1. Performance management overview

     What is performance management

     A performance culture

     The impact of performance management

2. Performance management framework

     The key role of leaders

     Annual business planning

     Measure what matters: use of performance indicators and measures

     What can go wrong?     

3. Performance review

     Overview

     Purpose

     Objectives

     Who and when?

 

4. Individual performance management 

     Introduction

     Objectives

     What a good one-to-one meeting looks like

5. Team performance review

     Participants

     Scope

     Objective

6. Executive team/management team review

7. Committee or board review 

8. Conclusions

 

1. Performance management overview

 

What is performance management?

A definition

“Performance management is a set of management and analytic processes that enable the performance of an organisation to be managed with a view to achieving its pre-selected strategy and strategic objectives. The framework is the structure that the processes fit within. Therefore, it not only serves as an aid to managing performance, but more importantly as an aid to understanding how every department and individuals performance contributes to the success of the business.”

Fundamentally, performance management is about your organisation asking itself, and answering, a series of questions:

  • What are we here for?
  • What do we value?
  • What do our customers need and want?
  • What opportunities do we have to deliver it?
  • What challenges do we face? What constraints or obstacles exist?
  • What do we want to improve about how we work?
  • What do we want to achieve?
  • How are we going to get there?
  • Whose job is it?
  • How will we know if we’re succeeding?
  • Are we on track?
  • If not, why not? What are we going to do about it?

It is about taking action to make outcomes better than they would otherwise be. Its purpose is to improve the quality of the products and services of your organisation.

 

A performance culture

Performance management is also about developing and embedding within your organisation a performance culture: a way of working in which continuously striving to improve is part of the daily work of the organisation. It is the opposite of a culture in which everybody carries on doing the same things in the same way because that is the way they have always been done.

Performance “culture” is a shared ethos where there is a shared responsibility and ownership for organisational objectives and a commitment to achieve measurable targets.

  • A performance culture is one in which:
  • There is a strong focus on performance and a real desire to improve;
  • There is a recognition of the need to change;
  • Customers are at the heart of everything;
  • Constructive challenge and open debate are the norm;
  • The emphasis is on finding solutions, not apportioning blame; and
  • External comparison and challenge is invited.

In a performance culture, all activity – at organisational, team and individual level – is based on a cycle of “learn, plan, do, and review”.

 

The impact of performance management

The Work Foundation research into performance management conducted by Armstrong and Ward (2005) reached the following conclusion about the impact of performance management:

“Performance management has the potential to improve the performance of organisations and act as a lever to achieve cultural change. A focus on performance can bring real rewards for organisations. Performance management can be the key space or mechanism for dialogue in an organisation. An organisation’s choice of where to focus its attention in relation to performance management may in part determine its future and can certainly guide its culture.”

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2. Performance management framework

A “performance management framework” groups together the activities that are aimed explicitly at improving overall organisational performance.

There is no single definition of what a performance management framework should or should not contain, but the most widely accepted framework defines five essential building blocks. Figure 1 illustrates the framework.

To work effectively, the five blocks must all be in place, be fully integrated and be embedded in the management of your organisation at all levels. If essential parts of the framework are not working well, it is likely to have consequential effects elsewhere.

There is a natural sequence in which each of the building blocks needs to be addressed. For example, it is difficult to design an effective individual performance plan if meaningful business targets have not been set.

Aspirations

What are the vision, values, mission, objectives and goals of your organisation? Have these been captured and communicated effectively, and is there widespread acceptance of them across your management team?

Plans, performance measures and targets

Have the goals been broken down into a series of projects aimed at clearly demonstrating improvement? Have related performance measures been identified, for example Key Performance Indicators and milestones?

Ownership and accountability

Have the projects been allocated project managers and project sponsors; and have they been broken down into a series of tasks and milestones; and have those tasks been delegated to one or more individuals to progress?

Performance review

Are each individual’s delegated tasks regularly reviewed as part of a formal process? Does each team undertake reviews of progress? Does either the Executive Team or Management team undertake formal quarterly reviews of progress? Are actions created and documented as a result of the reviews?

Support and reinforcement

Are staff given adequate training to fulfil the delegated tasks? Are there projects aimed at developing staff competencies? Is evidence gathered and are projects linked to relevant documentation?

performance management framework

Supporting these concepts further, the FABRIC Report (the Joint Publication by H.M. Treasury, the Cabinet Office and the National Audit Office entitled “Choosing a right fabric, a framework for performance information”) also says that good performance management information systems should be:

Focused on the organisation’s aims and objectives;

Appropriate and useful for stakeholders who are likely to use it;

Balanced, covering all the significant areas of work and at the same point in time providing a snapshot of what your organisation is doing;

Robust in order to withstand corporate changes;

Integrated into the organisation, being part of the business planning and management process; and

Cost-effective, balancing the benefits of the information against the costs.

