number of 35-44 year olds will decline by 10 percent in the U.S., 19 percent in the U.K., and 27 percent in Germany.” Traditionally that is considered to be bad news because the average CEO is 45-years old. The concern: Where will our CEOs come from?

Now, let me quote some additional Conference Group research that you may not be aware of. “By 2010, the number of 45-54 year olds will grow by 21 percent in the U.S.” Add to that this bit of research: “By 2010, the number of 55-64 year olds will grow by 52 percent.”

Do you see what I am about to suggest? Obviously, one source to replace baby boomers is — baby boomers! Baby boomers are not near death. Most boomers don’t even want to retire. Thinking of 45-54 year olds, or even 55-64 year olds, as “old” is industrial-age thinking. This traditional way of thinking is the problem!

If we need to retain the tacit knowledge of the boomers, I suggest retaining the boomers. Boomers are healthier and more energetic than their parents at the same age only a generation ago.

Find out why the boomers want to keep working. Is it flextime? Is it new challenges? Would they like to become trainers or in-house consultants? Would they like to transfer to a new office in the Sun Belt?

American companies have spent decades destroying the psychological contract with employees. Now that loyalty in corporate America is at an all time low, I believe substantial gains can be made in the areas of employee- loyalty programs. Certainly nobody doubts the benefits of customer-loyalty programs.

On May 12, 2005, Eugene Steuerle, Senior Fellow with the Urban Institute, in testimony before the House Ways and Means Committee, said “People in their late 50s, 60’s, and 70s have now become the largest under-utilized pool of human resources in the economy.” Steuerle is correct.

The Society for Human Resources Management (SHRM) reports that 59 percent of its members do not actively recruit older workers, and 65 percent of its members do nothing to target the learning needs of their older talent base.

Using industrial-age thinking is creating a large knowledge-age problem. Isn’t it time that we re-think our antiquated HR policies and practices?

For more discussion on this and related topics, please see my book entitled “Strategic Organizational Learning.” And, for free articles and other resources visit my website www.mikebeitler.com.