1. INTRODUCTION TO PERFORMANCE MANAGEMENT
“ Since my last report, this employee has reached rock bottom and shows signs of starting to dig.”
“ I would not allow this employee to breed.”
“ Works well under constant supervision and cornered like a rat in a trap.”
“ He sets low personal standards and then consistently fails to achieve them.”
“This associate is really not so much of a has-been, but more of a definitely won’t be.”

2. PERFORMANCE MANAGEMENT
Some Perspectives:
85% of SA companies have a PMS
95% of these have a strong commitment of the CEO
In 94% of these organisations, there is a formal communication strategy
Only 51% believe employees and managers are adequately educated and trained in PMS
37% uses the Balanced Scorecard methodology
86% allows employees to jointly set targets and objectives with the manager
91% have clear PMS policies, procedures and systems in place.
Most companies measure performance using hard and soft measures
2001 Deloitte & Touche HCC Survey

3. PERFORMANCE MANAGEMENT
“So what is Performance Management”? (if 85% of companies apply it, what do they actually do)?
Group Discussion:

4. PERFORMANCE MANAGEMENT
A Definition:
Performance management is the process of ensuring individual and team effort support the organisational objectives and to realise key stakeholder expectations and wealth creation in all the identified value drivers of the organisation.
Thus:
Planning is crucial
Stakeholder expectations are key drivers
Management and employee buy-in and involvement are paramount
Link to and alignment with strategy

5. PERFORMANCE MANAGEMENT
Performance Management is the process of:
Planning Performance (setting KPA’s, objectives and standards that are linked to corporate strategy, development plans).
Maintaining Performance (monitoring, feedback, coaching and mentoring, regular interactions re goal achievement)
Reviewing Performance (formal feedback and ratings – evaluating performance)
Rewarding of performance (increases, bonuses, incentives, etc)

6. Performance Management Model
Planning Performance:
Setting objectives
Outlining development plans
Getting commitment
Reward Performance:
Link to pay
Results = performance
PERFORMANCE
MANAGEMENT
PROCESS
Reviewing Performance:
Formal reviews
Assess against objectives
Maintaining Performance:
Monitoring performance
Coaching
Feedback
Business strategy, stakeholders, key economic wealth drivers

7. PERFORMANCE MANAGEMENT
Planning – 80% of the process
Planning includes:
Identifying Key Value Drivers of stakeholders
Defining Key Performance Areas (KPA’s)
Defining Objectives
Defining Targets
Devel a training & development plan

8. PERFORMANCE MANAGEMENT
STRATEGY, STAKEHOLDER EXPECTATIONS – THE CHALLENGE OF ALIGNMENT
“With no harbour, no wind will be the right wind”
Between 92-97% of Companies have a vision and some strategy statement. Only between 3-7% of staff know and work by it.

9. A Model for establishing/building a performance management process
Deriving key value drivers from
Strategic direction and KPA’S
Determining and assigning KPA’s
Determining organisational objectives
Determining and assigning individual
objectives
Execution
Measuring & Evaluating performance
against organisational objectives
Measuring, evaluating and rewarding
Performance against individual
objectives
Reassessing and adjusting business
strategy
Reassessing KPA’s and adjusting
Objectives to reinforce strategy
Review

10. PERFORMANCE MANAGEMENT
Benefits:
A well implemented performance management process is beneficial to the company, its managers and employees. The advantages being:
Integration
 Open Communication
 Improved Performance
 Training and Development
 Clarity of Standards/Requirements
 Placement of Individuals
 Increased Objectivity
 Remuneration
 Promotability
 Career planning

11. PERFORMANCE MANAGEMENT
Selecting and evaluating a Performance Management System:
Level of employee participation and involvement?
Competency-based?
Is it form-driven or REAL performance management (daily)
Is linked to rewards AND development?
Does it focus on both the “what” and the “how” of result achievement?
Does the process incorporate training (both process and soft skills)?
Is it generic, and can it be customised to your organisation’s needs and culture?

