I am HR Director of a medium sized company in Financial Services. I have been asked by our new CEO to show him reward criteria for our senior executives. He has asked to see their recent appraisals over the last few years as well as specific information relating to some managers who he feels are underperforming. We find it very difficult and time-consuming to track and maintain any type of people performance data, especially with our current paper-based procedures.
We have had a couple of cases in the past where we have had to pay out significant unfair dismissal compensation. The main reason for this is the lack of system to audit, track and therefore prove “underperformance” in specific cases. I want to be able to reduce compensation payouts over the year and create a better framework to audit performance and encourage performance improvement across the organisation. What is the most efficient way of doing this?
Paul P. Formance
Well, you are certainly not alone in wanting better checks on this topic – People Performance management is becoming more and more important to all organisations as they look to reward/retain the best talent and manage underperformance “up or out” without exposing themselves to compensation claims. A well-managed performance management programme can help you to achieve both by creating an auditable track of people performance across your organisation.
The importance of appraisals
Appraisals form an important part of a person’s employment history within an organisation. Despite this, they are often not completed, not finished properly, lost or damaged, never followed-up, subject to missed deadlines and so on. This means that there is no easily available way of capturing company-wide performance information and, in cases of poor performance, can also mean that vital information to support management perception is not available if you go to tribunal. The best way of managing this process is to introduce a simple online appraisal method. This allows your employees and managers to access appraisals at any time to instil the concept of ongoing performance management to avoid any surprises. It also guides them through the process and ensures that date deadlines are not missed. As a consequence all the information required is held online for reference and review at any time.
Auditing people performance
This also becomes very relevant to performance auditing purposes where you can aggregate performance data across departments and actually track progress against a performance improvement plan for that group or individuals. This will provide examples and data to support management perception if you ever have to produce actual evidence in court. These procedures are very easy to set up and technology can greatly assist in the management and administration of this type of process.
Using a solution such as the Performance Reviewer from a company like McLaren Solutions would allow you to have a working solution in place within weeks.
In order to measure performance effectively, you do need a performance framework to measure/benchmark against. Many organisations use skills or competency-based reviews whilst others incorporate company values, role-based objectives or key performance indicators into the mix.
Performance frameworks & improvement plans
By using an agreed performance framework, with tangible measurements and auditable stages, you could have measured performance in a consistent way across the organisation. This would have allowed you to put in place performance improvement plans to ensure that staff understand and agree where they have under-performed. This group of staff would then either improve their performance by undertaking development or would agree that their performance was consistently unacceptable – hence greatly reduced your exposure to unfair dismissal claims.
Using an online solution to manage this is the simplest, quickest and most cost-effective way of building a performance framework up-front and then delivering that framework via an appraisal or performance management process. Again modules such as those available from McLaren Solutions can assist with this process. In the meantime, good luck with your new CEO!