Performance Management
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1 A guide to Performance Management 1
2 This guide contains essential information on how to get the most from your team s performance. It will compliment your company performance management process, ensuring your team are fit to perform. It contains the core elements of a typical process, planner, checklist, and jargon buster. Core elements to performance management There are essentially three elements to a performance management process. Personal Development Plan Objectives Competencies Performance against business plan This guide looks into each of the core elements in more detail. dtil To begin with let ltus look at the objectives. Where do we get objectives from? We see a typical cascade process in operation as in the diagram below. The process typically runs in conjunction with the financial year (April March) or with the organisation s tax year. Business Plan Strategic Objectives Function Objectives Individual Objectives Contains the vision, aspirations and focus for up to next 5 10 years Specific objectives for a range of around 1 3 years Annual objectives for the specific function or department Individual objectives for the forthcoming year 2
3 Agreeing objectives Some objectives will directly cascade down from the business plan, strategic and functional objectives to the individual. A lot of the time these are simply updated from the previous year, (where there is similar emphasis from the business). E.g a sales target may increase year to year. Lets look at an example. To sell more Type D products in order to increase cross sales target, from 10 per week, to 15 per week, by end of June and on going. Reviewed monthly and at formal reviews. In this example we have included the following language In order to by MM/YYYY from XX% to YY% We should check that the objective ticks off the SMART principles too. Specific Measurable Achievable Realistic Time bound Measuring performance Objectives should be measurable. Through the performance management process we should be looking for ways to contribute to the bottom line of the business. It is key for managers and staff to seek ways to increase the profitability of the organisation. Consider the following equation. My contribution My salary (and costs) Profit or Loss? It s best to be in the black here! Are you? Here are just 16 ways in which we can contribute to the business. Rd Reduced d Higher production customer costs numbers Reduced complaints Higher efficiency Increased sales Increased customer satisfaction Reduction of accidents Reduced travel costs Improved cost to sales Improved quality Lower absence Wastage and leakage Reduced cost to service Reduced overheads No. of leads Environment costs Even without a formal performance management process we must be adding value. If it was your business could you afford to employ someone who wasn t? 3
4 Personal development plan Often derided, the personal development plan (PDP) is an integral and valuable part of the performance management process. In some industries it is a requirement to have and evidenced and Continuous Development Plan (CDP or CPD). If our team are not skilled and competent then how can we expect them to contribute to the business objectives? In sport there is no way a team will be able to (consistently) perform at their best if they have not trained, developed or practiced. (Of course it does help having the best players on your team from the start!) Below is an example of the topics on a PDP. Name Development Area Actions to take (and by whom) How will it be measured? Date to be reviewed We can over complicate the PDP. It is quite a logistically simple document really, especially when you consider the two main questions behind it. What is the gap in the individual s performance? What specific activities will help close the gap? From here we simply populate the plan with specific development activities. It is vital that these come from the individual rather than the manager, the manager should coach/mentor, rather than tell. Consideration to learning styles of the individual is very important too, as we all learn differently. Timescales and objectives help to ensure a focussed plan. Development plan options Examples of development options available are found below. This is list is never going to be exhaustive, it highlights examples of ways to close the gap. Individual specific needs have to be considered, as do learning style preferences. Training course Mentoring Seminars DVD/ Audio Develop- ment centre Coaching Skills practice Observing experts CBT* Business simulation Skills workshop 4
