Tweet

The Value Spectrum of Performance Management

Guest post by: Peter Vlant

Article Overview: The ‘Value Spectrum' is a term we use to describe how Managers and Executives should be positioning performance goals so that their employees can significantly improve organisation performance. The ‘Value Spectrum' is part of what an employee does that adds significant value to the organisation as opposed to doing things that need to be completed as part of their core duties. Core duties relate more to the position or job description document i.e. tasks the employee already executes to a high standard but which don't help transform the organisation as a whole.

The Value Spectrum of Performance Management

When we are working with Senior Management teams and Executives, it becomes clear that very few have the skills or know how required to drive what we call the ‘Value Spectrum' of Performance Management (PM). i.e. to make the PM program really work for the organisation as a whole. The ‘Value Spectrum' is a term we use to describe how Managers and Executives should be positioning performance goals so that their employees can significantly improve organisation performance. The ‘Value Spectrum' is part of what an employee does that adds significant value to the organisation as opposed to doing things that need to be completed as part of their core duties. Core duties relate more to the position or job description document i.e. tasks the employee already executes to a high standard but which don't help transform the organisation as a whole.

The ‘Value Spectrum' can be visualised in the diagram in the Value Spectrum whitepaper on the PeopleStreme website.

Driving the ‘Value Spectrum' of Performance Management



In the majority of cases, we find that managers set Objectives or Goals that relate to the Core Role and Responsibilities. i.e. related to the job description. This adds very little incremental value to the organisation but rather sustains the status quo. Setting objectives on the Core Role and Responsibilities is necessary in cases where employees are not achieving the Core Role and Responsibilities. However, it is not necessary where employees are already achieving their Core Role and Responsibilities and are looking for further challenges.

The question for any organisation striving to improve performance is: Why do managers set objectives that merely maintain performance, rather than increasing it?

We usually find the answers to be:

a) Managers don't know how to set goals for improving performance as they have never been trained or shown how to set proper objectives. This is a skills issue for managers.

b) Managers fundamentally don't know or understand that Performance Management is the only viable way to drive incremental value for the organisation in the real world. They lack understanding of why and how Performance Management contributes to the ‘Value Spectrum'.

c) The organisation's existing Performance Management process does not require anyone to think about the level or measures of success for each objective or goal. Therefore, the employee and manager do not have to think about how to define clear levels or measures and consequently never acquire the skills to set objectives that address the ‘Value Spectrum' process.

Practical Example



Examples help to clearly illustrate the ‘Value Spectrum' issue. A typical manager wants to set an easy numerate objective (quite common for most managers) and writes one as follows:

"Improve sales by 13% by June 2011."

This manager has been informed by the HR Manager that they should set SMART Objectives (Specific, Measureable, Achievable, Relevant, Time Bound). The manager looks at the objective and notes that she thinks the objective is Specific (to do with sales improvement), it is definitely Measureable (increase by 13%), definitely Achievable (the employee agrees they can achieve it), Relevant (the employees role is to win new sales) and Time Bound (by June 2011, presumably 30th June).

The manager and employee discuss the objective and agree it is valid. The employee works on the objective, discusses progress with the manager at regular intervals and at June 30, achieves 13%.

The real question is, where does 13% sit on the ‘Value Spectrum' ? Did this employee really help the organisation or was the 13% easy to achieve ? Did the employee generate real value for the organisation or did they achieve the goal whilst perhaps less capable team members achieved far greater results ?

To drive effective goal and objective setting, it is possible to map your ratings on the ‘Value Spectrum' as indicated in the diagram in the Value Spectrum whitepaper on the PeopleStreme website. This illustrates to an employee how the ratings at the end of the period will be used to determine success.

A more effective method is to not only graphically illustrate how the ratings will be used, but also to write each objective with measures, as explained below:

Exceeds Expectations:

Improve sales by more than 20% by June 2011

Meets Expectations:

Improve sales by 13% to 20% by June 2011

Does not meet Expectations:

Improve sales by less than 13% by June 2011

Objectives with measures that clearly spell out the desired outcomes drive value by enabling the employee to understand how they will be rated and what they need to do to get to the higher rating.

Conclusion



Performance Management is a simple yet very powerful program if conducted in the correct way. This means that processes need to be clear and require the right managerial skills to set high quality objectives that articulate where value is being added and where it is not.

Related Articles
  Don't Search For A Great Sales Leader - Look For The Right One
  4 Building Blocks of an Effective Talent Management System
  Organizational Readiness To Performance Management
  It's As Easy As Good, Better, Best!
  A Management Challenge: How to Enhance Average Performance
  Appealing As Part Of Performance Managment
  THREE FACTORS MAKE PERFORMANCE MANAGEMENT A SUCCESS
  Managing Employees Performance
  Successful Succession Planning - Driven By Managing Performance
  Leadership for Growth
  How to manage and motivate a team
  Designing A Performance Management System
  Sales Training for Senior Manager Performance Improvement
  Top Ten Tips About People Management
  Learn about CRM benefits to Call Center
  TIME FOR BUDGETS BUT NO TIME FOR PERFORMANCE MANAGEMENT!
  Situational Leadership Theory in Change Management - Different Strokes For Different Folks
  National Broadband Plan: a Boon to Telecommuting
  Management Skills That Drive Performance
  The overuse of "people" as competitive advantage

