Robust Performance Management System- 5 key ingredients

In an ever changing and challenging business environment, quality of leadership can make or break an organisation. While leadership and its impact is much widely researched & acknowledged, in this article I want to focus on a key lever that  leaders have which can help them drive organisational goals more effectively i.e. performance management system. Unfortunately it is seen as an additional and avoidable burden by line managers. They fail to acknowledge its true potential to help achieve organisational goals, employee productivity, motivation & retention. Following are the top 5 ingredients for making it effective.

Leadership Focus

‘What gets focus, gets done’ is an old saying. Employees who see their top leadership teams emphasise and reinforce the importance of following the ‘performance management routine’, embrace it with more conviction and enthusiasm. The top leadership team which ‘walks the talk’ and holds itself to the same process rigor it expects from one and all is able to push its line managers and employees with much more conviction. It is worth examining how many organisations have their top leaders diligently document goals, measures of success, achievement & performance feedback.

Goal Alignment

Be it a small, mid-sized or large corporation, goal alignment at all levels is critical to ensure everyone is in sync and working towards a common goal. While it takes time, effort and a good level of automation, managers and employees at all levels should be able to set and align their goals based on top management priorities. An organisation’s values, principles and priorities ought to reflect in each employee’s goals.

First Line Manager- the Glue

First line managers are the glue that holds the organisation together. They can make or break any program or initiative within an organisation. You ought to get their buy-in and commitment before you embark on making any systemic changes to the performance management system. So what makes this vital group rally behind you? 3 things you could consider doing:

  • involve, seek feedback in design and execution
  • hold managers accountable; have specific measures set aside in appraisal
  • reward, differentiate and publicly recognise managers for their demonstrated leadership

Aggressive Differentiation

To establish an organizational culture which fosters meritocracy, differentiate aggressively amongst your employees. Through your actions demonstrate clearly that level of contribution and impact is the only factor which will make a difference in how they are treated within the organisation. Differentiate aggressively when it comes to rewards and recognition based on performance. Employees ought to feel that the system has teeth and that they stand to lose/ gain purely based on merit.

Has the needle moved?

All said and done, check the degree the needle has moved on key organisational performance parameters. These could be a diverse set (the ones listed below only indicative):

  • has the organisation achieved the tangible goals it set out to achieve
  • do employees at all levels experience clarity of direction resulting from better goal alignment
  • do employees feel motivated, engaged and willing to give their best

Keep assessing and changing the performance management system over time by seeking & listening to feedback from variety of sources. Believe me, the investment you make in carefully designing a robust performance management system and diligently working at it will pay rich dividends over the mid- long term for the organisation.


By Rajeev Malik

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