Performance Management Systems

People are performance junkies--we are infatuated with performance. Fantasy football is a game which is based on the performance of football players. The stock market closely watches the financial performance of publicly traded companies. Voters examine the performance of elected politicians and officials when election time comes. We issue rewards when performance is strong, and punishment when performance is weak.

Businesses need to pay close attention to their performances. As noted above, publicly traded companies are examined closely by the institutions that hold shares. A company that performs well will see its stock price rise. A company that doesn't perform well will see its stock price fall. Publicly traded companies aren't the only organizations that need to monitor their performances. To be successful, any organization should measure and analyze its performance.

Performance Management Systems

There are many parts to an organization. Executives, employees, customers, products: these are the central components of any business. The success of a company is dependent upon each component performing well and in sync. A company with great products and employees will go nowhere if the executives take the company in the wrong direction.

This forces organizations to examine the performance of every level of the company. A company that measures the performance of field employees and not executives is like a football team basing the performance of the offense on just the offensive line and not the quarterback. After all, it is the quarterback who makes the decision as to where the football is thrown. Similarly, it is the executives who make the major decisions as to where the company will go.

Basically, performance management systems should measure the performance of the entire company. In the past, performance management systems pretty much just measured the performance of the employees. These appraisals can have a disastrous affect on employee morale, and hence productivity. Fortunately there are ways to design a performance management system that will benefit both employee and company.

Setting Up a Performance Management System

The goal of a performance management system should be to improve employee and organizational development. A well designed performance management system will not be a drag for managers and employees to participate in. A well designed system will likely have a positive effect and ideally increase productivity and hence performance.

Setting up a performance management system may take considerable effort and time. Once the system is set up, however, it takes minimal effort to implement. One of the most important components of a performance management system is definition. Exact definitions will give employees and managers a clear picture of what is expected. Define everything about the job's responsibilities and duties. Clearly state what is expected and what goals are to be met. Define the priority of each job, goal, or performance measure. Clear definitions will erase many of the doubts employees may have of the strength of their performances.

Maintain records of employee performance. Make notes of an employee's positive and negative experiences throughout a time period. Well kept records will allow both manager and employee to have a clear picture of what has transpired. Focus on getting feedback from a variety of sources. Customers, coworkers, supervisors are all viable sources for feedback on employee performance. A broad spectrum of feedback is better than feedback from just one source. Try to provide positive feedback, nobody likes to hear only what they did wrong.