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Performance management

As per the above table, the three most common earned. Performance goals and progress must also
reasons for PM system failure are the lack of ability continuously be revised to ensure that the employee
of leadership to act as coaches and mentors and is still on track to reaching the overall goal.
initiate discussions that are procreative, the lack
of ability of leadership to differentiate performance 2. Train managers in becoming better
levels and provide constructive feedback, and the coaches
inability of management to review performance on a When managers are not good coaches, the PM
continuous basis. system is not trusted overall. Employees view the
Despite research conducted extensively pertaining PM system as fair when they are treated like human
to PM and PM systems, there is one extremely beings. This has led to the trend of managers
important factor that, despite its criticality, is a hidden taking on a coaching or mentoring role. Managers
force. Despite re-contemplating, restructuring, (or coaches) as mentioned before, have the role of
redesigning and re-implementing performance assisting in goal creation and continuous revision
systems, without addressing this single factor, your of these goals. The constant feedback leaves
performance system is destined for failure. employees feeling more confident and enabled.
What is the most important, hidden factor when it It is therefore important to build the confidence
comes to implementing a PM system? of managers so that they are able to fairly assess
The long awaited answer is a simple eight word letter performance as well as to boost it. Managers should
… fairness. be trained on delivering not-so-favourable news and
For a PM system to work, it needs to be perceived convert it to being productive towards the company
as fair by both managers and employees. There goals.
are three simple steps you can take to achieve
perceptions of fairness of the PM system, and 3. Focus on remuneration
managers play a key role: Remuneration and incentivisation may seem pretty
1 Managers should be trained in line with linking straight forward- reward the quality and output of
employee goals to the business objectives; work. For instance, the salesperson that makes the
2 Effective coaching; and most sales should be rewarded the most. However,
3 Focus on remuneration. it is trickier to conclude the right benchmarks or
to make a distinction between top, bottom and
Fairness is quite a subjective term. A PM system middle performers when employees are required
that is “fair”, relies on the perceptions of the to work in teams, when the roles of the employees
stakeholders involved. There are different types of are dependent on one another and it is difficult to
fairness and, in this context, procedural fairness deduce the efforts of each individual. Balanced-
is the topic of conversation. Procedural fairness measurement approach is therefore the solution.
refers to the perceived fairness in a process rather Commonly, when there is a vast amount of
than the outcome. In this case, perceived fairness performers in the middle-range, organisations tend
will be achieved when the PM system is well- to opt for eliminating performance rating systems. It
designed and functions in a manner that is fair. A is advised to rather keep performance ratings so that
study conducted by McKinsey research revealed
that 60% of employees, who rated the PM system employees can understand the measure by which
as fair, furthermore proclaimed that it was effective. their pay is derived from. This also leads to higher
levels of perceived fairness.
It is therefore important to focus on fairness when Pay parity is achieved when employees all earn
implementing or redesigning your performance a base salary that is aligned with the market rates.
system.
JEasy Paterson Points, for instance, is a system
How to boost perceptions of fairness that gathers data from all the various industries
and jobs in the markets and finds a benchmark for
with your PM system what the employee in a similar category should be
1. Link employee goals to the business paid. Aligning with these rates is what assists in the
objectives perceived fairness of remuneration of an employee
A PM management system that links employee on an external basis.
goals to company goals is one that is a success in On an internal basis, employees of the same
the making. Employees perceive fairness when a groupings (such as middle-performers) should be
reciprocal relationship exists. When personal goals remunerated similarly. Since it is not considered as
are acknowledged and respected, they can be contradicting the law to question a fellow colleague
shaped in a way to obtaining company goals. This about their salary, if two performers of the same level
way, employees feel valued and well-treated. By earn a different income, the system will be perceived
allowing employees the freedom of shaping their as unfair and will have little effect on employees as
own goals, employee engagement is likely to be well as decreased motivation.

28 JUNE 2018 · HR FUTURE