Staff performance management

Ross Woods, 2014

Staff performance management is a strategy to monitor the work performance of individual staff members. It is not the same as organizational performance management, which is to monitor the effectiveness of the organization.

Most modern organizations have the following system:

• Each staff member has a written job description with a list of Key Performance Indicators (KPIs). The KPIs are the specific standards that employees are asked to achieve.
• The employer uses the KPIs as criteria for assessing employee performance.
• A performance review is a procedure in which a supervisor regularly reviews the staff member on their individual work performance. It is usually centered on an interview between the supervisor and the employee.
• The supervisor might recommend changes in pay, job descriptions, professional development, and career pathways.

The system has a few weaknesses:

• KPIs are like behavioral objectives. They have the strength of making expectations explicit. However, it is normally quite difficult to write a list of KPIs that clearly contains everything actually expected of an employee. The reason is that a list of particulars does not create a complex whole.
• Most performance management systems are not very good because they only monitor performance.
• A performance review is like assessment and audits; people normally dislike them. This means that part of the role of the employer is to turn a negative emotional experience into something positive.

 

Why manage performance?

Here’s your big picture purpose statement of performance management:

1. It should support your staff. It monitors their performance, builds their morale, and creates career pathways for them (professional development, promotion, etc.).
2. It focuses staff efforts on achieving your organization’s strategic and operational goals, even if it involves revising job descriptions.
3. It builds organizational capability, that is, what your organization is able to do.

By creating pathways for staff, it seeks to find what they are good at and develop their potential. The organization can be more confident in promoting staff because it has a very good understanding of the abilities of staff that it has developed.

The system should increase staff retention and reduce the costs of staff turnover. Low morale and poor job satisfaction result in lower overall organizational productivity and profitability. Employees put less effort into building client relations. They take more days off and have more workplace accidents. They are more inclined to quit so the organization has to pay higher wages to keep them.

Staff turnover is also expensive. An organization with high staff turnover faces the following costs:

• It must often pay extra entitlements to departing employees.
• It loses expertise, reducing organizational capability.
• It must pay for a stop-gap solution while it seeks new staff.
• It must pay the costs of hiring a new employee (advertising, interviewing, induction).
• It must then also absorb the cost of low performance while the new employee gets up to speed.
• Even then, it faces a risk that new employee will not be the right person for the job.

 

What about low-achievers?

You have less opportunity to develop people only keep up and no more. These people are not candiates for talent management programs. Consider these options:

• They might be older workers who are waiting for retirement. If they are satisfactory, you can keep them on. Termination would probably cause so much ill-will that it would be counterproductive anyway.
• Find out the reasons; they might be facing personal issues. If you cannot resolve them, at least take them off the talent development program.
• You might want to keep some people on but they don’t deserve promotion. You can move them to other jobs that they perceive to be interesting and that would broaden their experience.
• Some people work well but promote a destructive workplace culture. For example, they might act as power-brokers or gatekeepers, they might resist change, or bully others. If these people are in mid-life or later, it is unlikely that they will change and you should consider terminating them.
• Some people are dead wood and you should consider terminating them.