12. PERFORMANCE MANAGEMENT Some Key Building Blocks
Success factors in implementing Performance Management:
“If you are not managing performance, what are you managing?”
Some Key Building Blocks
Feedback
Training
Reward &
Compensation
Review Process
Process Design
Competencies
Goal Setting
Strategy Focus

13. PERFORMANCE MANAGEMENT
Success factors in implementing Performance Management:
Fundamental Requirements/considerations:
Relevance
Link to strategy, clear job goals, up-to-date job profiles
Reliability
Consistent measurement, rating errors
Discriminability
Ability to discriminate between good and poor performance
Freedom from contamination
External factors should not influence measurement (resources, line of sight)
Practicality
Easy to use, understandable, manageable administration
Acceptability
Perceived legitimacy, involvement
Legal compliance
Labour law compliance, EE Act, substantive and procedural fairmess

14. PERFORMANCE MANAGEMENT
Coaching and mentoring are crucial components of the Maintaining of Performance Phase:
Planning Performance:
Setting objectives
Outlining development plans
Getting commitment
Maintaining Performance:
Monitoring performance
Coaching
Feedback
Reviewing Performance:
Formal reviews
Assess against objectives
Reward Performance:
Link to pay
Results = performance
PERFORMANCE
MANAGEMENT
PROCESS
Coaching is a formal process. It is the day to day process of helping employees recognise opportunities to improve their performance and capabilities.
Coaching = Give a man a fish a day, and you fed him for a day; teach him to fish, and you fed him for life.
Confucius

15. PERFORMANCE MANAGEMENT
COACHING:
Give Feedback (EEC Model)
Ask for ideas and suggestions
Discuss
Use the following questions:
Where?
What is happening now?
What are u going to do next?
Coaching provides immediate feedback on performance
HOW DOES COACHING DIFFER FROM MENTORING?

16. PERFORMANCE MANAGEMENT
PERFORMANCE AUDITS
Case Study 1: Mining Company in Southwest Africa
Case Study 2: Global Company
Key topics:
What do you audit
How do you audit Performance Management?
What can you expect?

17. PERFORMANCE MANAGEMENT
PERFORMANCE AND REWARD
What gets measured gets done
What gets rewarded is sustained
Measures give rewards relevance, and rewards give measures meaning (TB Wilson)
The majority of workers want recognition for achievement
Dilemma’s in reward:
Objectivity
Transparency
Affordability
Baggage
Retention Value NB

18. PERFORMANCE MANAGEMENT
A Reward Matrix:
Rating
25th Percentile
50th percentile
75th Percentile 5
17%
15%
10% 4
12% 8% 3 6% 2 1

19. PERFORMANCE MANAGEMENT
LINK TO PAY:
Why does it often fail?
Lack of objective and quantitative measures
Poor link between pay and performance (no immediate reinforcement)
The aspects that get rewarded are not linked to strategy – the “wrong” behaviours and achievements are sustained
Poor communication re objectives, benefits and procedures (the “rules of the game”)
Level of performance-based-pay not proportionate to effort
Resistance to change
Union perceptions and involvement

20. PERFORMANCE MANAGEMENT
The Psychology of INCENTIVES:
KEY
IMPACT
KEY
OBJECTIVE
SECONDARY
OBJECTIVES
Hygiene
Factors
Competitive
in Market
Internal Equity
Cost Management
Flexibility
Fixed
Package
Motivational
Drive
Behaviour
Return on Bottom Line
Reward specific behaviour/results
Variable
Package

21. PERFORMANCE MANAGEMENT REMUNERATION COMPONENT:
Attract
Retain
Skills
X X X
X X X
X X
Guaranteed Package
Short-Term Incentives
Long-Term Incentives

22. PERFORMANCE MANAGEMENT
How do you link Performance Management to Training & Development Initiatives?
Desired performance
The “Link”:
Measurement
Vision
Mission
Strategy
Value Drivers
Actual performance
Development

23. PERFORMANCE MANAGEMENT
PERFORMANCE MANAGEMENT IN SMME’S
Key Challenges:
Strategy not always clear, defined or formalised
Decisions are not taken to lower levels (“family business” syndrome)
There often are:
Little time
Few resources and finances
Little support
Not adequate skills
The “we do fine” syndrome

24. PERFORMANCE MANAGEMENT
Q & A