Performance Management Systems: Administering the Performance Management System

Oct 1, 2020

Part 7:Performance Management Systems: Administering the Performance Management System

By: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is part seven of a seven-part series on Performance Management Systems. This blog series includes identifying the need for performance feedback, designing organization and individual employee goals, establishing incentivization programs, and communicating and monitoring the system.

This is where the employee evaluation process either succeeds or becomes a fun memory. For your organization and its employees to succeed, you need the employee evaluation process. For your performance management system to work, it must be administered well; when it isn’t, management must own this fact and apologize to both organization owners and employees.

In the prior installment, we discussed the performance evaluation form and process. This last installment on performance management systems is less riveting but is equally, if not more so, as important as the others. For this process to stick, it must be governed by policy, communication and training, monitoring, and employee investment.

Policy
Here’s an unpopular word. An organization’s policies should govern the entire process from how often evaluations are completed, to employee profit sharing opportunities, to identifying and measuring Key Performance Indicators. Management must provide clarity over the policies and rules for everyone impacted by the performance management system. Everyone taking a role must know how to operate as evaluator, evaluated employee, and independent tracker. All these features are essential to your program’s success. Your policy should also clarify management’s position on each of the intricacies reviewed in this series. Management expectations should be easily understood and measured, and then clarified in a published format.

Communication and Training

Now that we have gone through the full suite of a performance management system, your system is just about ready to launch. All the intricacies have been reviewed and agreed upon: including setting organizational, departmental, and individual goals, identifying key performance indicators at each layer, and developing the formal evaluation system and its schedule. Now that your leadership team is comfortable with the process and procedures, it is time to communicate it out to the entire organization, the evaluators, the trackers, and the employees to be evaluated. This is the single most important step of the process; it is not the time nor the place to allow all your hard work to falter. In each meeting, both as organization wide communications and tailored specific training sessions, depending upon the audience, the top leader must emphasize the importance of the management system, its expectations, and even the consequences for a lack of compliance.

Training must be commensurate with the audience. It likely makes sense to have a deep dive review with the evaluators and human resources team to discuss the full suite evaluation process, including employee compensation components. You do not need to get into the potentially sensitive compensation components in this meeting but likely should in a separate meeting with the CFO’s team. This meeting will be key to ensure the mechanics of the process are working correctly. Depending on management preference, management may decide to have the CFO’s team be the control for the process, while, other organizations have a specific analyst responsible for the plan, and still others have a human resource team member monitor these items. Communicating to the organization at large know who is in that process management role is critical. You must make sure this person can keep confidence and can be trusted, otherwise you can find yourself creating divisions within the organization.

Monitoring
At KHA Management Consultants, we assist your management team in identifying the right tools to use for ongoing monitoring and tracking of your performance management process. We have helped several clients build organization dashboards, scorecards, and even performance specific monitoring tools in order to develop their performance measurements. For those clients that want to get more robust from an enterprise resource perspective, we connect them with a value-added reseller that can find a software solution to meet their needs. We also work with management teams to define the process specifications and continue to coach them along the way. Regardless of the system, the reporting, or the measurement criteria, the biggest key is that management is invested and committed to ensuring your organization’s plan is being carried out. If the plan is faltering, management must direct resources and time accordingly to correct its course of action.

Employee Investment
If employees are willing to partner with you and dedicate precious years of their career, you must steward them well by growing them. The growth process for them starts with honest feedback. There is absolutely no substitute for investing in your people across all levels of your organization. The greatest organizations of today have figured this out and are benefiting, for now.  A great Harvard Business Review article to read on employee investment is linked here: https://hbr.org/2018/09/great-employees-want-to-learn-great-managers-know-how-to-teach. Your management team can be one of those coveted employers and your organization can have unprecedented success. In order to achieve this, it all starts with you, and you are not alone-KHA is here to help.

At KHA Management Consultants, we work with organizations of all sizes and shapes to identify what makes the organization, its stakeholders, and its employees tick. We facilitate the performance management process with your organization’s key constituents to ensure buy-in, ownership, and a new way of thinking about the organization and its stakeholders among all levels of employment. From a resource perspective, we primarily use our unmatched experience but also tap into the top-level resources such as those provided by Harvard Business Review and MentorPlus. Some of those materials, frameworks, and lessons have been used in writing this blog.

KHA Management Consultants, the consulting department of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for opportunities to work with key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the performance management experts, and contact us at 972-221-2500.

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