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Tuesday, 29 July 2014

Cumbria group helping to build better leaders

IF we define performance as the successful implementation of actions in order to reach desired objectives and targets, then performance management is the development of systems, processes and measures of performance, writes AL MATHER Centre for Leadership Performance.

So far so good, therefore, all we need to do as managers is implement performance management approach and all our performance problems will be solved.

Or will they?

Think about the public sector and the introduction of performance measures in the 1990s.

Public institutions were directed to implement systems to measure performance of services against a set of targets and then publish the data.

The idea of this policy was to give the public a better idea of how government policies change public services and improve their effectiveness.

However, this approach led to several good and bad outcomes.

In some cases ill-thought-through targets led to unhelpful behaviours and a reduction in the quality of services.

Patients left in the corridors or the misrepresentation of service outcomes because of the way things are measured.

This is not just a public sector story though. There are many examples from industry where performance management systems alongside performance related pay can lead to organisational misbehaviour and ultimately organisational failure.

The finance sector is known for its sophisticated performance management systems – the same systems that over-rewarded individualism and risk taking whilst fundamentally undermining the sustainability of the whole finance system.

Therefore, performance management systems need to be very carefully thought through and implemented if they are to have a positive impact.

One of the problems with the unthinking application of performance management and other management systems is the assumption that these systems exist in a totally predictable and controllable world.

As managers we know management takes place in a complex, messy and unpredictable world.

Managerial phenomena can be understood and explained but are very hard to predict. The assumption of some management theories and practices are based on false ‘science’ by claiming predictability and causality that do not exist.

These can lead to an over belief or dependency on systems to sort out problems. Systems don’t sort out problems – people do – and systems can only ever support, not replace, a manager in taking on problems and sorting them out.

So it might be tempting to throw away management systems, including performance management, and just leave it all to chance and just muddle along.

Many firms do this actually, particularly start-ups and small firms, and often just muddling through is actually quite a reasonable strategy if there is a strong product and customer base.

However, it is when it comes to growing a firm that there is a need to introduce systems and processes to support the increased activity and complexity.

If managers and executives recognise the inherent weaknesses of management systems and work carefully to address them and compensate for the fact that all management systems succeed or fail by the ability of the people using them, then good processes and systems can serve them well.

Many of the companies we talk to at the Centre for Leadership Performance have introduced performance management systems, however, they still have performance issues.

This is not uncommon or surprising. Performance management systems are only as effective as the people managing them and that targets can lead to unwanted behaviours and outcomes.

Managers need to be vigilant about the impact of their performance management systems and be prepared to change and adapt the system to the realities of the people using the system.

Systems will only work if the behaviours of the people are aligned with the intended purpose of the system.

For example, appraisals as part of a performance management system can be effective – however, they are often merely a form-filling exercise as the appraiser and appraisee fail to have the critical and real conversations about what is really going on with an individual’s performance.

The ability to give and receive feedback are critical components of performance management systems – and are often absent even at the highest levels.

At the Centre for Leadership Performance we are committed to working with organisations in Cumbria to build capabilities of leaders to increase performance. If you are interested to have a free consultation on your management and leadership issues just drop a line to al.mather@cforlp.org.uk

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