The Five Building Blocks of Performance Management

The Five Building Blocks of Performance Management

performance-managementThe Lesson:  Need help getting started with your performance management program?  Start with these five basic building blocks listed in order: (1) Clearly Defined Goals (2) Accountability and Visibility (3) A Culture of Coaching and Feedback (4) Training and Development (5) Defined Rewards and Compensation Strategy

The Story:  This week we’ve had an increase in tantrums and bad behavior in our house, and it’s NOT the dog.   It could be due to the buckets of candy lurking in every corner or maybe mercury is in retrograde again.  Either way, I need help with the kids and sticker charts worked the last time, so I am bringing them back.  For a while there, all was good in the Roberts household and then I stopped the stickers…. BIG mistake.  The unraveling didn’t happen overnight but rather was a slow and steady storm that accumulated over several weeks.  So, here I am with my poster board, markers, and stickers creating new charts.  Coincidently, I’m also in the process of designing a performance management program for a client.  The irony is not lost on me  – sticker charts and performance management… one and the same?  It got me thinking that now was the perfect time for a blog dedicated to performance management.

There have been tons of articles over the past year on how big companies are re-thinking their performance review process.  I’m a big supporter of what these companies are doing BUT there are still a lot of companies who haven’t mastered what I call the BASICS of performance management.  Without these, your review process, whether it be formal or informal, annually or monthly, will fall short.  You have to get these basics down first.  SO, if your company is new to performance management and you are not sure where to start, this blog is for you.  If you have been doing performance management for a while, but you are not getting the results you expect, this blog may provide some insights as to what is broken.

Performance Management vs. Performance Development.  Before I begin, let me put it out there that I prefer the term “Performance Management & Development” over plain old “Performance Management”.  “Performance Management” on its own implies a look backward  where we reflect only on how an employee did their job over a period of time.  Whereas, “Performance Management & Development” implies a look backward with the intent of building awareness and understanding so that we can look forward and plan how to grow, change, and evolve.   I like the idea of creating a program that manages performance AND inspires and charts the path for higher levels of performance.  So, before you decide to implement a performance management program, think about what you really want it to do for your organization and employees.  For me, it’s not only about determining compensation and promotion decisions based on what we observed in the past, it’s also about elevating performance for better results in the future.

Below are my five basic building blocks.  They are listed in order.   Make sure you have the step down before you pass GO and move to the next step.

  1. GOALS – You need to have clearly defined and measurable goals for the organization and every person in it.  Some companies call them OKRs, SMART goals, KPIs, Rocks, etc.  It doesn’t matter WHAT you call them, you just need to have them.  Goals ensure that everyone is rowing in the SAME direction towards the SAME destination.  You start with company goals and then translate these into department goals and then individual employee goals.  Goals provide employees with purpose, motivation, and clarity of priorities.  For the organization, goals provide direction as well as an objective and easy way to measure success and progress.  They also provide insight into what your talent needs to be successful.  Company goals are achieved through the collective efforts of their talent. No goal is achieved by one person alone.  Talent is an organization’s #1 resource so make sure they are prepared.  Do employees need training?  Do they need to demonstrate new behaviors?  Do they need new systems and processes to get the work done?  Is additional staff needed?  Imagine a company that decides to increase revenue by diversifying their service line.  No one in their company has experience providing the new service, yet the company fails to train their employees on the new service and they don’t hire anyone with the new service experience.   Do you think this company will be prepared when the time comes to offer this new service to the client?  Most likely not.   Take time to figure out company goals and what it means to your talent.  Not sure where to start?  There are tons of resources on how to set goals.  I like this KPI guide by
  2. Visibility and Accountability.  Remember my sticker chart?  I stopped using it because I removed it from my line of sight.  I hid it in the pantry so it wouldn’t clutter my kitchen counter and then eventually forgot about it.  Weeks later, everyone was off track and doing things they shouldn’t be.  Out of sight, out of mind.  Same thing will happen to your goals if you don’t keep them front and center.  Whether they are on your internal company website’s homepage or posted on the whiteboard in your company kitchen, make them visible to everyone.  Keep department goals somewhere visible in your team’s workspace or dedicated meeting room.  Employees can keep theirs next to their workstations.  Make them visible so everyone can easily hold each other accountable.  How do you build accountability?  Incorporate the goals into the appropriate meetings.  For company and department goals, review them in your leadership meetings where each department lead is present.  For individual goals, managers should incorporate them into their one on ones or small team meetings.  Find the right cadence throughout the year to report out to the entire organization on the progress of company goals and any changes to strategic direction to ensure everyone is on the same page and understands where the company is going and what is needed to get there.  Without visibility and accountability, your goals will fall to the backburner.
  3. Create a Culture of Feedback and Coaching.  In a perfect world, employees would be able to achieve their goals without any direction from others.  They would have the right skills, knowledge, resources and motivations to get the work done.  We don’t live in a perfect world.  Our world is always changing and evolving and so are we.  Sometimes, we need help.  That is where coaching and feedback come in.  Your organization needs to become the type of organization that incorporates feedback and coaching into their DAILY activities, not once or twice a year.   Wait a year to influence performance and you will miss your goals.  To create this type of culture two things need to happen (1) everyone needs to be clear on their ROLES for giving and receiving coaching and feedback and (2) everyone needs to know HOW to do it.  The former relies on setting and reinforcing expectations and holding others accountable.  The latter involves training your employees on how to do it right.  Without training, even a well-designed performance review could go south and not only be ineffective where it doesn’t improve performance but also be damaging to your employees.    And speaking of training…
  4. Training and Development.   Organizations need to give their employees the tools and resources that they need to be successful and achieve their goals.  In order to do this, the organization needs to know what their people need (Building Block #1).  That is why you shouldn’t skip steps.  Think about it, an organization tells their employees that they need to do something new or create something new in order to achieve company goals and that they are going to be measured on it, but they don’t give them the resources they need to do it.  What’s the impact on the employees?  Stress, lower productivity, anger, and disengagement.  Before you know it, your high performers will be searching job sites at lunch time because they are not making progress.  Don’t let this happen.  In a future blog, I will share some tips and tricks for getting started with training even when you are short on staff, time and money.
  5. Defined Compensation and Rewards Strategy.  Not clear on your compensation and rewards strategy and how it aligns with performance?  Get clear.  Although compensation isn’t everything to an employee, it’s in their top five of things that matter.  Employees need to understand how their performance influences their pay.   Is it based on individual, team, department or company performance?  Perhaps it’s one, some or a combination of all of them.  What about promotions?  Is performance the only deciding factor for promotion or is it also opportunity based?  How are employees evaluated for promotion?  No matter what your policy, be sure to have it clearly defined and understood by your employees and apply it consistently.

Before your organization heads down the path of performance management, consider the five building blocks above to ensure your program is successful and effective in managing AND developing high performance across the organization.   To rush ahead and invest in a tool or process without these five things in place could have a huge negative impact on results and your people.  Not sure where to get started or want to learn more?  Email me at