Effective performance management is crucial when it comes to executing successful growth plans. If you are not on top of your performance KPIs for each part of your operation, then you simply won't be able to predict your business outcomes by the end of the financial year accurately. Nor will you know what steps you should be taking to prevent under-performance when you come to the end of a reporting period.
Of course, performance management is not simply, or even primarily, about keeping employees under scrutiny. What is important is that each team or department has an onward reporting structure which allows management reporting to offer a true insight into the performance of the organisation as a whole.
Only by setting goals or business objectives will you be able to keep track of performance via whichever KPIs you choose to set.
What discrepancies do you need to keep your eye out for to make sure your performance management strategy is really delivering?
1) Your KPIs look similar
If an employee produces very similar results week on week, then they are a consistent performer. This is what most line managers aim for in principle, but what is rarely achieved in practice. The truth is that most people's performance varies over time for many different reasons. You might need to set variance parameters for some of your KPIs to make sure they are being measured in a fair and accurate way.
2) Your metrics disagree with one another
If the data you produce in your reporting is contradictory in some way, this may be a sign of a systemic problem. Perhaps your figures show that you are shifting more products but that profitability has slumped. If so, then does this mean your expenditure is too high?
3) Your management reports show poor performance
If your management reporting software indicates that your organisation is operating poorly, but everything else seems okay, then perhaps your financial reporting is indicating an issue that you are not seeing via your KPIs. It may be that you need to audit your processes carefully in such cases.
4) You are lowering target expectation
Sometimes underlying market conditions mean that it is necessary to lower your expectations in terms of the targets you are setting. This is inevitable from time to time, but if you find it happening year on year, then it can be a sign your performance management structures aren't right – and are simply tolerating worsening performance rather than encouraging improvement.
5) Time-sensitive projects slip
All organisations face difficulties meeting deadlines from time-to-time, but your performance management may not be up to scratch if senior managers only find out at the last minute about over-running projects. Delays and blockages should be highlighted long before they cause issues with a well-run management performance system.
6) Your software infrastructure does not support performance management
If your business runs software systems for design, implementation, accounts, customer service and post-sale support, then performance management should also be digitised. If you are relying on forms being filled in and paper-based SWOT analysis to set targets, then adopt a software system that is truly built to the needs of modern performance managers instead.
To improve your performance management, call our advisers at Clearview Systems and find out about our latest performance management software. We offer the know-how you need and can arrange a free, no obligation demonstration of our software platform.