Managing the performance of people requires a systematic approach. A previous client, which was a five star resort, had severe performance management problems borne of an approach, which in no way could be described a systematic. they had no performance management system.
The resort had 125 bedrooms, a spa, tennis court, two championship golf courses, beautiful scenery and walking tracks, state of the art conference centres, a restaurant managed by a renowned chef, two cafés, a bar and a members bar and lounge overlooking the golf course they played on.
It had approximately 80 permanent staff and up to 60 casual staff at peak season.
The smoke and mirrors performance management system
Interviewing the HR manager revealed that job descriptions were in place, standards were written with attendant work instructions where necessary. Appraisals were conducted every six months. Inductions were carried out with new recruits who then faced a probationary period. Further discussion revealed that managers worked together to interview and recruit new staff. Also, a comprehensive set of training programs were made available by head office for the development of staff.
Interviewing the general manager revealed that staff turnover was approximately 55% per annum, including 45% amongst permanent staff. It was also indicated that sales and profit targets and employee and customer satisfaction targets were rarely met. The only time that targets or goals were met was whenever there was a crisis situation, when people had to pull together to meet an objective. When business-as-normal resumed, targets and goals were not met.
The two interviews provided a conundrum. How could what seemed to be a reasonable performance management system fail to produce results when short term, informal performance management in a crisis produced good results?
Interviewing middle managers and frontline workers provided the answers.
The reality slap
Interviews for recruitment were a ten minute chat over coffee, which everyone passed as long as they were breathing and could speak clearly. Recruitment was always done in crisis mode with little attention to anything other than getting a body in front of customers.
Induction was rarely completed as the ‘body’ was required on the job as soon as possible.
Job descriptions were available for all positions, but were written as a generic job description in head office and bore only part resemblance to what happened at the resort. The job descriptions contained more than thirty key performance indicators for each job, most of which could not be measured, hence very few managers used them.
All recruits were accepted at the end of their probation period. In five years, over 200 employees had been accepted at the end of probation and none turned down. In three years no employees had been terminated for poor performance. Some had been terminated for extreme poor behaviour such as stealing and sexual harassment.
Less than 40% of all employees had a formal performance review in the last two years.
Only ten employees had training other than informal on-the-job training with their supervisor in the last two years.
Performance management at the resort was a tick the box exercise – unless there was a crisis. When the crisis was over, the organisation reverted to ticking the box.
The resort achieved the performance expected by the manner in which they designed and implemented the components of the performance management system; haphazard, dependent on individual manager’s commitment and expertise and with no particular goal in mind.
Recognising performance and behaviour shortfalls
In order to manage performance, the performance management system must be able to recognise and monitor performance and behaviour shortfalls.
Performance shortfalls relate to:
- The essential job requirements as identified in the job description
- Quality e.g costs above budget, not meeting operational objectives,
- Quantity e.g. productivity below budget, work bans, employee turnover
- Job knowledge
- Goals identified in the regular formal appraisal
- Performance elements of agreed actions from coaching, counselling and confronting sessions
- Company policy standards, for example:
- Not completing performance appraisals on time
- Quality, occupational health and safety or environment failure
Behaviour shortfalls relate to:
- Disruptive behaviour
- Breaching company policy and standards, for example,
- Matters of a criminal nature
- Bullying and harassment
- Overreaching authority level
Monitoring Performance Management System KPIs
Policies, processes, KPIs for performance and behaviour should set within the performance management system. Example KPIs might include but not be limited to:
- % days absent
- %customer complaints
- Severity of customer complaints
- Training attendance
- Transfer of learning to the workplace
- Employee satisfaction
- Customer satisfaction
However, in addition to KPIs to monitor individual performance and behaviour, the performance management system itself needs to be measured. Both lagging and lead indicators should be used.
Lagging Indicators vs. Leading Indicators
Lagging indicators are KPIs that provide information about desired or undesired events that have already happened.
This includes indicators such as retention rates, disciplinary actions taken, and so on.
Lagging indicators are recorded by most organisations and allow them to monitor their performance against industry trends.
Leading indicators are designed to drive and measure activities that are carried out proactively, before they occur.
Leading indicators enable the design and implementation of intervention strategies to address negative trends and loss events.
Some examples which are implemented as leading indicators in workplaces are:
- Attendance at planned appraisals
- Coaching activities undertaken by supervisors
- Feedback from employees regarding individual supervisors
In one sense, leading indicators are better because they encourage proactive measures to improve performance management.
Lagging indicators may tell you that you are going well, or they may tell you that you have a problem after it’s occurred!
Analysing Aggregate Data
In order to gain a comprehensive picture of performance management in an organisation, an in depth approach to data collection needs to be adopted. A set of tools to capture data and analyse it must be developed. Such tools to capture data include:
- Forms and checklists
- KPI charts and graphs
By analysing the data collected, you can identify and analyse high risk areas or departments and plan your interventions accordingly.