Implementing Performance Management Successfully

Research like the Performance Management Solution Provider study (Bersin, Deloitte Consulting LLP 2019) argues that most people despise performance management. But is this really the case? Successful performance management initiatives consider three key questions: why, what, and how.

When top management in any organization decides to implement any form of performance management, they must ask themselves why they need performance management. There can be many reasons, but the important factor is that the outcome of the performance management process must add value to the organization, include only relevant employees, and have the ability to be measured.

Performance management is a way of capturing the information needed to measure the “what.” What is it that the organization needs to register in order to fulfill the “why”? Is it measurable production targets, the manager’s personal view of an employee’s performance in relation to company values, or something else?

When why and what are established, the decision-makers must find the best way to create a process (how) that supports why the initiative was created.

It is this process, the “how,” that is the key of performance management.

Previous analysis, from many sources, explains why employees (remember that performance management includes all levels of employees) find performance management a waste of time and just another bureaucratic action that interferes with daily activities. These analyses are all based on questionnaires like the one used in the Performance Management Solution Provider study (Bersin, Deloitte Consulting LLP 2019).

In my opinion, the reason why employees may not be engaged with performance management programs is lack of communication and ownership!

Top management has to communicate the “why” to the entire organization. There must be a common understanding of the need for performance management, and this understanding must be refreshed on a regular basis.

Managers on all levels must take ownership of the process, be ambassadors for the organization, and transfer the “how” to their direct reports. Without manager acceptance of the process and ownership of the purpose, any type of performance management will fail.

The organization must be ready to invest in developing managers to be – managers. Part of their job is to manage people, and they must have the tools to be able to pass on the “why” of performance management in order to make it worthwhile and make sense to all employees included in the process.

About the Authors

Lars Ole Dencker
Lars is a highly experienced consultant with 20+ years of experience with SAP HCM and SuccessFactors. For the last 6 years, Lars has focused on implementing SuccessFactors Performance & Goals, as well as Succession, and has been involved in more than 20 customer implementation projects. Lars currently holds an SAP professional certification in Perform & Align.

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