28th April 2021

The Four Essential Elements of Performance Management

 

It’s easy to overcomplicate Performance Management. But you don’t have to. We believe that there are four elements that need to be used as the foundation of a performance culture: Purpose, Outcomes, Accountability and Teamwork.

In earlier posts we pointed out that Douglas Macgregor identified issues with the practice of performance appraisal in a HBR article nearly sixty years ago. Issues scarily similar to the same ones prompting organisations to make change today. What’s more, Macgregor made suggestions for what could be done about these issues.

Now, we would have to hand in our consultant cards if we didn’t weigh in with our thoughts on the elements of performance management.

We believe there are four essential elements that need to be present for any performance management framework to work effectively.

They are:

Element 1 Purpose is well defined.
Element 2Outcomes are well designed.
Element 3Accountability is nurtured.
Element 4 Teams are your leverage point.

Element 1 – Purpose is well defined.

The first element is that leaders at every level of the hierarchy can describe why we are here. They can create a clear and explicit context for the work that needs to get done. The Oxford English Dictionary defines Purpose as “the reason for which something is done or created or for which something exists”. Purpose is at the very heart of why the organisation exists.

Now, it’s probably an urban myth but to illustrate the point, there’s the story from the late 1960’s about a NASA employee who was sweeping the floor and was asked what his job was. He answered it was to put a man on the moon; a purpose articulated by John F. Kennedy in 1961.

In the new world of performance, the difference between organisations that sustain performance and those that don’t will be the clarity of purpose which is shared among employees. It’s important that leaders at all levels embody, interpret and cascade that clarity of purpose through the organisation.

Element 2 – Outcomes are well designed.

Performance management is all about outcomes. It always has been.

Outcomes are the embodiment of our commitments. Outcomes prove you are making a difference. In simple terms outcomes sit within the shadow of our purpose and you know outcomes are well designed when you can respond with a simple ‘yes’ or ‘no’ to the question ‘did you do it?’

Effective performance management requires leaders at all levels to put real effort into designing outcomes, being clear on what needs to happen.

Element 3 – Accountability is nurtured.

Being accountable means being responsible for something and ultimately answerable for your actions.

Accountability is tough and needs to be nurtured from the earliest stages of careers. The first level of accountability is for yourself and the outcomes you must deliver. The next level comes when you have responsibility for the work of others. In organisations without a performance culture, the concept and construct of accountability stops right there; at the point where people exert direct control.

In organisations with an effective performance framework, people are nurtured to move to a higher plain, where they are willing to hold themselves accountable for things and people they don’t control. In these organisations people are comfortable with horizontal relationships, with paradox and ambiguity, and they spot opportunities outside their direct control and set about aligning with peers to respond.

Element 4 – Teams are your leverage point.

One of the key ‘pain points’ clients cite with performance management is that managers don’t have, can’t or aren’t willing to find the time required to set up performance agreements, do quarterly or half yearly ‘check ins’, and develop quality end of year reviews. Not to mention the skill required to do it well.

It’s high time to challenge the premise that performance management systems must be focused on setting of objectives and assessment and feedback between managers and individual employees.

Now, we’ve said it before, ‘teams are the windows to organisation culture’.   Almost all work is done in teams, therefore it follows that teams are the key point of leverage for effective performance management.

Here’s the new alternative. Every 100 days or so every manager spends four hours with their team in a structured team performance meeting.

If they have used our team performance meeting formula, they will have an engaged team aligned to purpose, clear on outcomes and ready to take accountability not just for their respective jobs, but for things and people they can’t control. Magic.

In Summary

Are these the only four elements needed for effective performance management? No. Different organisations and their different circumstances will determine what other elements need to be present.

The four elements of Purpose, Outcomes, Accountability and Teamwork need to be used as the foundation of a performance culture.

What other elements does your organisation leverage? Join the conversation. Your input is welcome.

We are happy to share the team performance meeting formula if you would like to engage in a serious conversation about performance management.

Justin Miles

Justin Miles

Manager Partner, Melbourne at Generator Talent
Justin is the Managing Partner of our Melbourne office, an outcome focused leader with a track record of driving business performance through proven talent and organisation development practices. Justin’s methods and skills have been shaped by working with performance oriented leaders in great companies including PepsiCo, The Campbell Soup Company, Diageo, Rip Curl, Fonterra and Wesfarmers, in Australia, the USA and Latin America.
Justin Miles

Categories: Developing Talent

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