- It is no secret that ICT has impacted almost every way an organization runs. From order placements to customer service, ICT has revolutionized the way we conduct our everyday activities, and Performance Management is no exception. However, it has become very clear that despite the introduction of ICT as part of an organization’s performance management solutions, we are still faced with various challenges that limit the effectiveness of how we manage performance.
- Let’s first agree on the criteria of an effective performance management solution
- enable an organization to not only
- meaningfully measure the performance of individuals, the business units and organization, but more importantly,
- help in the development and nurturing of talents.
- enable the organization to
- reward people fairly,
- enhance the future capabilities of the human capital and
- efficiently implement the annual performance exercise.
- able to drive A Sustainable High-Performance Culture.
- If your organization is about to embark on an ICT initiative with regards to performance management, this article will be significant in its selection and implementation. This article will attempt to identify the challenges and what steps to be taken to address them.
A. Adoption of technology in performance management today (Link)
B. Are we guilty of working in the same old way while using new tools? (Link)
C. Are people really well versed in developing Key Performance Indicator? (Link)
D. We need to adopt a New Paradigm (Link)
E. What needs to be addressed (Link)
F. Other challenges and what needs to be put in place (Link)
G. The benefits of using technology with learning science (Link)
H. Performance management has to be taken seriously at the highest level (Link)
About the Author (Link)
A. Adoption of technology in performance management today (Back to Contents)
- In today’s global business environment, an organization’s success is judged not only by how well its financial success is, but also how well it develops its human capital to support the business process and drive the intended strategic direction. Driving Human Capital Performance Management has to be the number One Strategic Priority and an Important Key Differentiator to achieve long term Sustainability.
- Yes, we must accept the fact that organizations today need to take a whole new approach in managing operating units as well as human capital performance in the current challenging business environment. Using technological methods is critical and the obvious thing to do – put in place a Technological-Driven Human Capital Performance Management Solution but, we need to recognize that it is not just about transforming a paper based into digital based. By doing so and based purely on technological aspects or the need to upgrade the system, it is just basically changing from one inefficient platform into another equally inefficient platform where the only benefits are simply easier administration, for both the user and the administrator.
- In the old platform, one just writes onto maybe a piece of paper. In the new platform, one just keys-in into the computer or a mobile device. As far as required information, it is probably the same information as before.
- So, by just adopting new ICT platform, be it enterprise or cloud, just based on upgrading requirements, it may not help improve performance significantly. At worst, it might even kill the initiative. The perception of having a “Simple” system might be the worst direction to take. It is important to note that the System is simply an enabler.
- The other major issue is that most Employee Databases need a major clean-up before an organization can effectively implement an ICT driven performance management solution.
- In fact, the main problem of most implementations come from the failure to clean-up the employee databases so much so that administration becomes very tedious and time consuming.
B. Are we guilty of working in the same old way while using new tools? (Back to Contents)
- Based on the discussions above, the conventional approach in today’s environment will definitely fail regardless of whether it is done on a digitalized platform. This is why there are few success stories on performance management implementation despite the fact that many organizations have embarked on a digital platform. This is because it is still done the old way but using a new tool.
- To make matters worse, some justify the failure on the basis that performance management practices are outdated. Some organizations even drop the Performance Indicator approach and fail to measure actual performance.
C. Are people really well versed in developing Key Performance Indicator? (Back to Contents)
- Unfortunately, management has the tendency to expect or assume everyone knows about setting Performance Indicators. Knowing their job does not equate to knowing how to measure performance. This is an unrealistic expectation given the fact that today, most working environments are structured to be very operational in nature. The truth is that most people do not possess enough knowledge to make it work. We need to recognize that it is not possible to expect everyone to immediately understand how to set meaningful and quantifiable performance indicators.
- Firstly, it is important to recognize that it is not an activity carried out regularly enough for people to master it very quickly.
- Secondly, it requires one to spend a fair amount of time to think over it. With the pressing demand of getting things done quickly on a daily basis, not everyone has the luxury of time to do it. Besides, a ‘thinking’ activity in itself is unfortunately, not something the majority of people would like to do as they find it cumbersome and difficult. This is also added on to the fact that many are not trained to engage in thinking activities.
- We must recognize and agree on the fact that Performance management is no longer used just for operational requirements on today contact. It is now a Strategic Tool at the management’s disposal. It is a Power Change Management Agent when used appropriately.
- To understand what needs to be done in the area of performance management, the management must first of all, shift to the whole thinking paradigm. Management must recognize that performance management is no longer just purely about measuring an operational outcome, governed by operational requirements.
- It is now a strategic tool at the management’s disposal, and it must be recognized that Performance Management can be a powerful Change Management Agent if only it is used appropriately. This will allow the organization to have the ability to dictate, drive and change the way the organization and its human capital operates and performs based on current and future requirements. This will help to “force” the organization and its human capital balance its operations and development fundamentals. It can no longer be viewed as just an operational process.
