“Help Me Become a Better Employee”

5 Characteristics of an Effective Performance Management System

“Painful,” “too much effort,” “not popular,” “a necessary evil”—Do these words come to mind in thinking about your organization’s approach to managing employee performance? These are words that APQC employees, managers, and leaders used to describe APQC’s pre-2012 approach to performance management.

After hearing employees express a strong desire for more guidance on how they could grow their careers at the organization, APQC set out to change how its employees, managers, and leaders experience performance management. APQC has emerged from the initial stages of this transformation and is sharing what it learned. Based on years of human capital management research, we know that negative feelings toward performance management are the norm, not the exception.

This new performance management system is helping both employees and the organization reach full potential because it is objective, clear, easy, familiar, and useful. Does the performance management system at your organization meet these criteria?

Criteria for Effective Performance Management

• 1. Objective—Performance goals, measures, rating criteria, and feedback should be objective. Goals should reflect what really matters day to day for each job. Assessment and feedback should be based on manager or stakeholder observations and should directly relate to goal expectations. APQC employees and managers have commented that performance conversations are much easier to have when they center on how closely the employee’s behavior matched previously agreed upon expectations.
• 2. Clear—Performance goals, measures, and rating criteria should be unmistakably defined. Performance feedback should be specific. Employees and managers must share a common understanding of goals, measures, and rating criteria. Measures should list the specific results that managers seek. The rating scale should list examples of what it looks like when an employee fails to meet, meets, or exceeds expectations. The number of performance goals per employee should be limited to give employees clarity of focus.
• 3. Easy—Performance management processes should be easy to carryout. It should be easy to set goals, document observations, and evaluate performance. The number of steps required should be minimized as should the amount of information that managers and employees need to record. Technology can simplify performance management processes as long as it is intuitive. APQC introduced new technology and work processes that encourage recording and sharing of performance observations throughout the year. At annual review time, accurate and detailed performance information will already be in the system, reducing the administrative burden and improving the specificity of feedback and the accuracy of ratings.
• 4. Familiar—Performance management should drive employee performance every day. Giving and receiving feedback should be a regular occurrence, not a once-a-year event. Both managers and employees should have ongoing, informal performance conversations as well as quarterly performance check-in meetings. These should be familiar, not feared. At annual review time, there should be no surprises; managers and employees should be on the same page in terms of performance expectations and assessments.
• 5. Useful—Performance feedback should be actionable. Performance management documents and discussions should clarify what’s in it for the employee. Managers should be taught how to write and deliver specific and actionable performance feedback— feedback that employees can use to make decisions on how they will improve and grow their careers. In addition, managers should be required to describe the personal value that employees can reap from achieving their goals. Altogether, it should be easy for employees to see that performance management is as much about them realizing their full potential as it is about the organization achieving peak performance.

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This list of characteristics is simple. Bringing these characteristics to life inside a real organization with real people is not. You can learn how APQC brought these characteristics to life by reading our white paper, 11 Success Factors for Transforming Employee Performance Management and our in-depth case study, The Evolution of Employee Performance Management. If your organization is an APQC member—many are—use your company email address to register for access. If your organization is not an APQC member, check out our free article: The Evolution of Employee Performance Management: A Brief Synopsis.

Tell us what you think. Could these qualities turn what is so often a dreaded process into one that both employees and organizations value? What would help you become a better employee?

Elissa Tucker, a research program manager with APQC, a Houston-based nonprofit that focuses on benchmarking and best practices. Her focus is on uncovering and sharing human capital management benchmarks and best practices. Elissa has more than 14 years of HR research, writing, and consulting experience. She has led large-scale quantitative and qualitative research studies and authored numerous research reports, white papers, and presentations. Elissa co-edited and contributed to the book: Workforce Wake-Up Call: Your Workforce Is Changing, Are You?, John Wiley & Sons, 2006.