Article Tags: appraisals, performance development, performance management



Related Forum Posts
HRPreneur - Hi everyone, I am new to the forum and I recently started my own Human Capital (HR) consulting firm called HRPreneur Inc. HRP focuses on making human capital a strategic differentiator for SME's. Below is a summary about HRP; Who We Are: HRP is a Human Capital consulting firm with 30 years of experience that becomes an extension of your company by providing a full array of services to help you create a highly engaged workforce focused on achieving strategic results in order to build a long lasting great company! Mission: HRP provides small and medium sized businesses a Strategic HR Business Partner to increase employee engagement, resulting in cost savings, increased productivity and results at an affordable rate! Vision: To inspire and warrant SME's reach their full competency! Cost Effectiveness: We provide over 30 years of experience at a fraction of the cost at a strategic executive HR business level You will save between 50% to 60% in costs per year on salary, bonus, benefits, training, office space alone We will provide you additional cost efficiencies through our services Services: • Strategic Human Resources Planning • Organizational Redesign • Change Management • Organizational Culture Development • Employee Engagement Programs • Leadership Assessment and Development • Compensation Design • Talent Acquisition • Assimilation and On-Boarding • Performance Management • Talent Management & Succession Planning • Human Resources Due Diligence • Human Resources Audit • Full Service HR Outsourcing
No B.S. Time Management - A great book I read on Time Management is No B.S. Time Management for Entrepreneurs by Dan Kennedy.
5 Entrepreneur's success stories - My local paper's business section profiled 5 successful entrepreneurs in the Jan 6, 2008 issue of the paper. Thought I'd share just a bit of it here. Bill and Heidi Dittmar: Executive Lifestyle Jeff Wassmer: Spectrum Deloise Hawkins, Star Whitaker and Lenzy Hill: Touch of Elegance Stephen Brosius: Advanced Door Systems Pam Watson: Goodrich and Watson Insurers Bill and Heidi Dittmar: Executive Lifestyle founders of a magazine called Executive Lifestyle. Started in 1991. Revenue has grown more than 200% since 2004. 4 full time, 3 part time employees "We started off with $1,000 and a stupid idea." It began as This Month, a guide for tourists, and morphed into Executive Lifestyle. Jeff Wassmer: Spectrum Company specializes in computer network security and intelligence surveillance and reconnaissance. Wassmer was an 11-year Air Force guy, so he had "ins" in order to form this business. Deloise Hawkins, Star Whitaker and Lenzy Hill: Touch of Elegance Founded business in 1994. 12 employees. Their company designs and plans an average of 25 events each month in Hampton Roads and other parts of Virginia. Stephen Brosius: Advanced Door Systems Started company in 1995. 5 full-time employees, plus subcontractors. After having worked as a subcontractor for others in the construction business for 20 years, he decided to start his own business. Pam Watson: Goodrich and Watson Insurers At age 49, she was approached by an insurance colleague to buy out their employer's insurance division. They did so, and became employers themselves., witj 4 full-time people.
ARTICLE: Performance coaching in the workplace - To create lasting performance change it is necessary to first understand the positive and negative influence that a person’s personal behaviors has on their execution and what impact these have on their ability to achieve success. Only when we fully understand a person’s behavioral patterns and create positive self-managing coaching strategies can we assist a person to create lasting performance change. The vast majority of employers believe coaching can deliver significant benefits to both individuals and organizations. The majority of employers plan to increase the use of coaching over the next few years, according to a new survey by the Institute of Personnel and Development. Nearly nine out of ten interviewed companies expect their managers and supervisors to deliver performance coaching as part of their day-to-day work. In another large industry-wide study it was found that most managers reported that they were confident in their ability to coach. However, the study also showed that the managers’ actual skills levels as coaches were typically poor. As a consequence they were not nearly as effective in their coaching as they believe themselves to be. Often times, they believed that coaching consisted of just providing 1-to-1 instructional feedback to their staff members on what to do in a given situation to perform better. Many recent studies have shown that technical skills only represent at best 20% of the contribution into our performance. The remaining 80% comes from our ability to choose or make a decision, assertiveness, commitment to grow, ability to concentrate, honesty, optimism, persistence, ability to perform well under stress and so on. These traits are commonly called our soft skills or attitude. Few managers understand just how deeply rooted their own behavior patterns are, let alone how to positively change them in other people. Performance coaching is frequently confused with other types of coaching, such as Executive coaching and Life coaching. Performance coaching is a form of Directive coaching. Executive coaching and Life coaching are both forms of Non-directive coaching. Directive coaching is usually more suitable for a manager who sometimes acts as a coach. Performance coaching in the workplace has developed immensely from what it was only 4 years ago. To choose the right coach will make a huge difference. You also better make sure to know what you want. If your coach knows what (s)he is doing – you will get on your way to get it! [i:38tu5pgr]- Peter J Karlsson[/i:38tu5pgr]
Which kind of industries are you interested in? - Ecological or E-business or Investment or Finance or Management or Non-Profit or Retailer or others.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

The True Cost of Employee Turnover

African Technology Development

Self Employed Business Ideas

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.