| I once saw a quote in a book by Tom Clancy, called | | | | training needs. |
| "Net Force" (Published by Headline Book Publishing, a | | | | However, if a company so chooses, there is nothing to |
| Division of Hodder Headline PLC, ISBN 0 7472 6040 0). | | | | prevent them carrying out Parts A and B at the same |
| The quote read: | | | | time, say both at the end of the year. But we do urge |
| "Remember the Rule of the 5Ps | | | | such companies to hold two separate discussions |
| - Proper Planning Prevents Poor Performance" | | | | between Appraiser and Appraisee, in order that |
| I could not agree more! (Actually the quote was the | | | | sufficient focus is directed to the employee's |
| 6Ps - I left out the four-letter expletive that went | | | | longer-term potential and training and development |
| before the word 'poor'!) In my view, the essence of a | | | | needs. |
| good performance management system revolves | | | | PMS has four basic components, which are largely |
| around planning - in this case individual performance | | | | guided by the business planning cycle. |
| planning, derived from organisational planning. When this | | | | Performance Planning |
| model is followed, not only will planned business goals | | | | In January (or at the start of the cycle, if it is not |
| be more effectively achieved, individuals will be more | | | | January) of each year, following the company's annual |
| motivated, as they know with greater clarity than ever | | | | business planning process, and the previous year's |
| before, exactly what is expected of them, and what | | | | appraisal on each Manager and Executive, the |
| their part has been in the company's success. | | | | Appraiser and Appraisee jointly AGREE targets for |
| Organisations that are better able to reward good | | | | the coming year, which must flow from agreed Key |
| performances, are planning for their future success. | | | | Result Areas. These individual targets cascade directly |
| The Performance Management System (PMS) which I | | | | from the company's corporate business objectives, |
| have designed for a number of companies here, has | | | | and are supplemented by more personal goals that |
| two distinct parts A and B, and is the means by which | | | | are often developmental in nature. |
| individual managerial or supervisory performance is | | | | Performance Review |
| linked to an organisation's business objectives and | | | | Throughout the year, Appraiser and Appraisee need |
| operating plans (Part A) and to the organisation's | | | | to have regular informal meetings to review progress |
| future through assessing the potential of each | | | | against targets. They examine together where |
| managerial or executive level employee(Part B). For | | | | revisions may need to be made in the light of changing |
| any company to be successful every Manager must | | | | business priorities, or where it is felt that a previously |
| establish and agree precise, measurable and objective | | | | agreed target may now be unattainable due to |
| standards and goals for individual performance that will | | | | circumstances beyond the control of the Appraisee. |
| in turn lead to improved performance by the company | | | | Changes to targets should not ordinarily be made in |
| as a whole. | | | | cases where targets have been achieved or |
| This Performance Management System (and its sister | | | | exceeded far earlier than expected. However, |
| system, covering clerical and operator level | | | | Appraiser and Appraisee may agree on additional |
| employees), is put together after many years of | | | | targets where this will benefit both the company and |
| experience with performance management, both as a | | | | the Appraisee. |
| Corporate Human Resource Manager and as a | | | | Whilst Performance Review discussions do not need |
| Consultant. Our aim is to provide our clients with all the | | | | to be recorded formally, Appraisers should keep a |
| company needs to introduce a simple, but effective | | | | simple record of the discussion to help with the formal |
| system of measuring and rewarding employee | | | | year-end appraisal. Any amendments to targets, |
| performances. | | | | however, should be recorded for help with the year |
| The Aims of PMS | | | | end appraisal. I would recommend that these reviews |
| · PMS aims to make every managerial and | | | | take place at least quarterly. |
| supervisory level employee completely aware of the | | | | Performance Appraisal |
| company's business plans, and through the cascading | | | | In December each year (or at the end of the cycle, if |
| of those plans to individuals, provide them with the | | | | company does not operate on a calendar year), |
| motivation to achieve, and then, the ownership of | | | | Appraiser and Appraisee meet to discuss, review and |
| success | | | | evaluate the Appraisee's performance. The Overall |
| · PMS is concerned with improvement - | | | | Appraisal Rating will determine the quantum of merit |
| organisationally through increased contribution by each | | | | increment to be awarded. |
| individual and personally through the broadening of | | | | Performance Development Assessment |
| experience and career opportunities. | | | | This takes place at mid-year, usually (but not |
| · It aims to make the appraisal of Managers | | | | necessarily) concurrent to the mid year review of |
| and Supervisors as fair as possible and less | | | | performance. It is separated in time from the formal |
| subjective, by focusing on planning, performance, | | | | Performance Appraisal in order that the focus is totally |
| priorities and key result areas. | | | | on the employee's future. This enables the discussion |
| · It seeks to provide rigorous and current | | | | to be free of the constraints often imposed by the |
| information about an executive in order to activate | | | | Performance Appraisal's focus on the Overall |
| appropriate training and development opportunities and | | | | Performance Rating and its link to financial reward. |
| to facilitate career progression. | | | | The completion of the Performance Development |
| The Role of PMS | | | | Assessment form helps us to obtain qualitative |
| PMS is central not only to a need to develop, train and | | | | information about each Manager's or Supervisor's |
| motivate employees, but also to its continued business | | | | abilities, potential, aspirations career direction and |
| success. It provides a structure to focus the resources | | | | development needs. |
| and activities of all Managers on achieving the | | | | Whilst this fourth component may not have short-term |
| company's major business objectives. PMS is the | | | | impact upon the company's business plans and results, |
| basis for assessment of performance, ability and | | | | it is clearly essential in the longer term. This is |
| potential and an essential source of data on | | | | particularly true when looking at the section on Long |
| employees for manpower and succession planning | | | | Term Career Potential. This forward looking |
| purposes. | | | | assessment examines the Appraiser's view now on |
| Completion of Parts A and B are best separated in | | | | the Appraisee's potential in fairly senior roles and is an |
| time, eg by six months. When the two quite different | | | | essential part of long term succession planning. |
| objectives of each part are separated in time, the | | | | There is so much that can be said and written about |
| experience of many major companies has been that | | | | performance appraisals, and I'll let this suffice for now, |
| far more effective attention is given to the | | | | but will return to the topic again in the future. |
| assessment of individuals' potential, development and | | | | |