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If your organization could increase productivity, decrease turnover, improve service and enhance employee satisfaction, would you buy into a new strategy? A number of Canadian companies have recently seen significant results through pay plans which incorporate performance management. This raises two questions. Why should performance management work now? And why have more organizations not adopted it?
A relatively new movement Performance management focuses on employee goal setting, performance appraisal, development, coaching and rewards. It links these components and focuses them on the core goals of the employer. It has also come to include 'competencies' - the skills , knowledge, attitudes and behaviours which describe how superior employees achieve the desired results. It is not enough for an employee to "make the numbers" if the method does not support the long-term prospects of the enterprise. Very often, performance management is reinforced with a link to incentive pay, with an 'at risk' component tied to achievement of individual and organizational goals. Appraisal and development are ongoing, not a once-a-year exercise.
Performance management represents a shift from traditional human resources as a discipline unto itself to greater integration with the business and operational objectives of the organization as a whole. HR practice is tied tightly into the cycles of business planning of the enterprise as well as the dayto-day operational priorities of line management.
Why now?
The recent focus on performance management confirms the validity of what may have been an annual report cliche: "Employees are our most valuable resource." Achieving the best results from human capital is not optional. Waves of downsizing and delayering mean that there are fewer managers, and mid-rank workers are now much more accountable for their own decisions and managing relations with internal...