 

The key role of leaders

To be effective, performance management needs visible, enthusiastic and unrelenting commitment from the Board and Executive team. Leaders should show, by their actions as well as their words, that:

  • Managing and improving performance is important.
  • Poor performance will be tackled and achievements and successes celebrated.
  • Performance management is carried out within a culture of open debate and constructive challenge, with the focus on solving problems rather than apportioning blame
  • Board members, executives and managers regularly reflect on what they need to do differently as a Board, as a team and as individuals.

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Annual business planning

At the heart of your organisation’s performance management arrangements is the annual planning process. The key purpose of the annual business planning process is to translate your organisation’s vision and objectives into operational action plans.

The annual corporate plan should:

a. Review the operating environment in which your organisation work.

b. Provide direction for your organisation (all functional areas) for the next year.

c. Define the scope of your organisation’s activities in terms of what it will and will not do.

d. Match the activities of your organisation to the environment in which it operates so that it maximizes opportunities and minimizes threats.

e. Synchronise the organisations activities to its resource capacity.

 

Annual Business Planning

Most plans succeed when they are thought out as a cycle as opposed to being a straightforward process. The annual planning cycle in figure three identified the key stages that should be undertaken as part of business planning. This builds upon the traditional plan, act, do review model.

 

Annual Business Planning

 

Measure what matters: use of performance indicators and measures

One key aspect of the planning cycle is the identification of measures and PIs. It is important that your organisation measures what is important for your organisation’s success. Measures and performance indicators can aid your organisation to monitor performance including:

  • Assessing the standard of products and services; Measuring the effectiveness in carrying out key functions;
  • Customer satisfaction;
  • Cost of products and services including value for money; and
  • Efficiency in providing products and services.

Your organisation should set ambitious yet achievable targets and most importantly ensure that performance is regularly measured, monitored and acted upon. There are 3 critical success factors in measuring what matters:

Strategic alignment

One of the first steps in developing a performance management framework and identifying your key performance indicators is to identify your business goals and priorities. It is crucial that you align your data with your organisation’s strategy for better outcomes. Without knowing what you want to achieve it is impossible to measure the right things and use these to take action. It is also important that the metrics and goals of your organisation are simple enough to understand that each employee can see that the tasks they work on each day impact the overall company’s performance.

Communication and accountability

Once measures have been identified, communication and accountability is an integral part to ensuring that you measure what matters. Do managers and staff know and understand what is being measured? Do managers and staff understand why they measure and monitor the things they do? Are managers and staff accountable for performance?

Leadership must then review, challenge and provide regular feedback on performance.

Actionable insight

Simply measuring something does not ensure that some action will then take place. Measuring what matters is an important starting point, but there really is no point in measuring things if they don’t get done. Regular measurement and reporting keeps you focused but you need to use that information to make decisions to improve results.

In order to measure what matters you must ensure that what gets measured makes sense, aligns with goals, is well communicated and is followed-up with relevant action.

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What can go wrong?

Some of the common problems that impede effective performance management are:

  • Thinking it will be easy. It is not. Effective performance management needs commitment, rigour, creative thinking, determination, tough decision-making, patience, resilience, an open mind, a thick skin, a clear focus on outcomes, time and resources.
  • Thinking it is something you do in addition to the “real work”. This is the real work.
  • Side-lining it – making it the responsibility of one person or team.
  • Focusing too much on the mechanics of the system rather than on the purpose – to help to improve services.
  • “Paralysis by analysis” – too much information.
  • Failure to understand the different working processes and practices of different parts of the organisation.
  • Expecting the performance system to do the hard thinking.
  • Not being prepared to tackle difficult performance issues.
  • Not keeping the system under review.
  • Failing to invest the necessary resources in support, training and communication.
  • Failing to involve staff or prepare them for change.
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3. Performance review

 

Overview

The review process follows a reverse path to the planning process. Reviews start at the lower level (performance appraisals, and 1 to 1 meetings between staff members and their managers) and cascade upwards through team meetings to management reviews and committee and Board meetings.

Performance reviews are carried out throughout your organisation so that all staff are involved in reviewing progress and performance and feel connected with the overall objectives of the organisation.

Performance Management

Purpose

The purpose of this process is to review progress and performance against the Business Plan to ensure action is taken to achieve the best possible performance for the organisation.

 

Objectives

  • To identify where progress and performance is not on track to achieve planned performance levels and to take action to get performance on track.
  • To identify successes (and failures) and what has been learnt from them.
  • To identify the main objectives to be delivered in the forthcoming period.
  • To identify the main obstacles to delivery in the forthcoming period.
  • To put team performance in the context of the overall aims of the organisation.
  • To share learning and context within and across teams.
  • To increase and share the cross-functional understanding of organisation wide performance.
  • To challenge teams to greater levels of performance.
  • To celebrate success and recognise the achievement of teams and individuals.
  • To report on progress and performance to customers and other stakeholders.

