A Performance Management System (PMS) offers a guiding map to direct efforts and to assess how successfully organisations are meeting their business objectives. Successfully implemented PMS provide productivity improvements and enhanced strategic capabilities. Research, however by two Stanford professors Robert Kaplan and David Norton, over a period of 20 years, suggests that less than 30% of an organisation’s time is spent on work that contributes to the organisation’s goals.
An effective PMS can offer opportunities to work on more effective organisation goals and adopt a more wider emphasis and integrated approach to communicate:
- what the organisation business strategy is and how do individual/s performance link to this
- a shared understanding of what the achievement goals are and the mechanism to achieve them
- the setting of benchmarks for what success will look like
- links to the culture and values of the organisation and preferred ways of behaving
- a process to manage own and others performance (behaviour and outcomes)
- measures of year-round performance and celebration of success
- opportunities for support, ongoing feedback, learning, collaboration and mechanisms to ensure success and not just measure it
- motivation for performance at individual, team and organisational level.
Going forward I see some other key opportunities that will evolve for a PMS to:
- encompass more long-term performance criteria that short-term outcomes overlook or even erode
- designing for maturity levels of organisation and a move to a more performance culture
- moving from monitoring to evolving strategic evaluation and from silos to more systemic and collaborative efforts
- moving from purist to mixed; collective; project-based and matrix models
- factoring global implications especially with Mergers and Acquisitions and future-proofing systems for longer terms strategic outlooks
- move from solely strategic alignment to strategic congruence
- challenge agile organisations on “performance failure” versus innovative risks
The above challenges offer some interesting opportunities and times ahead for PM systems.
Johnson, G. (2017). The authority guide to performance management: How to build a culture of excellence in the workplace. UK: The Authority Guides
Kaplan, Robert S., and David P. Norton. 2001. The strategy-focused organization: how balanced scorecard companies thrive in the new business environment. Boston, Mass: Harvard Business School Press.
Pulakos, E. D. (2009). Performance management: A new approach for driving business results. Wiley-Blackwell.
Van Woerkom, M. and de Bruijn, M. (2016). Why performance appraisal does not lead to performance improvement: Excellent performance as a function of uniqueness instead of uniformity. Industrial and Organizational Psychology, 9(2), pp. 275–281