11th September 2015

The Four Elements of Performance Management

In recent posts I pointed out that Douglas Macgregor identified issues with the practice of performance appraisal in an 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 I’d have to hand in my consultant card if I didn’t weigh in with my thoughts on the elements of performance management. So, here goes. . . .

I 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 2 – Outcomes are well designed
Element 3 – Accountability 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, and how leaders at all levels embody, interpret and cascade it through the organisation.

Element 2 – Outcomes are well designed

Performance management is all about outcomes. It always has been. The word outcomes being used more often and I hope it doesn’t come to the point where’s it’s overused or not applied properly.

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’, and 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. And, if they 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.

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

Drop me a line and we arrange to talk.

Justin Miles
Partner, Melbourne
Generator Talent Group

THE TALENT WORKSHOP is the leadership development arm of the Generator Talent Group and offers a collection of best-in-class programs, delivering a range of Executive Assessment & Leadership Development outcomes that transform individuals, teams and companies. Click here to visit our website

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