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Organizational Challenges in Managing Performance, by Richard Nelson

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Friday 15th May 2009 / 2871 views

"Without development, it can be awkward to speak to individuals directly about their performance.”

In the late nineties, a study commissioned by the Chartered Institute of Personnel and Development showed that good people management and development practices contributed more to productivity and profitability than strategy, quality, technology and even R & D*. Other studies in the UK and the USA show similar results. So why are organizations still finding the management of performance a substantial challenge?

Not surprisingly, the answer is a complex mixture of design and behavioural issues. The behaviours and attitudes of an organization’s founders and influential subsequent leaders will have had an enormous impact on the approach to managing performance. Those who have had a deeper belief in the value of management action will have encouraged and possibly insisted upon the development of proactive performance management. They will have set the best example by providing clear direction and engaging their senior managers in agreeing objectives and reviewing progress and results in the light of such objectives. Those organizations that still demonstrate some passivity towards developing effective managers are more likely to show a lukewarm approach to managing performance.

The manager’s key priorities should include leading the generation of results from the efforts of their people. This means managers need to clarify what they expect of each individual from the outset. To support the implementation of the annual business plan, many organizations design a performance management process which establishes a common approach for all managers to adopt. When used properly, this will promote an active approach to managing performance and provide consistency in rewarding people who achieve results and improving those who fall short of expectations.
The management of the performance management process must be led by business line managers. The main purpose of performance management is to deliver high performance. This can, however, become obscured by the other functions of HR, such as obtaining derivative data for talent management, salary/bonus review and learning and development. In some cases, the end-of-cycle performance review or appraisal has been given prominence over the start-of-cycle objective setting. It is much more difficult to actively manage performance over the business year, and to assess dispassionately the results achieved at the end of it, if there was no clear agreement about what was expected.

The leadership and design issues in relation to the performance management process are important aspects when analysing an organization’s success. However, they do not fully explain whether or not a manager will deliver high performance: that has more to do with their confidence and skill in engaging their people in performance discussions. There are still social and cultural barriers that can only be overcome with learning and development. Ironically, organizations that employ highly qualified people can often demonstrate poor performance management, since there is sometimes a view that professionals do not need direction and engagement. Underlying this can be awkwardness, even embarrassment, about speaking to individuals directly about their performance.
The main answers to addressing managers’ lack of confidence and skill in managing performance lie in two main areas; the leadership guidance they receive from their managers and the management development they undertake. In order to maximise performance they must have leadership and care demonstrated by more senior managers. If senior managers demonstrate the importance they place on high performance by setting a positive example:

• setting objectives and standards at the beginning of the business cycle,

• actively managing and supporting the achievement of high performance on an ongoing basis,

• undertaking performance reviews, and

• coaching their people to improve performance and develop potential,

then their managers will see positive role models.

However, even with positive role models, managers need
to be confident and skillful in communicating performance information.

At Nelson Consulting we recommend development that includes placing the management of performance at the core of the manager’s role. High performance should be the focus of managers’ leadership and coaching activities, both of which deserve development.

Specific topics to be included with leadership and coaching development are: influencing capability, interpersonal skills, communication and giving and receiving feedback. The development is maximised if undertaken in a practical workshop situation with colleagues at a similar managerial level. In this way, appropriate discussion can take place, as well as extensive relevant practice, preferably with real business cases.

*Sheffield Institute of Work Psychology, 1997

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