How to Start Performance Management
PURPOSE: Performance Management is a broad term and often feels overwhelming to think about, begin by narrowing your field of vision to identify where to start.
State of the Union:
The first step to effective performance management is for leaders to reflect on the company. Ask your management team to stop and spend 15 minutes to reflect and answer the following five questions:
1) Where are we doing well, and where are we facing challenges?
When you answer this question, you find areas of high-performance and areas where improvements can be made, you’ve identified a need for performance management.
2) If we could have more data to help manage one area of the business, what would it be?
It doesn’t have to be an area experiencing challenge, or one that needs improvement. Your company may be doing fine or even excelling in the area, but if more data is desired you’ve identified a need for performance management.
3) What was the main topic of our last meeting and what data do we have for that topic?
A topic of discussion for a meeting is important, otherwise you wouldn’t meet about it. If you can name one topic from your last meeting, you’ve identified a need for performance management.
4) Is communication a strength of our company?
We mention communication here because it is integral to business when so many different parts are working together toward the same goal. If just one negative instance at your company has occurred due to a miscommunication then you’ve identified a need for performance management.
5) What do our customers care about, why have they partnered with us?
Hopefully this is the easiest question for your team to answer. You’ve identified the reasons, and you’ve identified a need for performance management.
*What has been identified above are categories, departments/teams, or aspects within your business, these are now referred to as ScoreCard Categories.
Everything that has been identified from the questions above is subject to a recency bias, that’s where data comes into play. Performance Scoring captures the factors that have positively or negatively affected each of the ScoreCard Categories that have been identified. The individual moments matter. After a week, a month, a year of capturing individual moments you have the objective data that is actionable. Let’s take a few examples:
Our customers care most about the turnaround time on service requests.
The ScoreCard Category is: Turnaround Time. Use Performance Scoring to capture those instances that led to an ideal turnaround time, and the instances that pushed a service completion back longer than expected. Use the data to prevent repeat occurrences of the factors that delayed the service completion, the net result is faster turnaround time – happier customers that start the next service request earlier – both increase the bottom line.
Sales are increasing, but we’d like more data behind what’s driving our growth.
The ScoreCard Category is: Sales. Use Performance Scoring to capture the factors that contribute to success and failure with the Sales Team. If Sales is constantly waiting on Marketing to finalize their tools, capture it. Use the data to prevent future delays when a new product or service is released and drive more growth.
One of our branch locations consistently generates more revenue than other locations.
The ScoreCard Categories are: Location 1, Location 2, etc. Use Performance Scoring to capture performance data at each location and generate comparison reports. Now management has actionable insight to improve the productivity at each location, generate more revenue and close the gap between an all-star branch and those experiencing less success.
Performance Management has such a broad interpretation because it is all encompassing. The company or organization is never perfect, departments are never perfect, and individual employees are never perfect. Integrating a Performance Management System like Performance Scoring reflects the desire to improve and be better, realizing that every moment we develop individually contributes to greater success in our company. This starts with leaders taking a step back to reflect and identify areas where improvement can be made, then utilizing Performance Management tools to better effect the positive performance change their company’s desire. Continue Performance Management with our next post on how to identify Factors.