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Principles of Performance Management

B. Madar asked:

Principles of Performance Management

M. Sreenivas

B. Madar

Abstract:

Performance management is the systematic process of monitoring the results of activities and collecting and analyzing performance information to track progress toward planning results. Performance management uses performance information to inform and program decision-making and resource allocation. The main objective is to communicate results achieved, or not attained, to advance organizational learning. The paper looks at the principles that are helpful in the design and implementation of effective performance management systems.

Introduction

The origins of Human Performance Systems Analysis can be traced from the late 1950’s and early 1960’s. These were times of activism and social reform in the United States. The field, initially called behavior technology, was a product of that spirit. In the early 1960’s a number of behavioral scientists and their graduate students made the decision to take what they had learned in their learning laboratories and apply those lessons to real world issues of learning and performance.

Business, markets and society have changed. But by and large, the principles of management, the methods and concepts of leadership and performance management have not. Rigid sales quotas, fixed performance targets, “pay for performance” and micro-management from the top are still widely established standards.

There is no lack of criticism of these traditional methods – both in practice and in the business literature. One thing is clear: we need a new understanding of motivation, performance, and responsibility.

The problems companies face today can’t be solved using the thinking and the processes that created them in the first place. A more productive approach is to define what the ‘right’ things are, and thus to examine root of the problem, rather than just treat the symptoms. To take this road, we need to put into question and possibly overcome an entire set of existing convictions.

Most of us work in organizations within the traditional model of command and control. This system may be budget control, target negotiation and subsequent top-down setting, employee evaluations, organizational diagrams, guidelines and policies, central departments, or employee questionnaires. These have been used for decades.

It is, therefore, often difficult to appreciate the amount of talent, time, and money that is wasted through these tools. Mutual trust, employee involvement, intrinsic motivation, and voluntary willingness to perform are being eroded. To question the traditions and to look for alternatives means pioneering work with a model beyond command and control.

Key Principles

1. Do a Performance Improvement Analysis

· First, measure the frequency of behavior (what the individual says or the physical movements made) and the outputs (the physical evidence of completed work produced by those behaviors) prior to any management change. This analysis can be done for just one behavior and output or for many by job category, department and organization. Through this analysis, one measures present performance, establishes standards, specifies why behavior is deficient, calculates the net economic value of improvement after the cost of solutions, and places them in priority order. The result of this analysis is identification of potentially high-payoff behaviors and outputs that can be improved – an important first step, because, surprisingly, key behaviors and outputs are often overlooked or undervalued in organizations.

· Then, introduce the procedures used in Performance Management and quantify the amount of change that occurs in specific time periods. Because the investment in changing behavior is often very low and the economic payoffs may be high, the potential high return on investment usually excites top management

2. Be Specific

· Describe and communicate desired performances and the standards for judging them in terms that are measurable, observable and objective. A description of the events that are signals prompting the response should be included. In training, coaching, measuring performance, feeding back performance data, conducting a performance appraisal, writing procedures, and delivering positive reinforcement, it is essential to be specific. Alas, if the language used is vague, the desired behavior may not occur.

3. Measure

· For any performance shown by the analysis to have sufficient economic value to an organization, measure the frequency of the performance against the desired standards. While most organizations measure some performance, there are, unfortunately, many key outputs and behaviors that are not measured.

4. Give Feedback

· Provide feedback on performance to the individual involved and to the individual’s manager, supervisor, or group leader, rapidly-preferably immediately-with sufficient information to allow for self-correction. Too often, feedback systems for many key behaviors and outputs are either absent or flawed.

5. Deliver Positive Consequences

· Deliver to each individual positive consequences immediately after completion of the performance of the desired behaviors and outputs. The frequency of an individual’s behavior is affected by the consequences that follow it. If the consequences are positive to that individual, the behavior tends to increase; if they are negative, the behavior tends to decrease. Consequences should be delivered for as long as the performance is desired, or until naturally occurring consequences are strong enough to support the behavior. How frequently you provide positive consequences is determined by how often the behavior occurs, the phase of behavior change you are in (causing the first new behavior to occur, changing its frequency, or maintaining it) and the pattern of responses you desire (steady, maximum output, peak for certain periods, etc.

· Unfortunately, in many organizations the wrong consequence system is in place. Consequences of desired behavior are often negative or neutral. Undesired behavior may be rewarded. The reinforcers are badly delayed. They are delivered only on a group basis (annual company-wide profit sharing). The rewards are short-lived for behavior that is desired long-term. And almost always the positive reinforcement is too infrequent.

Reference

Brethower, D. (1972) Behavior Analysis in Business and Industry: A Total Performance System. Kalamazoo, MI: Behaviordelia Press

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