The first stage in the Performance Management Cycle is to establish what is required. This will then provide a basis for measurement, from which gaps can be identified and action plans developed. There are two aspects to consider, namely the content of the performance standards, and the process for establishing them.
Performance requirements can be stated in a number of ways, including:
- Objectives, responsibilities, or accountabilities
- Task-related standards
- Definitions of competencies
- Statements of behaviour
Performance Objectives
One widely used performance management system for both management and staff is management by objectives. Typically, this starts with the setting of organisational objectives, which are then cascaded down to every level and to each individual. The initial round of objective setting can be time consuming, particularly in large hierarchical companies. However, once established the process is potentially easier. Objectives are generally goals to be achieved over a time period, and the employee is likely to have discretion in the methods adopted to meet them.
Research into the use of goals at work has established a number of requirements that are relevant to establishing objectives or similar performance standards.
Work objectives should be SMART, that is, goals should be:
- Specific not vague or too general
- Measurable against desired outcomes
- Agreed in advance and accepted by employees
- Realistic – demanding but attainable
- Time-related
Although the setting of objectives in some form is widespread, there are a number of well-established problems with objective setting.
- Organisational objectives are numerous, diverse, and sometimes incompatible. This can make it difficult to identify and communicate clear organisational objectives as a basis for the setting of individual objectives
- Individuals often feel objectives are imposed on them
- There can be a tendency to focus on the easily measurable objectives, and they may not be the most important
- Individuals interpret objectives in ways that lead to outcomes management did not expect
- Objectives can be quickly overtaken by events in a dynamic environment
Task-related Standards or Behaviours
The performance requirements of operative level jobs may be established by setting measurable operations procedures or standards, or by statements of expected behaviours.
For example, a simple standard for a customer service co-ordinator might be the length of time answering or dealing with a call. A health and safety officer hotel might be required to check machine lockdown processes twice daily. These standards are linked to specific tasks, and apply every time the task is performed. They therefore differ from the somewhat broader objectives that a manager might have. However, goal-setting theory and other factors considered in the previous section can be applied to task-related standards.
Establishing Performance Requirements
Goal setting theory suggests that individuals need to accept the targets that they are expected to achieve. In classic management by objectives schemes, superiors discuss objectives with their subordinates with a view to agreeing them, and middle managers are expected to propose their own objectives for improvement. On the shop floor, employee representatives have often been involved in negotiating targets in work measurement-based bonus schemes.
Establishing performance agreements, or performance contracts, conveys the notion of establishing agreement to what will be assessed. This does not mean that individuals should necessarily set their own objectives or task standards. Management have to coordinate and control the work process. However, a completely top-down approach runs the risk that individuals have no sense of commitment to what they are expected to achieve, and in some cases may expend their effort in finding ways round the targets. Management control nearly always relies on a degree of employee consent to be effective.
Where targets are subject to agreement, this is a social process that is affected by the degree of trust between the parties. A manager may persuade a subordinate to accept a target or work standard, and believe that they are in agreement. However, the perception of the subordinate may be that there was little choice but to accept the proposal from their boss, and so doubts were not expressed in the discussion.
In so doing, it is often seen as best practice for staff to perform job responsibilities and tasks from regular performance reviews when staff agree to, and sign off, their individual and joint team targets against quality procedures to which they have had a hand in writing and checking their performance against.
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