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FIVE STEPS TO BETTER PERFORMANCE MANAGEMENT

BY KIERAN COLVILLE, KENEXA , AN IBM COMPANY

otivating and retaining top talent, conducting accurate performance ratings and dealing with underperformance are essential in business, but do not always come naturally to leaders.

A strong performance management culture is commonly accepted to be a vital component of a high performing organisation, but new research from the High Performance Institute by Kenexa, an IBM Company, has highlighted just how much it matters to the engagement and performance of employees. HIGHER EMPLOYEE ENGAGEMENT LINKED TO HIGHER SALES Many research studies in recent years have demonstrated a link between employee engagement and team or organisational performance. The latest research from the High Performance Institute has found that a single percentage point increase in an Employee Engagement Index (EEI) score equates to a $2,936 increase in sales per employee. This supports the assertion that employee engagement is not just nice to have, but links directly to bottom line, financial performance. BETTER PERFORMANCE MANAGEMENT LINKED TO HIGHER EMPLOYEE ENGAGEMENT An analysis of employee engagement scores and employee attitudes toward performance management has also revealed some interesting links. For example, when employees understand how their work fits into the goals of an organisation, their EEI score is 63.6 percent. When they dont understand how their work fits into the goals of an organisation, their EEI score is just 17.5 percent. This 45 percentage point gap is dramatic and signals an urgent need to ensure that performance management is driving engagement up, not down.

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IMPROVING PERFORMANCE MANAGEMENT FOR HIGHER ENGAGEMENT AND SUCCESS As we have shown, good performance management is linked to high employee engagementand high employee engagement links to an increase in revenue. The argument is clear, but many organisations are yet to embrace best practice when it comes to performance management. The top seven mistakes of performance management reported by employees are summarised in Figure 1. The good news is that these seven mistakes can be addressed by taking the following five actions to help drive engagement and, therefore, bottom line results. FIGURE 1: TOP SEVEN MISTAKES OF PERFORMANCE MANAGEMENT
1. 2. 3. 4. 5. 6. 7. Employees personal objectives dont align with business objectives Feedback is only given during appraisal meetings Not including customer recognition as part of employee feedback Managers not taking personal responsibility Employees dont have clear direction to meet expected goals Employees dont have insight into team expectations Employees dont have a clear understanding of how performance is being measured

RECOMMENDED ACTIONS Stop Using the Term Performance Management when Talking about How Managers Lead their Teams Performance management has connotations of a sterile process, rigid appraisals and the managing of under-performance. If we are going to help everyone connect with this process, then we recommend we lose the term and use language such as leading high performance. If you ask any manager if they should engage in performance management, their response might be I know I should but I have so much going on. However, if you ask a manager if they should lead their team to high performance, it is unlikely any competent manager would respond that this is something additional to their day job. Keep the Process Simple The process side of leading high performance (objectives, appraisals etc.) needs to be simple and tied into the working practices of managers. This will ensure that the process sticks and is not seen as some sort of add-on to their day jobs. This will then enable the process to deliver business outcomes. Hold the Mirror up to Each Leader Putting up a list of all your managers in the office and asking employees to nominate the principal motivators for each manager is a powerful, if controversial, suggestion, but it does point to the need for managers to have greater self-awareness of their motivators and the potential risks and opportunities these present. While it may sound a little soft, we do need to accept that as human beings, we are driven by reason and emotion. Understanding our own drivers is a crucial first step in changing behaviour, but it needs to be done in a safe environment. Providing a focused assessment of leaders preferences and motivations may be more powerful than giving them a 360 or a capability assessment if we are going to get under the skin of what really drives them to act the way they do. If this cannot realistically be done immediately, then we recommend focusing on critical job families and the managers that will have the biggest impact on business performance. Getting these managers to build selfawareness so that they can see the benefits will create a set of early adoptersand others will follow. Sell Them High Performance at a Rational and Emotional Level Understanding what drives leaders allows organisations to sell the benefits of leading high performance in a way that really connects. There is much talk around aligning leadership requirements to business outcomes as the essential rational argument, but connecting with managers emotionally (and on an individual level) will also help them see how using the right behaviours are essential to satisfying their core drivers, which motivates them. Show Them What Poor and Outstanding Look Like Once managers realise the rational benefits of managing high performance, they then need to see what poor and outstanding look like so they can change their behavioura capability shift.

Using real-life leadership scenarios and allowing managers to observe and practice conversations will help them better apply the core skills of effective management. This method has had some fantastic results in building manager capability, and there have been significant shifts in employee engagement and performance enablement scores of organisations that have implemented this type of approach. As our research has shown, an organisation that works hard on creating a performance management culture where feedback is sought and given will see an increase in the motivations and engagement of its workforce. n
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ABOUT THE AUTHOR Kieran Colville Kieran Colville serves as the Head of Leadership Solutions EMEA at Kenexa, an IBM Company, where he develops business focused leadership and talent solutions for a wide range of global organisations. He has extensive experience working in financial services, infrastructure, transport, engineering, pharmaceutical and non-profit industries, with prior operational experience in financial consultancy and publishing firms. He specialises in developing talent management and leadership development solutions that are clearly aligned with business goals to assure assessment, development and retention of leaders and talent, which ultimately delivers value to the bottom line of a business. In addition to his assessment, leadership and behavioural work with clients, he works pro bono with an entrepreneurial non-profit organisation. Among his many achievements, Mr. Colville supported the creation of millions of dollars of efficiency savings for a large infrastructure organisation by increasing employee engagement, reducing grievance rates and enhancing behavioural capability. He also helped identify future leaders and technical talent, provided leadership benchmarks and developed a behavioural programme that increased effectiveness of support programmes. For a Middle Eastern telecommunications organisation, he supported an organisational transformation that increased effectiveness and provided opportunities for market expansion. He writes regularly for human resources and leadership publications, including Strategic HR, HR Director and the Grapevine. He holds a Bachelor of Arts degree in Politics and Philosophy from Birmingham University.

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