Performance Management Tool – A Catalyst for Organizational Culture


Employees are the key engines of organizational performance. The world today is different! Competitive, disruptive and innovative is the new momentum! Successful organizations are diligently working towards re-inventing the wheel to generate higher efficiency, execute better on business strategy, and do more with less to remain competitive. India now stands at the point of inflection that is transforming the way work is conducted and changed the way performance is driven and measured. A key driver of this transformation is adopting “an organizational approach” to performance management. Aligning the individual to the larger entity and a greater purpose! Creating new performance indicators, measuring employees on relevant metrics and motivating critical talent may be a vital enabler for corporate success. Performance management is a key tool to enhance accountability and build a high-performance culture.

In a fast-changing time, there’s been a sharp upturn in successful organizations making their performance management systems more aligned to their company’s culture, vision and long-term growth aims. Successful organizations realize that they are driven by people, their capabilities and therefore their performance management system (PMS) must ‘engage efficiently’ with its people, become more effective, rightly conceived and rightly implemented.

PMS is the nervous system of any organization. It’s because the “Fairness Quotient” that PMS builds up in an organization, is the real reflection of how it engages with its employees and shows results through overall organizational performance.

A Closer Look at the Importance of Performance Management
A healthy PMS attracts people from the outside world as the organization is perceived as an ‘Employer of Choice’. Talent acquisition becomes easier when your fairness system is regarded as an ‘an industry benchmark’ and begins to command respect and a higher aspirational level, from potential employees.

The primary reason to ensure appropriate functioning of performance management process, is to tighten the link between strategic business objectives and day-to-day actions. In effect, it also ensures that all other verticals are aligned in such a manner that promotes ‘fair practice performance management’. Effective goal setting (including timelines), combined with a method to track progress and identify challenges, contributes to success and bottom line results. This spurs the ‘capability program’ to reward employees for exceptional effort, contributing to job satisfaction and productivity.

Given this background in any given organization performance management is generally most underrated, while it should be the foremost fair and efficient system.

So what does it take to make performance management work? Research identified three factors that are prerequisites for success. These elements help ensure that performance management facilitates strategy execution.

Mindset Performance: I believe that mindset-performance management is a tool to drive results. Both managers and employees should understand the performance management system’s purpose, including how it supports broader organizational goals. It is critical that managers understand how it supports strategy execution and why it warrants their attention. This means, strong support by executives at all levels and a top-driven approach.

Competence: Managers are competent at performance coaching, goal setting, development planning, and appraisal. Manager skill in these areas is essential for success, and technology is not a substitute.

Clear visibility, regular individual analysis, and company-wide employee appraisals help identify corporate competencies and skill gaps. The time spent with performing resources in regular periodicity is essential for the momentum to continue.

Reinforcement: Managers meet periodically with direct reports to formally review progress. This is a defining characteristic of the best performance management systems, because it ensures that performance coaching, feedback, and monitoring of goals regularly take place. However, a key aspect is to keep ‘reinforcement’ insulated from ‘pay’ discussions. Reinforcement is about feedback both on personal and professional areas, constructing the future, discussions about growth and learning. When the discussion is combined with pay, individuals tend to assimilate only the understanding of the pay decision.

If these aspects are integrated into the company’s performance management system, then it begins to operate like a strategic tool that will drive results. Today’s performance management solutions need to be viewed as a complete suite of talent/ competency alignment and measurement tools going beyond just performance reviews and appraisals. They help employees understand how they can do what they are good at, and even excel further if they are linked to learning resources and utilize these for overall organizational objectives. Technology is a valuable enabler and therefore must be put to use for the overall effectiveness of PMS system. When performance is tracked through structured matrices across roles, the delivery of results is as sharp and its seriousness sets in, this then this tends to cascade through the organization.

In conclusion, the primary objective of performance management is to align every employee’s productivity to the organization’s goals and growth objectives. The HR function in PMS comes to center stage only when they don’t just run it as an owner of the process but the owner of the practice and build it knowing well the context of markets, competition, a deeper understanding of business. HR must have relevant knowledge, practices, tools, and frameworks which are contextually right to be aligned to the organization’s strategic growth. This can be possible if the HR function is deployed as a ‘practice’ with a deeper process and mission-oriented outlook. In current times, employees are looking at a different level of engagement with their employers framed around opportunity, development, and coaching and they may be less interested in measurement. The newer generation or millennials, in particular, have different expectations and priorities from workplace engagement, therefore an updated, flexible, wholesome and yet integrated performance management processes is the need of the hour to make sure there is a sufficiently strong alignment of employees with their skill sets, roles and overall organizational vision and growth.

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