 

Who and when

As a minimum, structured performance reviews should take place quarterly. More frequent reviews may be appropriate for certain areas and at certain times.

  • Individual performance reviews would tend to be on a more regular basis, typically monthly, but in some cases weekly.
  • Team meetings are held following all of the individual performance meetings for a team, involving all team members, and typically on a monthly basis.
  • Executive team, and/or management team would typically monitor and review performance on a quarterly basis, after all team meetings have taken place.
  • Committees, board, tenants, other stakeholders would receive published performance information for review and discussion on a quarterly basis.

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4. Individual performance management

 

Introduction

The tasks that individuals need to achieve, in order for the organisations objectives and goals to be achieved, perform an integral part of the targets set during the annual performance appraisal process.

 

Objectives

During the course of the year the manager meets individually with each member of his or her team on a regular basis to:

  • review performance since the last meeting and identify achievements and learning points;
  • identify where progress and performance is not on track to achieve planned performance levels and to identify action to get performance on track;
  • identify the main targets and tasks to be delivered in the forthcoming period;
  • identify any obstacles that may get in the way of successful delivery in the forthcoming period and to identify action to overcome them; and
  • review progress against the training, development and support actions agreed in the annual appraisal and at subsequent one-to-one review meetings.

The one-to-one review meeting is also the means through which the manager formally carries out his/her line management responsibilities in respect to issues such as:

  • annual leave and time-off-in-lieu;
  • sickness absence;
  • non-compliance with corporate or team policies, procedures or processes;
  • non-compliance with statutory and corporate standards and values such as those relating to diversity, customer care and Health & Safety; and
  • personal matters on which the individual may welcome support and/or that may be having an adverse effect on performance.

It is stressed that the structured one-to-one meeting is an addition to, not a replacement for, the daily feedback, coaching and guidance that a manager provides.

 

What a good one-to-one meeting looks like

A good one-to-one meeting is one in which:

  • the manager emphasises what has been done well, gives constructive feedback on what might be improved and how lessons learned can be put into practice;
  • the manager and postholder reflect jointly on the coming period, identifying possible problems, risks and solutions;
  • where the manager raises concerns about the postholders performance, he/she communicates clearly what the concerns are with reference to documents defining the required level of performance and with specific examples to explain and illustrate the shortfall in performance;
  • where the postholder raises concerns about factors affecting their performance, he/she communicates clearly and gives specific examples to explain and illustrate their concern;
  • performance is analysed, not personality; and
  • ends positively with an agreed action plan.

 

5. Team performance review

 

Participants

Team reviews are always conducted in a group setting, and tend to be structured by functional area or service area, for example, IT, Finance, etc.

Where there are a series of performance review meetings within a directorate, it is helpful if more broadly focused directorate team meetings are held at the end of the series of meetings.

 

Scope

The team review reviews progress and performance against all aspects of the team’s projects and tasks:

  • Any performance indicators and their associated targets;
  • Any team projects, tasks and milestones;
  • Any tasks allocated to team members, that originate from another teams projects, and have been identified at one-to-ones as causing difficulty; and
  • Any other local performance measures.

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Objectives

The objectives of a team review are to:

  • review the progress of actions from previous team meetings;
  • assess and analyse performance , particularly:
  1. departmental project progress
  2. departmental key performance indicator
  3. departmental risks;
  • identify the cause(s) of any under-performance;
  • put in place and establish monitoring mechanisms for remedial action;
  • learn from problems (and successes); and
  • look ahead to risks and challenges in the next period and put in place action to address them.

 

6. Executive team/management team review

At this stage, the main objectives are to:

  • review corporate projects, key performance indicators;
  • identify actions to be taken by team members to address identified issues;
  • identify and address any cross-functional and organisation-wide issues arising from the team performance reviews;
  • as necessary, decide the relative priorities for action, and the required resources;
  • agree recommendations, if any, to be put to Committee/Board; and
  • agree messages to be communicated to staff, such as, congratulations on achievement, priorities for the next period.

 

7. Committee or Board review

Each Committee, and the Board, receive a full report on progress and performance against the organisational plans.

The objectives of the report are:

  • To highlight
  1. achievements in the period reported on;
  2. areas of under-performance and the remedial action being taken to get performance on track; and
  3. risks and challenges in the coming period and action being taken to address them
  • as necessary, to make recommendations for approval. This might include recommendations for:
  1. allocating additional resource or re-allocating resources;
  2. exceptional action to address a particular issue; and
  3. a change to a previously agreed target or timescale where circumstances make the original target or timescale no longer realistic.

 

8. Conclusions

Success is all about clear strategic direction and leadership, effective planning, regular review and actionable insight. Ensuring that all these components are an integral part of your organisation’s performance management framework is critical to success. A pneumonic for success that may help is as follows:

Shared vision;

Understanding;

Communication;

Culture;

Expert help and advice;

Software; and

Strong leadership.

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