Performance Management

Components Of An Effective System
In order to ensure that a performance management system is developed fairly, applied consistently, and evaluated objectively, organizations should make sure it meets seven key criteria.

  1. It should be job related. A program should be founded on criteria that are directly related to the primary duties and responsibilities of a particular job. The criteria should be specific, observable, and measurable. The nature and responsibility level of each position should determine the amount of weight assigned to each factor measured.
  2. It should be reliable and valid. To be reliable, a performance management system should yield consistent data regardless of who does the appraising or when it is done. For the system to be valid, there must be a direct correlation between the factors being measured and the critical elements of a particular job. Elements critical to one job may not be relevant at all in another job.
  3. It should be standardized. A performance management system should be standardized in its design and consistent in its administration. All managers and HR practitioners using the system should be given written guidelines and training in its implementation. Organizations should develop effective techniques for monitoring the degree of consistency in implementation.
  4. It should be practical and workable. To be effective, a performance management system should be practical, workable, and viewed by all concerned as a helpful tool. It should not be so complex or time-consuming to administer that managers view it as a burden. This can easily occur when forms take a lot of time to complete, multiple approval steps are required, or the system requires a forced distribution of results, such as 20 percent unsatisfactory, 60 percent average, and 20 percent outstanding.
  5. It should be acceptable to senior management, managers, HR practitioners, and employees. A performance management system should be deemed acceptable by the appraisers and the appraised. Ideally, everyone concerned should have some role in developing the system; many organizations involve employees in the development of criteria for measuring their own performance.
  6. Managerial style should be conducive to employee growth. In order to create the right climate for a successful performance management system, managers must be encouraging and supportive of their employees' efforts. In addition, they should display confidence in their employees' ability to progress. Managers should ask themselves three key questions about how their style relates to performance management: (1) Do I know how my employees view me? (2) Do I have sufficient confidence in my own skills to encourage the growth and development of others? (3) Do I show interest in my employees and exhibit encouragement for greater accomplishment? If these three questions can be answered affirmatively, the managerial style is considered conducive to employee growth.
  7. Employees should be receptive to suggestions for improving performance. There is a strong correlation between the overall manager-employee relationship and an employee's receptiveness during the performance management meeting. If this relationship is poor, the employee is not likely to be receptive to even the most well-intentioned suggestions for performance improvement.