5 Competencies Competencies are found in two main categories. Technical competencies Behavioural competencies In simple terms: Technical competencies are the WHAT Behavioural competencies are the HOW Non performance can be due to the team member not knowing what to do, or because they are not doing it in a way that is acceptable. For example A customer services representative could handle 30 customer queries (WHAT),as targeted, yet they may not deliver it with compassion, integrity and quality expected (HOW). What we need to do Technical competenc cies Behavioural competencies Behavioural competencies How we need to do it We often see behavioural competencies with varying levels depending on the focus required. In the example below we see a simplified competency of Customer Focus at 5 levels. Customer Focus A behaviour which puts the customer at the entre of what we do. This is the desire and ability to delivery higher than expected service to our customers. Level 1 Meet expectations Delivers service as planned Handles customers queries Is pleasant and polite Level 2 Exceed expectations Receives feedback (written and verbal) praising service delivered Seeks ways to exceed level of service delivered Handles 1 st level customer complaints Level 3 Focuses the team on customers Coaches others to deliver customer service Sets objectives on customer service Gives feedback to others on service delivered Handles 2 nd level customers complaints Level 4 Sets customer focus goals Sets goals to deliver customer service excellence. Develops plans to increase customer satisfaction Creates innovative ways to motivate others to deliver customer excellence Handles 3 rd level customer complaints Level 5 Creating a vision for customers Sets a vision for the delivery of industry leading customer focus Externally champions our passion for customers to a wider network Competency name Competency definition Competency level and tag line Behavioural indicators The bullet points are known as behavioural indicators Differing levels of competency, increasing in focus. From day to day focus, to longer term strategic focus. These levels increase due to team management factors, specialism in role and task. 5
6 Performance manager planner The key activities of a typical performance management process are mapped out below. This is a full fat version, and the process can be condensed. Step One Initial Review Agree Objectives Agree Development Plan (incl. behaviours and competencies) Start here Daily/Weekly adhoc, informal reviews and coaching Step Two Quarterly Interim Review Review and update Objectives and Development Plan Daily/Weekly adhoc, informal reviews and coaching Step Three Half Yearly Review Objectives and Development Plan reviewed and documented Daily/Weekly adhoc, informal reviews and coaching Step Four Quarterly Interim Review Review and update Objectives and Development Plan Daily/Weekly adhoc, informal reviews and coaching Step Five Final Review Agree performance against Objectives Agree performance against Development Plan (incl. behaviours and competencies) Complete documentation Now go to Step One 6
7 Performance manager checklist Use this checklist to find out why an individual is not performing. It is also useful to plan for those high performers who plan to move into new roles. Seven areas can be checked to diagnose how to improve future performance. Clear Direction Do they have clear direction? Have they clarity over how their role and task fit into the business plan? Out of 10 how would you rate this? Clear Objectives Do they have clear objectives? Do they understand what their objectives? And how to achieve them. Technical Competence Do they have the correct technical competence? Have they the technical skills appropriate to complete their task? Behavioural Competence Do they have the correct behavioural competence? Do they carry out things in to correct manner? Commitment t Are they committed to the task? Do they have the desire and commitment for the role or specific tasks within it? Management style Are they being managed effectively? Is you management style correct? Are you over or under leading? Are you inspiring? Systems Are the right systems in place? Is performance being hampered by the wrong process, procedures and systems? Jargon buster Some phrases you may hear. KPI KPA ROI Behavioural indicator Tag/Strap line SMART PDP CPD *CBT Competency Bottom line Key performance indicator measures of key performance areas or objectives Key performance area area of key focus for the coming year Return on investment the return for any money spent by the business A bullet point, indicating specific evidence/examples of a behaviour A summary of the level of a competency An acronym Specific, Measurable, Achievable, Realistic, Time bound Personal development plan or Development plan Continuous (personal) development plan Computer based training Maps out technical competence or behavioural competence Signifies the bottom line of key financial statements i.e. making a profit or loss 7
8 Summary This guide has been designed to give you some important pointers on how to effectively manage your teams performance. Ultimately we must be adding to the bottom line of the business in order to aid the long term security. Use the space below to capture 5 things you will action over the next month with regards to managing performance in your organisation. My 5 actions are: About the author of this guide Phil LaViolette is Managing Director and founder of evalu8d. He has worked extensively in the field of coaching and learning & development with many blue chip and FTSE organisations. Including Barclays, British Nuclear Group, HBOS, Norwich Union, NFU Mutual, Orange, RBSG, Royal Sun Alliance Safeway, Vodafone. His passion is creating solutions that contribute to your bottom line, and has a track record of improving performance as a result of coaching and training interventions. To arrange a free consultation, or to discuss your organisations needs, then please contact us. Feel free to distribute this within your network. 8
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