What Makes for Effective Performance Management? Summary Research Findings Presentation 24 November Kathy Armstrong

Transcription

1 What Makes for Effective Performance Management? Summary Research Findings Presentation 24 November 2005 Kathy Armstrong

2 The Paper An Overview Aim: To identify what makes for effective performance management Methodology: Six organisational case studies Findings: Identified seven critical elements of performance management & devised a number of useful conceptual frameworks

3 The Evolution of Performance Management Frederick Taylor - First Formal Appraisal Ratings for US officers & factorybased US system Incentive-linked schemes (promotion) Ratings & Personality Traits More openness in reporting, increased subordinate participation, rise of trade union interest Use of Performance Management terminology Before WW s 1930 s 1950 s 1970 s 1980 s

4 Methodology Six organisational case studies: Abbey Group, a major banking institution Department for Environment, Food & Rural Affairs First Direct, a telephone & internet bank Mouchel Parkman, a professional support services consultancy Suffolk East Primary Care Trust Zambon, an Italian pharmaceutical company Case studies involved the following: An interview with a Senior Manager An interview with a senior member of HR Focus group with employees Focus group with managers

5 Research Findings Synthesis of common themes from case studies into a framework of seven elements Seven elements include Process Capability in Performance Management Motivation Measurement & Reward Role of HR Learning Organisation Role of Culture & Clarity of Purpose The elements are located in the business context

6 The seven key elements Process Business Context Clarity & Culture PM Capability Motivation Effective Performance Management Measurement & Reward Business Context Learning Organisation Role of HR

7 The Seven Elements - Definitions Process - the means by which individual performance is directed, assessed & rewarded. People Management Capability - the skills, attitude, behaviours and knowledge that line managers need in order to raise the performance standards of those around them Motivation - the extent to which the organizations approach to PM unlocks discretionary effort amongst its employees Measurement and Reward - the indicators or dials on the dashboard that are used to assess a) individual performance and b) the organizational effectiveness of the whole PM system, and how these are used allocate rewards Role of HR - the extent to which HR leaders a) demonstrate subject matter expertise, b) draw upon relevant theory and research evidence and c) influence thought leaders within organizations to focus energy on the aspects of PM that make most difference to performance Learning Organisation - the extent to which organizations are able to objectively reflect and learn from their own PM experience, building on what works and refining where necessary. Role of Culture & Clarity of Purpose - the extent to which an approach to PM resonates and is congruent with the broader culture of the organization in which it is being applied.

8 1. Process Worth All the Effort? Organisations place too much emphasis on revising and tweaking the process this may be at the expense of other activities that may have more impact The process sends a message to the organisation about what is important and valued The message is often highly complex, that the role of objectives, behaviours, development needs and reward mechanisms are all equally important

9 2. Performance Management Capability Helping Managers to Get it Right Organisations find it difficult to ensure consistency of implementation of performance management The capability to deliver performance management relies on identifying and developing core people management skills Performance management training tends to focus on the process The emphasis needs to shift to helping managers to change behaviour rather than helping them to be process experts

10 3. Motivation The Forgotten Element It is easy to lose sight of the role of motivation in performance management This is very rarely made explicit or discussed The process you use will reveal the assumptions being made in the organisation about the role of motivation on performance Managers need to be advocates of your performance management process The quality of conversations between manager and staff can be a key motivator or demotivator Goal setting should be about motivation not just control & alignment

11 4. Measurement & Reward Why is this still an issue? Staff tend to focus on the measurement side of the process it is what they see Getting the measure or the measurement process wrong is demotivating, while getting it right is not always motivating The opportunities for getting it wrong are many lack of transparency, management inconsistency, confusion of ratings and rankings Debates about rating, ranking and quotas can drain the capacity of performance management to be a powerful vehicle for feedback, motivation and performance improvement

12 5. The Role of HR Taking the Lead? HR seen as guardians of the process rather than thought leaders Emphasis and effort is often given to compliance rather than quality

13 6. Learning Organisation Is Performance Management Making a Difference? There is an assumption that performance management has a positive impact on the bottom line Collecting data to check this assumption is rare so the link between individual performance (or aspects of it) and organisational outcomes are not clear Reviews of how performance management is working need to go deeper than what managers and staff like although the barriers they identify need to be addressed

14 7. Clarity & Culture Core Purpose and the Role of Culture Performance management reflects the organisational culture and context. When the performance management system is not delivering, it is likely to be reflecting a deeper issue such as lack of organisational agreement about: Clarity of purpose, priorities or standards A mismatch in espoused values and actual behaviours Aligning the performance management process with the direction of any desired organisational change is essential It can support organisational change but not be the only, or main driver of it Do organisations get the performance management they deserve?

15 Where are the quick wins? Easy to improve/ implement Process Quick wins are hard to find Low value add High value add Measurement Role of HR Skills in performance management Motivation Learning Organisation Clarity & Culture Difficult to improve/ implement

16 Clarity of Purpose - Can Performance Management do it all? Rewards? Learning & Development Business Alignment

17 Performance Management & Organisational Change Performance management as a lever for organisational change: a signal for what is important for the organisation providing a key space for dialogue in the organisation a focus on new behaviours Performance management can play an important part as a defrosting mechanism, a driver of early steps and a key process in embedding the new change paradigm. Unfreezing the Present Level Moving to the New Level Refreezing the New Level Lewin s (1951) Three-Step Model

18 Key questions What value is our overall performance management process adding to the core goals of the business, and does this return justify the investment of time and money? Is putting effort into changing the process worth it? What do we know about the extent to which our performance management process motivates or demotivates those who use it? Do our aspirations for Performance Management fit with the prevailing, or desired, culture of the organisation and, if not, what else needs to happen to ensure its success? How effective are our performance metrics in isolating and assessing individual achievements and contributions?

19 Conclusions Role for more collaboration and collegiate discussion within and between organisations Need for data-driven approach to test the seven elements Getting a real grip on performance management means tackling tough issues it is easier to default to the easy but low value-adding route There is no one answer but a clear thinking framework We need to think about performance management in change management terms

20 Public Value The Work Foundation The Work Foundation