Oct 01, 2014

The idea of managing an employee’s performance is a formalised way, according to set benchmarks, is highly controversial. Mostly I believe it is poorly understood as a system, and poorly implemented and utilised. There are a few controversies to consider. On the one hand, a performance management system is considered a measured and supportive means of setting goals with subordinates and tracking, and providing feedback on, their progress. On the other hand, critics believe that the system is nothing more than an administrative nightmare which befalls them once a year, with the accompanying flurry of meaningless paperwork and hastily convened meetings with employees, to obtain perfunctory information and a signature to say that the “review” has been conducted. Ironically, I believe that the way forward points to the performance system being the day-to-day way of managing employees. This has three benefits and they are:

1. Constant, progress towards KPI’s, in line with organisational goals;
2. Regular, scheduled, mini reviews to ascertain what’s on track and what needs support to bring the task back in line;
3. Establishing and enhancing the rapport between the supervisor and subordinate, as well as providing a valid and transparent process which benefits the employee, supervisor and the organisation.

Another controversy rages around the link between performance management and annual increases. Those who favour the link between performance and money have the view that if one is awarding increases, then what better benchmark to ascertain an individual’s increase than to look at specific performance. Those who oppose the link between the two argue that a performance management system should not be about the money, but about the attainment of goals, developing of skills, and training. In fact, they point out that when times are tough and employers are not able to offer increases, this does not imply that the employee has not worked well; their performance can be reviewed with an eye to personal development and achieving organisational goals which could have non-tangible rewards such as promotion, broader experiences and training opportunities. The best of both worlds would lie with a performance management system that offers all of the intangible rewards, and where salary increases are awarded, that these be implemented in a way which is favourable to the good performer. Poor performers would regrettably fare less well under this system and it is no wonder that they demand uniform across-the-board increases, as opposed to those determined on individual merit via a performance management system. This is my answer: performance management IS vital to providing guidelines for mutually agreed objectives, providing a sense of security around recognition and reward systems, and motivating employees through pay-for-performance.