CEO Performance Management Snapshot
Employee Performance is one of the few remaining sources of true competitive advantage
Why Employee Performance Management?
Employee Performance is one of the few remaining
sources of competitive advantage. Organisations set
objectives for executives but neglect the remainder
of the workforce. If its good enough for the executive
team, then why is it not good enough for our
employees? Employee Performance Management
systems provide a mechanism to set performance
expectations, to align your employees with the
strategic and operational plans and drive the
elements of the plan that you need to achieve –
profit, service outcomes, innovation.
Why Bother with Employee Performance
Management?
Independent case studies verify that financial
outcomes can be improved by up to 25% sustained
over several years by applying non financial metrics
to individuals. Employees typically constitute 60% of
your operating costs and you need them to be
performing at an optimal level.
What Employment Performance Management is
not
Employee Performance Management is not:
- The traditional Appraisal or Annual Review
process found in most organisations. We
believe that an appraisal system has little or no
connection to achieving business outcomes.
- A punitive process. In some organisations, the
term performance management is used as a
punitive process “Bob needs performance
management as he is not achieving”. This is not
the universal definition of Employee
Performance Management. Employee
Performance Management is the process of
aligning employees to the Strategic and
Operational plan and setting specific objectives
that define performance.
What does Employee Performance Management
involve?
To be effective at Employee Performance
Management, you will need:
- To educate your managers and staff in how to set
meaningful objectives
- A system to track how employees are tracking to
these objectives
- Ideally a link to remuneration that ties directly to
the ratings of achievement. The link can be a short
term incentive program, link to salary increment or
an awards program.
- C-Level support
Will my employees like it?
Employees expect clear direction and feedback. They
actually get less than they expect. This is confirmed in
many studies including:
- Seek – 2006 Job Seekers Survey
- The Great Divide – 1st Executive
Employee Performance Management provides clear
direction to employees (through the Objective Setting
process) and feedback more frequently (via short
reviews) than an annual appraisal.