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One of the fundamental truths of total quality management is that what cannot be measured cannot be improved. The same is true for performance management.
All companies measure the performance of their employees in some fashion, mostly by a best guess on the part of managers at specific points in the business year. These efforts at performance management are subjective and usually not conducive to improved productivity.
An interesting study would be to measure the percentage of employees in the market with a comprehensive job description, as well as the number of companies that make use of balanced score cards to measure and manage their performance. The reality is, without these two measures, the performance of neither company nor employee can be accurately measured.
The ideal performance management system is not one where the line manager quickly scores an employee once a year when it is time for bonuses or increases. Such performance measurement is often based on perception or personal compatibility and do not accurately reflect the real situation in the business.
Taking the guesswork out of your appraisal
A full performance management system must consist of various components:
- A company balanced scorecard
- Job descriptions
- Bi-annual self-appraisals and
- A measurement matrix (arguably, the most important of all)
The measurement matrix measures two different components of performance:
- The employee’s contribution towards the achievement of the company’s balanced scorecard requirements.
- The performance according to key performance indicators in each individual’s job description.
The matrix should be updated on an ongoing basis and the measurements should be numerical, i.e. scored out of a maximum of five or seven. The current trend is to score it out of seven to avoid the typical scorer’s error, such as staying in the middle to be safe.
Each score on the measurement matrix under four out of seven should be discussed with the employee. These areas indicate a need for further training and development. In this way, the measurement matrix also becomes a training needs analysis tool.
It is only once each employee is measured in such an unbiased and scientific manner that the standardisation of service can be achieved.
Other issues that should be brought into the measurement matrix are whether the employee has had any disciplinary issues, as well as complaints or compliments. In this manner, the line manager and directors will have a bird’s eye view on the performance, training needs and the standing of each employee in the organisation.
Other benefits of the system
Once a full performance management system is in place, it will also be a useful tool in the avoidance or quick resolution of any LRA disputes. With ongoing measurement, a paper trail is automatically generated showing areas of concern regarding each employee.
A performance management system will provide a numerical score for each employee, which will be converted to a percentage. An increase in percentage can be used as a target for performance improvement in individuals or teams. Together, the entire team can work towards the achievement of the key indicators on the company’s balanced score card.
When taken seriously and applied effectively, the performance measurement system will be the corporation’s biggest asset in its drive towards continuous improvement, fair increases and bonuses, and employee satisfaction. It will take subjective emotion out of appraisals as well the opportunity to conduct witch-hunts and build personal empires.
The content in this article was provided byTrinitas Consulting.
Trinitas aims to assist clients to improve profitability by increasing income through effective marketing and communications while decreasing costs through sound operational re-engineering. For more information, contact Frances Wright by e-mailing email@example.com