Inclusive and planned approach to performance management = Engaged employees

Performance Management is a topic of focus at this time of year for many organisations as they close out the year and look forward to aligning their strategic plans with performance goals for 2013.    Many will start to develop and deploy key performance indicator’s (KPI’s) through their organisations and will believe that performance management is working towards having engaged employees who understand the company’s direction and what they need to do as individuals to achieve them.  However, this identifies a large gap of understanding within organisations and line managers who are defining performance management as the process of setting KPI’s and conducting performance reviews.

Performance management though is so much more than setting key performance indicators and conducting performance reviews (Millmore, Lewis, Saunders, Thornhill and Morrow 2007).  Defining performance management and its success is an ability to improve the performance of employees through developing teams and individuals, through an inclusive and planned approach. 

Human resource departments will be developing practices & tools for leaders to deploy to the business.  How these practises & tools are deployed by line managers is the most important factor in employee engagement and satisfaction within the company, even more so than the creation and design of HR practices by human resource management (Purcell & Hutchinson 2007).   The way HR practices are implemented by line managers determines the satisfaction of employees to understand the practices and take them on board.  Therefore, line managers have a crucial role in communicating the organisations direction, values and desired behaviours to employees (Purcell & Hutchinson 2007). 

Active engagement by line managers in the performance management process is required to ensure success.  Employees today are expecting more from their employers than just a job.  They are seeking a career and they want to understand what you as an employer will do to listen to their goals, help them build skills through different work experiences and allow them some freedom to discover and create choices.

 So what are some enablers to successful Performance Management?

1.      Engaging employees in the strategic direction through a team planning workshop with outcomes of how the team will work together to achieve results, as well how innovation initiatives can work towards the strategic direction i.e. look at what we do and how we do it, allowing the team some freedom to discover and create choices.

2.      Ask employees to draft individual goals and development plans and work with them on how they can best achieve these towards the company goals as well as meeting their individual needs.

3.      Regular and open dialogue around performance is required.  Performance Management is not a yearly one sided discussion about the employees’ performance. 

4.      Help employees build skills through different work experiences and allow them some freedom to discover and create choices that are aligned to the company strategic direction.

Ensuring the effectiveness of line manager’s role in the implementation of HR strategies requires all key stakeholders to clearly understand their role.   For line managers to succeed in their objectives, they need to understand the expectations upon them (Rappe & Zwick  2006).  Line managers need to understand that when there is no role clarity; job satisfaction suffers and can lead to intrapersonal tensions between HR, line managers and employees.   In order for HR activities to be embedded into the line manager responsibilities, a partnership ‘triad’ approach needs to exist between employees, line managers and HR, ensuring that there is a shared understanding of the different roles and responsibilities (Maxwell and Watson 2006).

What’s your company doing around performance management?  How will you keep your employees engaged in 2013?

Maxwell G.A and Watson S, 2006, ‘Perspectives on line managers in human resource management: Hilton International’s UK hotels’.  International Journal of Human Resource Management 17:6 June 2006 http//www.tandf.co.uk/journals

Millmore M, Lewis P, Saunders M, Thornhill A and Morrow T 2007,’Strategic Human Resource Management Contemporary Issues’ Pearson Education Limited

Purcell, J. & Hutchinson, S. (2007), ‘Front-line managers as agents in the HRM-peformance causal chain: theory, analysis and evidence’  Human Resource Management Journal, 17 (1), 3-20

Rappe C & Zwick T 2006, ‘Developing leadership competence of production unit managers’ Journal of Management Development, Vol. 26 No. 4, pp. 312-330 Emerald Group Publishing Limited

The WIFI of employee engagement

Businesses today need to ensure they have talented employees who will achieve results aligned to business strategic objectives as one of the factors most critical to success.    It’s not as simple as just having talent in your organisation; employees need to deliver results against the organisations vision.   So attracting the right talent (capability, skill, and knowledge) is one component of success, retaining that talent to deliver is a different objective altogether.

There have been a number of case studies which show that companies have achieved successful embedded employee engagement resulting in increased sales growth, net income growth, increased employee morale & higher retention percentages (Baumruk 2006).   These successes where achieved through initiatives of active listening to employees, developing and implementing good HRM practices and trustworthy leadership.

There is no doubt that successful engagement is essential for attracting and retaining talent.  If engagement isn’t present or is poorly managed, turnover will increase and talent will not be drawn to the company, therefore affecting the company’s bottom line performance (Doherty 2010).

So what is that magic formula to ensure employees are engaged?  Fundamentally, employees are seeking for their leadership & human resource departments to listen to their wants, needs, desires and goals (Guild 2007).  Organisations need to run focus groups with their employees and leaders, to re-engage with them and build effective strategies, and of course leaders and HR need to respond with action.

The Well-being, Information, Fairness and Involvement model – WIFI  (Cook 2008) are four stages to ensure employee engagement in your organisation to drive attraction and retention of talent.  The WIFI model was adapted by Microsoft who witnessed successes of attrition rates as low as 6 per cent.   The components of the WIFI model are:

·        Well Being – focuses on how employees feel about the organisation in areas such as employer branding, work life balance, job design and structures

·        Information – is about having a clearly defined and communicated vision for where the organisation is heading and ensuring there are clearly defined organisational goals and objectives.

·        Fairness – ensuring hiring right people for right jobs.  Fairness in how managers rate individual performance and issue reward and recognition.

·        Involvement - is recognition that communication occurs two ways.  It’s about actively involving employees in discussion and decision making processes.

      For companies to attract and retain talent within their organisations, employee engagement needs to be successfully embedded within the company.  Employees need to feel respected and heard.  They need to be able to observe transparency across all levels of the organisation and they need to see human resource management practices that support them as employees in reaching their objectives and career goals (Doherty 2010).  For employee engagement to be successful, executive leadership needs to actively sponsor, listen, communicate and deliver and the WIFI model is one way to encourage success.

Baumruk, R 2006, ‘Why managers are crucial to increasing engagement: Identifying steps managers can take to engage their workforce’, Strategic HR Review; Volume 5; Issue 2; 2006

Cook, S 2008, ‘The Essential Guide to Employee Engagement: Better Business Performance through Staff Satisfaction’, Kogan Page 2008 Citation

Doherty, R 2010, ‘Making employee engagement an end-to-end practice’, Strategic HR Review; Volume 9; Issue 3; 2010

Guild, M 2007, ‘Employee Retention is an important as Recruitment’, Facilities Engineering Journal, November/December Issue 2007.