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Design and implement a clear performance management plan By Marilyn Colyer

Aside from legal issues, performance management is one of the trickiest tasks a human resource manager tackles. While tying employee compensation to defined business goals appeals to both employees and management, HR's design and implementation of the plan requires considerable thought and a crystal clear understanding of the company's strategic goals.

As you map out a performance management plan, keep these questions in mind:

What are the performance criteria? In other words, are only quantitative goals (such as monthly or quarterly sales goals) important?
Are the right metrics and reporting tools in place to accurately measure employee performance?
What role does soft-skills (such as team leadership and enthusiasm) play?
Are managers equipped to evaluate performance in accordance with the plan, and what additional training is required to get management up to speed?

Nail down organizational goals and objectives

In the planning stages, you must clearly identify the correlation between job competencies that individuals bring to the job and current job descriptions. Then look at how they directly impact the goals and objectives of the organizational plan. If any of this is unclear, it will sabotage the success of the performance management program.

For example, if your company is struggling to revive a floundering customer service department, an employee performance management plan might turn things around.

Start by identifying any existing reports or reporting mechanisms. For the sake of discussion, let's assume that your customer service manager has a detailed database that tracks customer complaints and their resolutions. One metric that you might establish is the baseline number of calls or complaints that a service representative must field and resolve per week. Employees that top that goal would be entitled to spot bonuses or non-monetary rewards, such as televisions or DVD players. (Note: Non-monetary rewards may have tax implications for employees, so check with your accounting and legal teams before you launch this type of program.)

Measure soft skills

Soft skills, especially team leadership and effective communication, are essential in service-oriented businesses. You want to encourage employees to take an active role in resolving conflicts and customer complaints, but how do you measure these in your performance management plan?

Using our customer service example, let's review a couple of tools to collect qualitative feedback:

Quarterly customer service surveys: Ask a select group of customers to rank (usually a scale of 1-5) your teams ability to resolve problems.
Log customer feedback: Note instances where customers have gone out of their way to complement an employee or their team. Documenting this type of feedback can be tedious but can prove to be invaluable at review time.
Peer reviews: Collecting anonymous colleague feedback often gives you a view from the trenches.This type of feedback can highlight employee performance issues that might have gone unnoticed.

Both soft skills and hard metrics have their place in an employee performance system, but if your managers don't understand the evaluation process, the program will be ineffective.

Make sure managers and supervisors are prepared

Invest wisely in performance plan training to ensure that managers or evaluators have the skills, techniques and tools necessary to participate, from the planning and inception stage to evaluating and implementing performance improvement plans.

All managers need a clear understanding of how to differentiate individual performance objectively and fairly. This will require the manager, or evaluator, to be able to outline specific degrees of employee performance. A fair talent assessment of your employees, in accordance with designated standards of performance or a relative contribution comparison, will help to determine these different levels of employee performance.

Having classification procedures allows placement of individuals into categories, such as outstanding, excellent, good, average, fair or poor. The problem with classification procedures, however, is the difficulty of defining each category managers could have a different understanding of fair or good, for example. This inequality can cause deflated or inflated ratings.

Provide mangers and evaluators with a standard guideline. For example, 4 percent of employees are rated outstanding, 12 percent are rated excellent and continue down the line. Individuals can be rated on specific dimensions as well, for example, quantity and quality of work or performance in a team environment. In a future article, we will cover these dimensions in more detail.

Keep tracking program success

Create a structured system to ensure that company and employee performance goals alignment are identified at all times during the reporting cycle. Additionally, review probability outcomes on targeted performance objectives. This information should be communicated to all evaluators, managers and employees on a timely basis. Leverage this information to steer employee behaviors and performance toward achievement of organizational goals and objectives.

Marilyn Colyer is owner of Human Capital Strategies, LLC (www.humancapitalstrategies.net). Marilyn has over 25 years of experience helping organizations identify employee potential and increase employee contributions. You can reach her at mcolyer@humancapitalstrategies.net.

CategoryCategory, Performance Management