Do you want to lose 62 million dollars a year? Without implementing a performance management framework, that’s the average loss according to a recent survey. David Grossman reported in “The Cost of Poor Communications” that out of 400 companies with 100,000 employees each, he cited an average loss per company of $62.4 million per year because of inadequate communication to and between employees.
Although your company may be smaller in scale, putting a successful performance management framework in place ensures great communication within your organization and an understanding of how each employee plays a pivotal role in achieving company goals.
Before we talk specifics, let’s discuss what performance management is and what it is not.
Employees need to feel appreciated and that their company cares about their career advancement. In return, managers get engaged and happy employees who want to perform and meet company goals. A performance management framework lays out a process so everyone is on the same page. Although there may be performance reviews at set intervals, performance management is a fluid and flexible framework that is always evolving. Everyone needs to understand the company mission, what the key objectives are, and what their role is in driving the company to success.
Creating a performance management framework
After you’ve created an outline for your performance management framework, it’s time to put it into action. If you don’t have a performance management template or software, it’s smart to consider one.
Basically, performance management has shifted over time from a more pyramid approach, top-down organizational approach to more flat collaborative environment. Using a learning scorecard, this achieves this team mentality. Plus, it’s is a way for managers to strategically plan and then to communicate to employees how to achieve this plan. That way everyone knows their part in achieving the organizational goals and it minimizes poor communication and execution.
Step #1: Add your company goals
Once you have defined your four areas of your balanced scorecard framework, it’s time to add your overall goals or mission for your company. Remember to keep in mind your four balanced scorecard components and how this mission relates to each one.
Step #2: Create training objectives
Next, create 10 to 15 training objectives that help achieve the mission or strategy of your company. Remember to make these S.M.A.R.T. (specific, measurable, attainable, relevant, and timely.) Keep in mind that feedback you have gathered from stakeholders, employees, managers, and customers. Think about what strengths, weaknesses, opportunities, and competition are involved in each of these objectives.
Step #3: Decide on measurable KPIs
After you have your objectives, what measures are needed for achieving each of these? Measures are a way to see if you are on track for achieving your objectives or not. Try to keep training KPIs to no more than three per objective. If you find you have too many measures per objective, it may mean breaking an objective up into more objectives. Make sure these are written in a way that all employees understand what they mean. Again, communication is key.
Step #4: Set attainable targets
The next step is assigning targets to each measure. These need to be achievable, but should also be a bit ambitious. Targets are the numbers and the percentages for measures. For example, increase by 10 percent per year or 30 per month. These are the benchmarks managers set to measure and track employee training progress.
Step #5: Develop training and development initiatives
Training and development initiatives are your tactics or the way you achieve your targets. If these action items are carried out correctly, it will mean your objectives were successful. Make sure all initiatives have a start and end date. That way come review time or in employee meetings, it’s easy to tell where the bottlenecks are located and easier to correct.