2014 – Are you ready? Performance Management vs. Performance Review

February 7, 2014

FEBRUARY 7, 2014: AUSTIN, TX— NOW IS THE TIME FOR YOUR COMPANY TO ACT ON PERFORMANCE MANAGEMENT: Will your managers and employees be thinking “performance review” or “performance management”?  Your company may be poised to use the performance management process to fuel a year of real action.  Does your company effectively set high-level objectives for the business year? Do those objectives get meaningfully translated to each employee? Do you have a mechanism to ensure all employees know where they stand? Does your company reflect a culture of accountability?

The term “performance management” is intended to reflect the cycle of company, department and individual performance. It assesses how the business performed in the prior year and looks forward to the possibilities of the coming year; it is strategic in orientation and tied to the overall company goals and objectives.  Progressive, forward-thinking companies use performance management as a means of translating company direction to every individual, to recognize successful performance, to help guide and develop; to track progress along the way and, ultimately, to make fair pay-for-performance decisions. Here are some suggestions from AustinHR to help you convert performance management from a review of “what happened” into a guidance system that turns your employee’s behavior into missiles targeted on accomplishment.

First, understand the dynamics of performance management and your role in it.  Under a performance management scenario, both the manager and the employee engage in assessing, not just what the employee did last year, but what the employee commits to take on in support of the company’s new business year. When well-executed, performance management becomes a collaboration between employee and manager. It’s a mechanism for ongoing dialogue about what’s working and what should change. Each employee owns his, or her, performance.

Getting employees to see their role in the company’s overall success can be as simple as discussing the impact of their jobs on the company’s outcomes or as involved as the methods utilized at Springfield Manufacturing Corp (SRC) in Springfield, Mo.  (D. Meinert 2013) SRC sponsored classes for their managers and employees on balance sheets, cash flow and company finances.  They taught their employees and managers to understand their role in company success.  This strategy turned the company around and became the subject of a book on the topic.  The book, The Great Game of Business, promotes the idea of “open management” under which everybody becomes responsible for the company’s overall success and profitability. (D. Meinert 2013)

Second, enlist the employee’s assistance in evaluating their work and their role within the company.  Revisit their job descriptions to see if a “tune-up” might be in order.  Make your employees understand that they have a role in managing their performance.  A recent article on Salary. Com speaks to how employees can proactively monitor the outcome of their “performance review” by becoming more active participants.   http://www.salary.com/10-tips-to-get-more-from-your-performance-review/  (Pallera 2014) While this article is still on the “performance review” side of the spectrum rather than the total performance management side, it will get your employees thinking differently about the entire process.

Third, use this year’s meetings with your employees to set objectives and goals that you both feel will help the company and the employee to move into the strategic mode.  Set a schedule for you and the employee to get together for regular progress reports.  Resolve to fine tune all aspects of performance from job descriptions to daily performance expectations.

Finally, if you’re enthusiastic about these ideas, but not sure where to start, consider AustinHR.  Each of our principals and senior consultants have over 20 years of industry expertise. This team can draw on any number of scenarios to find one that best fits your company’s unique culture and needs.

Fox, Adrienne. “”Put Plans Into Action”.” HR Magazine, 2013: 27-31.

Meinert, Dor. “An Open Book.” HR Magazine, April 2013: 43-46.

Meinert, Dori. “SHRM publications.” SHRM.org. April 01, 2013. http://www.shrm.org/publications/hrmagazine/editorialcontent/2013/0413/pages/0413-open-book-management.aspx (accessed February 05, 2014).

Pallera, Maura. “publications.” salary.com. January 1, 2014. http://www.salary.com/10-tips-to-get-more-from-your-performance-review/ (accessed February 5, 2014).