If we think about it, the primary goal of studying Performance Management is to find tools and processes to enable any organization to perform better, reach their goals faster, and to stand out. In other words, the ultimate objective is to create methods to help leaders to add value to organizations. Digging a little bit, we may realize that some of the common ways to manage and lead our employees do not fit with today’s worldwide business environment.
During the industrial revolution, companies created performance management models where the primary goal was to increase production rates, and strict controls, rules, and divisions were set to get people to produce faster. Leaders’ success was directly related to how well they could control what people were doing. Leaders’ task was to tell their employees what exactly they needed to do. For example, people’s payment was directly related to the number of pieces produced, and the leader’s job was to enforce the rules. These kinds of enterprise models worked very well for many decades. However, in today’s business environment where globalization drives competition and exponentially change the way we do things over and over again, we need to rely on new leadership models, tools, and concepts.
Pulakos (2009) proposed a useful eight-step model to guide the creation of performance management systems that yield better results. Her model is a multi-step process where the primary goal is to promote a collaborative culture by identifying our employees’ strengths and areas of opportunity.
First, leaders set goals. We need to set objectives aligned with our company’s strategies and communicating those strategies and goals is elemental to promote a productive working environment and motivate our employees to be part of the organization’s success.
Second, managers and employees set objectives and expectations. Involving our employees in the decision-making process may be the best way to brain trust our ideas. If our employees are part of the process, they will know what is expected from them, and they will feel responsible for the outcomes which will boost their urge to perform better.
Third, managers and employees hold performance discussions. By promoting honest and practical discussions about performance and avoiding criticism, we will be able to identify areas of improvement and how we can help our employees to reach their potential.
Fourth, employees provide performance input. Listening to other’s ideas is essential to growth. It is necessary to take into consideration what our employees need and what they think about their performance an iteration with their leader and team members.
Fifth, knowledgeable sources provide performance input.It is essential to gather as many feedback as possible to understand how well we are doing things and where we can improve to enable our organization to compete and increase value.
Sixth, managers rate performance.We need to rate our employees based on their involvement and commitment.
Seventh, managers and employees hold review sessions. Back and forth communication is necessary to create a collaborative environment.
Eighth, HR decisions are made. The human resource team must have the capability to back every performance management process by promoting incentives to encourage positive behaviors and creating training programs when capacitation is needed to improve our team’s skills.
In conclusion, as leaders, we are responsible for the environment, climate, and culture of our organizations and teams. Leaders need to create situations to boost innovation and to promote disruption. Authoritarian models based on bureaucratic processes, control, compliance, individual goals attaining, and distrust do not fit with today’s enterprise requirements to compete. Leaders need to promote collaboration, agility, adaptability, and creativity. There are many examples of companies that have been left behind because of these new disrupters with low budgets that were able to see and lead things differently.