What is Performance Management?

There have been volumes written about Performance Management yet at its core it's really quite simple. It means that a company has embraced a culture of setting agreed goals, holding people accountable to those goals, and rewarding those who achieve them. This can happen on the macro-level at which strategic planning is more than an academic exercise; a plan is meant to be executed and people actually commit to do so. This can happen at the micro-level in which individuals are expected to set and achieve results, are measured and coached to those results, and are rewarded (or not!) for what they actually contribute to the company. This can happen at all points in between.

Here are three components to Performance Management that apply at all levels. They are a simple guide and a useful test.

1. Clear and agreed EXPECTATIONS. Does everyone know and understand what the desired outcome looks like? Does an employee truly know in specifics what is actually required of the job? Is a clear set of business objectives created and articulated? Are clear metrics in place to determine progress to plan? Success? Failure?
2. Regular and honest FEEDBACK. Accountability means "the ability to tell the story." Is every employee, team, business unit head asked on a regular basis how they are doing and what they are doing? Are the metrics applied to them? Is management giving true and timely appraisals of work done (or not done)?
3. Appropriate REWARD AND CONSEQUENCES. It has to matter. Paying those who achieve goals and who do well more than those who don't is the purest form of capitalism and is NOT favoritism. Not everyone gets a trophy. There are winners and losers. Performers and non-performers. The simple truth is that some contribute more than others and therefore should receive the greater reward. Let the under-performing, closet socialists complain. Life is not meant to be fair!