Performance Management Systems Lined to Learning Management Systems. Consider the following topics: annual appraisal ratings, appraisal interviews, feedback, goal setting, coaching, linkages to employee development, and linkages to organizational rewards. Using these elements, design what you think would be an effective performance management system.
Consider the following topics: annual appraisal ratings, appraisal interviews, feedback, goal setting, coaching, linkages to employee development, and linkages to organizational rewards. Using these elements, design what you think would be an effective performance management system. How would you link these requirements to a learning management system? Share the results of your research on performance management systems in this week’s discussion question.
Summarize your findings in a 3-4 page paper. Please use APA style throughout your paper. You are required to provide a title page, body of the paper, and outside scholarly references. Please provide 4 references.
Organizational performance management (sometimes called corporate performance management) is a term used to describe the methodologies and processes that help you define, measure, and ultimately achieve your strategy. Three commonly used forms of organizational performance management are:
In our humble opinion, the Balanced Scorecard (BSC) is one of the best types of performance management systems available, and for good reason: 88% of BSC users say the framework is extremely or very useful in helping them achieve their goals.
What makes the BSC unique is that it combines four different business perspectives—financial, customer, internal processes, and people—to help companies understand and achieve their organizational objectives. Some key points about the BSC are:
Created by influential management consultant Peter Drucker, Management by Objectives (MBO) has many variations. Essentially, it centers on creating a set (anywhere from two or six) of organizational objectives, which are then used as guideposts for creating individual employee objectives.
Some of its key characteristics are:
The term Management by Objectives has been around a while, but you don’t always see it in strategy documents. One way to recognize this approach is by looking at the strategic plan, which might have a set of goals and then objectives. You will also then see a list of activities or actions that the organization is grouping together to try to improve those goals and objectives.
Sometimes, the budget leads the performance management process rather than strategy. In this case, “work plans” are linked to the overall budget of the organization, and spending goes to the projects and programs that deliver results. It is a less commonly used performance management system, but it works for some organizations. Some of its key characteristics are:
Also called human resource (HR) performance management, personnel performance management systems provide a framework for evaluating the performance of your employees, as well as linking and aligning those individual performance levels to the strategy of your divisions, departments, and enterprise as a whole. There are two different types of performance management systems for staff members: Objectives and Key Results (OKR) and HR review-driven systems.
Currently the most popular framework, OKR is a simple way to set, track, and measure progress toward goals on a regular basis. Here’s how it works in a nutshell:
The OKR system is simple, and with the right controls and structure, you can achieve great results. It also states explicit responsibilities for employees, so everyone knows their role, has tangible goals, and works at a fast, consistent pace to get there.
An HR review-driven performance management system isn’t necessarily an alternative to OKR, but rather an additional way of measuring individual performance from an HR perspective. An OKR framework tends to be more strategy-driven, focusing on performance factors that would impact an individual’s achievement of objectives. For example, sales department OKRs could measure things like the number of people the individual reached out to for a product demo.
HR review-driven systems are also interested in aspects of performance unrelated to objectives, such as whether an individual is developing a specific skill set or if they are a good fit for the team. Often, these types of evaluations are separate from an OKR system, but may also need to be measured. Some characteristics of an HR-driven approach are:
The answer is: It depends on how your organization thinks about strategy.
If you’re a strategy-driven organization with an active strategy office, a Balanced Scorecard will be pretty helpful for you. The advantage to choosing BSC is that you get a comprehensive view of your strategy that makes it easier to manage organization-wide.
If your strategy consists of individual departmental goals, Management by Objective is a good choice. With MOB there’s no alignment of goals across the organization, but there are clear departmental goals.
If your strategy is driven by the finance department, a budget-driven form of performance management would work best for you. In this case, you won’t have to worry about strategy as a factor that could potentially force you to allocate your budget in nontraditional ways.
The same is true for personnel performance management frameworks—the approaches named above have different uses and are driven by different parts of the organization.
Strategy-driven organizations would benefit from having an OKR (or personal scorecard) system that would help drive organizational performance. And if you have an active HR department that also wants to nurture, develop, and identify talent, you would also benefit from conducting regular HR performance reviews.
Finally, keep in mind that organizational and individual performance management systems work best when combined. For example, you may determine that to attain true strategic alignment, you need a combination of the BSC with linked OKRs at the individual level. In an ideal world, employees should not only be working to achieve organizational goals, but also improving their own skill sets for the future good of the company. What combination of performance management frameworks will help you lay the foundation for that approach?
A word of warning: Don’t let your systems get jumbled or you will struggle to get results. Don’t attempt to have the HR department dictate strategy, or the strategy or finance departments get involved in competencies and promotions. Different departments should collaborate to carry out a combined approach to performance management; as long as all departments understand their roles and who is taking “the lead” at specific junctures, different systems can work well together.
At this point, you might be wondering how the most successful organizations manage to orchestrate a comprehensive performance plan—it sounds like a daunting task. We’re glad you asked! ClearPoint performance management software was tailor-made for the job—and we’ll show you how.