Best Practice In Developing A Performance Management Policy

In a challenging economic environment like ours, the only way to ensure the continued viability of companies is to focus on performance and reward it accordingly. What should be on the minds of executives is how they can effectively measure and manage performance at all levels within their organisations. However, there are two challenges that companies face in trying to manage performance: implementing the performance management system and maintaining the system. Apart from implementing a performance management system, it is important for companies to clearly define the performance goals and implementation methodology of the system. Without a clear policy, performance management risks is an abstract exercise that will most probably fail because employees will not know how to go about it.
A proper performance management system is aimed at assisting individual members of staff to improve their performance, identifying individual development and training needs, and assisting staff in the development of their careers and where appropriate identify opportunities for career progression.
The starting point in developing a performance management policy is explaining the features of the performance management system that you will use. For instance, if it is the Balanced Scorecard, you need to explain why the company believes that the Balanced Scorecard is the ideal performance management system for the company. Your policy must state how the company promotes and rewards a culture of performance. In addition, a proper performance management system should link performance measurement at the various levels in the company: corporate, divisional and section, individual level. Your policy should give an overview of how performance is linked in your company. In this way, the broad goals would be stepped down to the different levels, progress measured and results fed back to influence strategic thinking.
Your performance management policy should also be clear on the procedure in the implementation and administration of the system. For instance, your policy would state that the Executive team and senior managers set the company performance goals and heads of department translate the goals into divisional goals. On the whole, the procedure needs to be clear on how your company will end up with individual scorecards and performance contracts.
In addition to this, your policy should provide specific guidelines as to how managers and supervisors set performance goals and assess the same. A written Performance appraisal report on all employees should be completed within time frames detailed in the policy. At the conclusion of the rating period, the appraiser and employee should discuss the evaluation. In specific terms, the discussion should include an assessment of current performance, the rating criteria and goals for the next period. Guidelines for career counselling relative to advancement or specialisation and applicable training for the employee should also be included in the policy. Your policy should also explain that each supervisor who evaluates the performance of another employee is to be evaluated by their own supervisor regarding the quality of their evaluations. Upon review and endorsement by the employee, the appraiser and the appraiser’s superior, the completed performance evaluation forms should be retained and filed in the employee’s file maintained at the Human Resources Department.
A section within your performance management policy should define the performance rating. This should help employees understand what excellent or poor performance is and how the organisation deals with employees in the respective categories.
Managing the performance appraisal process is critical in ensuring the effectiveness of the performance management system. The policy should make it clear that all supervisors must complete timely and meaningful evaluations of their subordinates. In completing all Performance Assessment Reports, fairness and objectivity will be a prime consideration. When scorecards for the next period are developed, managers will need to review them thoroughly. The challenge is that managers, being busy, rush through performance appraisals without assessing the performance goals or measures. This causes problems. A well developed performance management policy should help both the appraised and appraisers to not only understand the performance management system but also effectively play their part in ensuring that the system gives you the results you want.
Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant - Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm. https://www.linkedin.com/in/memorynguwi/  Phone 481946-48/481950/2900276/2900966 or email: mnguwi@ipcconsultants.com or visit our website at www.ipcconsultants.com