- At the initiative stage of the implementation, the organization needs to clean-up the employee data at the human resource section.
- Establish a Performance Distribution Framework. To establish Job Level, Job Category and Job Grade.
- The Organization and operating units are required to establish not more than 5 Key Performance Indicators to assess annual performance. The 5 KPIs must be a mixture of financial and non-financial based.
- Establish Pre-Set KPI Templates by specific Job Position with a predetermined set of Objective Statements and supporting Measures based on Key Focus Areas.This is necessary as training everyone on the knowledge of developing KPI is way too time consuming and is a waste of resources in today’s environment.
- Use Standardized Target Setting Method. Have a clearly defined approach of setting targets and target range of a specific measure. Measures are not homogenous.
- Job Positions with Profiling and Proficiency of Competencies. We need to build quality in an organization.
- These are the critical steps to take for organization to put in place a Sustainable Performance Culture.
F. Other challenges and what needs to be put in place (Back to Contents)
- At the same time, we must recognize the various practical challenges in the execution and implementation of performance management exercises taking into account the fundamentals of human behavior. Telling people the management’s expectations and what needs to be done is very different from the ability to consciously do it.
- How then can an organization be able to get majority to follow accordingly and mostly importantly, change people behavior to do the “right” thing? You can tell and explain the reasons and unfortunately most of the time, changes still do not materialize.
- Number one, as mentioned earlier, it is not possible to expect everyone to clearly know what their performance parameters are during the early stage of the implementation.
- Number two, how to ensure that they will do it like example engagement exercise or complete the exercise with quality. The use of learning science methodology incorporating technology becomes an important and significant step to take.
- Through this approach
- The appraisal form for each Job Position needs to be embedded with:
- A Pre-set of Objective Statements with given measures for selection
- Sampling of targets and target range of a specific measure
- Smart library of objective statements and measure through the use of Key Focus Areas
- Pre-set the profiling and proficiency of compitencies
- Click and Select functions for complex tasks. Make complex tasks simple to execute.
- Mobility; Can be easily accessed through laptops and mobile devices.
- Enable and “force” the appraisee and appraiser to engage.
- Allow each user to learn along the way and acquire the knowledge according to their learning capability without affecting the quality of the exercise.
Allow the user to improve their knowledge over a period of time until they become competent.
- This will be the next important step to take for an organization to achieve Sustainable Performance Culture.
G. The benefits of using technology with learning science (Back to Contents)
- The benefit are quite significant for an organization embarking on this new approach. This would include:
- High Return of Investment (ROI).
- Faster and Effective Performance Management Process.
- Implementation Period is reduced significantly for each exercise. The pre-setting method allows the user to concentrate on the selection of
performance metrics, evenif he or she is new.
- Flexibility to add and customize additional information is now available to HR in accordance to business environment and strategic requirements.
- The ability to reward people fairly based on actual performance and standardized criteria for the whole organization.
- Improved Quality of submissions.
- Ability to effectively analyze the overall performance results.
- The organization is now able to conduct more effective business analysis.
- The user is now able to execute the various performance exercises through User Self Learning Modules made available to them.
- Comprehensive Reference libraries of Objective Statements organized into simple clusters, Measure and Competency by profiling and proficiency model.
- Improve the overall knowledge of the human capital in the area of performance management.
- Achieve high levels of Human Capital Motivation
- Most importantly, put in place a Sustainable Performance Culture.
H. Performance management has to be taken seriously at the highest level (Back to Contents)
- Managing operating units and human capital performance is a very serious matter and it must be taken seriously by the management. It is not simply about filling up forms or attempting to ease that process. It requires attention, effort, time and with the absence shortcuts. It is for management to use the process to guide and shape the organization and its people to predetermine outcomes be it operational or strategic. It is a powerful tool at the disposal of the management and failing to use it correctly, can create issues and problems in the future.
- Success today is no guarantee of future successes. The sad part is that very often, management views performance management as purely operational and such, do not put enough emphasis on it. It is used annually for things like reward distribution and promotion exercises. It is more than that; it is strategic and a change management process. Combining it with today’s technology and learning science methodology, it is a power transformation mechanism that can enable an organization to quickly develop a sustainable performance culture, which is a huge competitive advantage in today’s ever changing landscape.
Anthony EL Tan is the Senior Lead Consultant specializing in the field of Performance Management for Top Foresight.
A certified Strategic Management and Balanced Scorecard Professional from Balanced Scorecard Institute and George Washington University and with more than 23 years of practical consulting experience working with organizations of different industries in the area of Organization Strategic Implementation, it has provided him with an in-depth knowledge and understanding of the real performance management problems and issues associated with managing today’s organization in a challenging business environment.
He is Highly Experienced and a Competent Facilitator with Great Analytical Skills. One of a few consultants who has real practical experience in full implementation of Performance Management Solution.
Top Foresight is a leading Performance Management Consulting Firm in Malaysia providing performance management solution incorporating Cloud Based Performance Management System.
You can reach Anthony EL Tan at: [email protected]