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Performance Management

An introductory guide

Performance Management is a cyclical process aimed at improving performance (eg: achievement of business objectives). Performance Management involves the following principles (illustrated by a call centre example):

Measurement
- You establish performance measures
  (eg: sales turnover)
- You establish measurable behavioural goals that will improve performance
  (eg: making 30 prospective phone calls a day)
- You measure current behaviours
  (eg: logging actual phone calls)
Appraisal
- You compare the current behaviours with the behavioural goals and identify the main differences
  (eg: on average, 20 phone calls are actually being made, giving a shortfall of 10 phone calls).
Action
- For each difference, you plan how to bring actual behaviours in line with the goals, in order to improve the performance
  (eg: introduce a revised telephone script that qualifies the prospect more quickly, shortening each phone call and enabling more calls to be made in the time available)
- You implement the plan
  (eg: issue the revised script to all telesales people, perhaps with some training to support its use)
Monitoring
- Check that the new plans are being followed (eg: review a sample of phone call recordings to determine whether the new script is being used and check that it is 'workable').
- At an appropriate time, you return to the appraisal stage to assess the impact of the changes on the behavioural and performance measures
  (eg: review the average number of calls made per day and sales achieved).

The term "Performance Management" is often used in two contexts:

A way of maximising performance of an individual, team or organisation
A process for dealing with underperforming individuals (or teams).

Whilst the underlying principles are always the same, the way in which they are implemented varies between the two contexts.

Maximising performance	Poor performers
Usually collaborative between management and staff	Involves more confrontation
Can be informal, with written records only recording revised targets	Is a formal process with each step being written down
Is a cyclical process, one of constant improvement	Is a process that escalates into disciplinary proceedings, possibly concluding with termination of employment
Often involves analysis of the process	Often involves analysis of one individual's behaviours/attitudes

Conclusion

Performance Management is a term used to improve team performance, based on the principles of measurement, appraisal, action and monitoring. However, it can be manifest in very different forms depending on whether the aim is to further improve good performers, or deal with underperformance. Performance Management can also apply to individuals, teams, groups or organisations.

We have an article on performance management for teams, which is aimed at helping good teams improve their performance even further.