Performance Management -- Why your company needs it

Business Executive (HRPAO insert)

By Doug Barnard

Overview of the importance of Performance Management

Performance Management -- Why your company needs it

As a business owner, if you're not regularly talking with your employees about the company's direction and how their performance ties into it, just what are you talking about?

Smart companies today are maintaining an open dialogue with employees and improving organizational effectiveness with something called Performance Management (PM). In a nutshell, PM is a continuous process that involves planning work and setting expectations, establishing appropriate training and development and monitoring performance and then rating it. PM also rewards and recognizes employees who meet those expectations set forth at the start of the process.

Organizations that don't establish even a basic form of PM run the risk of losing valued staff -- an expensive prospect in today's economy.

"Attracting and keeping the best employees is not only an issue of dollars and cents, it's also common sense," says Gerlinde Herrmann, President of the Human Resources Professionals Association of Ontario (HRPAO).

Today's employees, especially those entering the workforce for the first time, are used to instant feedback -- they've been getting it on-line and through video games for years. PM ties business objectives to individual or group performance so that employees don't feel they're working away in isolation. It's important that discussions with employees be confidential and that all employees are treated equally, regardless of their positions.

PM is an ongoing, continuous process, according to Monica Beauregard, member of HRPAO and President of Bridgepoint Incorporated, a Toronto-based Human Resources consulting firm.

"It's not just a sit-down, annual performance appraisal anymore," says Beauregard. "Work priorities and job duties change quickly today, so you have to talk with employees on a regular basis to keep on top of things. Ask them: how they're doing; what things can the company do to make the job easier; and how are they progressing towards pre-determined objectives?"

Herrmann says the HRPAO also recognizes the value of continuous and open dialogue between management and employees. "If an employee does something good, then spend five minutes with him or her and give some positive re-enforcement. It's important to point out shortfalls in their performance as well. Ask them how they see the situation and what measures could be taken to keep the same things from happening in the future."

Herrmann suggests keeping an electronic log or a short hand copy of what was said at the time, so that when the performance appraisal comes up at the year's end, its only a summary of what's already been discussed throughout the year ­ without uncomfortable surprises.

Beauregard is aware of on-line or software programs in the marketplace for managing PM, but cautions about their use. "They can be useful in certain situations, but you just can't beat the face-to-face meetings. So much assessment and recognition of employees, their work and its status, relies on good old fashioned give-and-take communication."

In PM, training and development is also an ongoing process. Employers cannot wait a year to decide on what training is appropriate because job situations are so fluid today.

Rewards should be continuous as well. Employees enjoy even small rewards: free treats from an ice cream truck in the company parking lot, special time off or peer-recognition programs.

For those new to the concept of PM, there are many ways to begin the process. Small business can start by adopting a simple set of business objectives, sharing them with employees and then e-mailing them to confirm how everyone has agreed to support them. There is also a wealth of PM information on-line and starting this fall, businesses owners can access information on how to assess employee performance via a new information portal and online learning centre designed by HRPAO and Human Resources and Skills Development Canada.

As for employers who feel they don't have time for Performance Management, Herrmann has this to say: "If you think you're busy now, imagine how busy you'll be when your business suddenly goes off line because your people aren't going in the same direction. Performance Management will go a long way in keeping your business in the intended direction."

GERLINDE HERRMANN, CHRP,is President of the Human Resources Professionals
Association of Ontario and President of the Herrmann Group Limited, a Toronto
-based company providing talent management solutions and services to businesses
across Canada.

MONICA BEAUREGARD, CHRP,is President of Bridgepoint Inc.,Toronto. Her firm advises clients in a variety of areas including functional and structural HR improvement initiatives, performance management, compensation and benefits, payroll systems, project management and recruitment.