LACK OF executive support and not tying executives’ performance goals to operating results are the most common pitfalls in implementing a performance management system, according to DDI president Bob Rogers
LACK OF executive support and not tying executives’ performance goals to operating results are the most common pitfalls in implementing a performance management system, according to DDI president Bob Rogers.
Speaking on a recent visit to Australia, he also said that if senior leaders fail to embrace and reinforce use of performance management systems, the chance of their success greatly decreases.
“It seems obvious, but everything your organisation does should support achievement of its strategic objectives,” he said. “Performance management is a primary vehicle for doing this. The degree to which you align your performance management system to your business goals is likely to be the degree to which you are successful in driving results.”
Rogers cited research which has shown that 25 per cent of organisations do not tie their executives’ performance goals to operating results.
He said it was important for employees to know an organisation’s vision and mission is underpinned by business strategy (what things will deliver the business mission) and cultural strategy (the values and behaviours required to deliver the business strategy).
“Best practices in performance management are fairly clear cut and often reasonably well understood,” Rogers said. “The problem is that they are not consistently applied. We have seen that the absence of one or more of these best practices can be found at the root of most system failures.”
He said the best practices of performance management include: aligning performance management to support business goals and drive results; cascading accountabilities to all levels; training managers and associates in the skills they need to realise the benefits; balancing the ‘whats’ and ‘hows’ in the process of setting expectations and reviewing performance; managing the system as a process rather than a one-time event; promoting shared ownership; linking performance management to other systems; evaluating system effectiveness regularly and identifying process improvements; and having line management drive the system.
“In moving to a new system I see too many organisations putting too much focus on the forms and not enough focus on the best practices described above,” he said.
