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.