How to solve your performance management problems

How to solve your performance management problems

Expected outcomes from reading this 1300 word, 5 minute article:

·         Identify the common areas to solve performance management problems

·         Perform a self-test audit of current performance management actions

Many companies start out as either small partnerships or single business owners. As these companies grow, the need to develop a strong team is important. The leadership skills needed to manage a team of 5 is different than that of 20 and indeed, this continues through the scale of every business size. Some companies struggle with performance management. The reasons may include implementing the wrong systems, technology, people and skills.

The industries in 2015 at higher risk for performance management issues, in our opinion include; Fintech, Predictive Analytics, and Construction and Artificial Intelligence companies. The companies within these industries are facing rapid growth. The founders can struggle to keep the skills and control needed for staff retention and performance. Often these performance elements make or break the founders and the companies they started.

The deadly sinners of poor performance management are below. I also offer some solutions and tips to ensure sustained success for you and your business.

Communicate clear goals

There can be no bigger failure in a performance management system than having a lack of clear goals. A best practice solution is to identify the critical success factors within work flow process steps.

Problem: A new business recruits a sales manager. The job states a sales growth of 7% is the target.

Solution: This should state gross sales values should increase 7% by end December 2015 compared to the full sales values of 2014. (A deeper dive may be also required to clarify any impacts on currency exchange rates).

Bonus JAMSO Tip: Use my prior article to help define KPI’s and SMARTER goals.

Self-Test Audit:  How have you created goals that are SMARTER and known to staff members of their priority?

Plan and strategy

“Just give me the results”. This can sound empowering to strong leaders but is simplistic. For performance management to work correctly there should be the need to understand progress, status, have a platform for feedback plus understand the chances of success. Therefore the performance management expectations should include a clear plan and strategy. These can be created and set by the person who owns the goal, but time should be allowed and support given to those to achieve a firm but realistic plan and workable strategy.

Problem: The Sales manager now with a clear goal has been told that expenses need to be reduced by 15% over the next 12months. For the sales manager to achieve his/her goal it is important to have a plan and strategy that can still support and proceed.

Solution: The sales manager creates strong budget controls and sales events to reduce the costs of their department whilst increasing the amount of customer contacts. Invites to key customers are provided for regular meetings at the sales office. The introduction of webinars to the sale process also increases the social media marketing. This lower cost communication method keep relationships with customers and the market. A review of the strategy should be conducted at 90 day intervals. Then adjust to improve the return on investment and oversight of budget levels.

Bonus JAMSO Tip: Use the company vision, mission and goals to be the base guide principles for your specific plan and strategy, this helps alignment of business actions and create the business culture.

Self-Test Audit:  When did you last review your plan and strategy? Do all the relevant leaders and staff members know where to find and refer to it?

Establishing credibility

Establish Credibility

The need for mutual respect and trust is important for a performance system to be effective. In newer companies there is often a “lucky manager” – this is the person that has been promoted to a position simply due to timing and convenience and not always due to their true talent and potential. Equally the robustness of a reliable measurement system that is transparent is important for developing trust and credibility of the system and people involved.

Problem: The sales manager is working with clear goals and linked to a plan and strategy yet is not creating the correct respect from his peers and sales team.

Solution: An overview of the measurement system is agreed between cross departmental inputs and sales team members. All are aware that the gross sales figure must also retain a certain qualified net profit level that the whole business will benefit from. The sales manager also ensures through storytelling some real case studies of past experience where improved performance has been attained either directly or as benchmark standards.

Bonus JAMSO Tip: Respect is earned over time and lost very quickly. Ensure success stories are communicated within the business and where possible shared and evidence supported by others through reference systems.

Self-Test Audit:  What specific actions have you taken to prove the continued value of each leader? Is this visible and based on open facts?


Create consistency

The feedback to all staff engaged within a performance management system is important. The consistency of this feedback is even more important. Leaders and supervisors should provide short time feedback communication loops on behavior and results that lead to positive results. If staff is to be accountable and responsible for their actions then so should their leaders. The leaders should aim to create an environment where good performance is consistently praised. A leader should take a planned and strategic approach to challenges and success rewards. This develops loyalty, internal branding and highlights the company culture. Where inconsistent leadership approaches is taken expect a higher staff churn rate.

Problem: The sales manager is ahead the company target by October and is expected to exceed their original target; at this point the CEO informs the sales manager that the real target is now 10%. This decision demotivates the sales manager who then starts to seek for another job.

Solution: The CEO congratulates the sales manager on the performance so far. A discussion is held to identify how to boost the sales to 10% in a way that reflects the company values and growth ambitions. The new opportunities are discussed openly to help develop opportunities for both the sales manager and business with proportional rewards for exceeding the prior agreed target.

Bonus JAMSO Tip: Create a check list of points that are covered in each feedback session. Try to create a 360degree view so emotional, factual, inter relational and structural areas are included.

Successful performance management system and people

The above steps have highlighted some of the common basic challenges and scenarios for high grow companies. There are natural flows and changes in business culture and these are also seen outside of work and into more social environments such are charity work, clubs and hobby interest fields. The passion that drives these people forward should not be ignored and yet the way that leaders interact with others also remains vital to success.

The extended use and value of company charters, vision and mission statements have become too fluffy and general for many large companies. For true strength of performance clear and precise communication, expectation and openness will aid a business and its staff to success.

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