CHAPTER 1

What's Your Situation?

What performance management and appraisal mean in your specific situationdepends at least largely on your organization and on expectations—bothformal and informal, explicit and implied.

What is performance management for your organization? How is it handled? Whatare the processes and practices?

Performance Management in Your Organization

There are several models for performance management maturity that show aprogression consisting of four or five stages or levels. Exhibit 1-1shows an example of a performance management maturity model.

In the Performance Management Maturity Model (PMMM) (Exhibit 1-1),roughly one-third of organizations are stuck in Stage 0 or 1. These aretypically, but not solely, small businesses that need some sort of performanceappraisal form to protect themselves from lawsuits arising from claims ofimproper action by their managers. The performance appraisal process is nottaken too seriously. Distribution and collection of forms are the responsibilityof HR, and managers may actually get away altogether with not doing appraisals.In these organizations, performance appraisal is not used to link strategy withpeople, but is merely a paperwork function that has to be done just like expenseforms and change orders. We hope this book will help managers in theseorganizations manage performance and coach, lead, and develop their employees.

Most organizations are in Stage 2 of the PMMM. They have automated theperformance appraisal process, it is considered an integral part of everymanager's responsibilities, and managers do it with reasonable skill andregularity. It's part of a larger performance management cycle that includesperiodic check-ins, coaching, and planning. But it's still not an integral partof overall strategy. When goals are formulated at the highest levels in Stage 2organizations, there is no concerted effort to drive goals down to the firstlevel of the organization. Strategy may be discussed, PowerPoint presentationsmay be made, memos may be sent, but the real work of integrating performanceappraisals with overall goals is neglected. At the high end of Stage 2,organizations become conscientious about coaching and managing performance andinsist that managers adopt a coaching role with their subordinates. Yet despitegood intentions, there's little coordinating effort to ensure that coaching andobjective writing are done in a consistent and verifiable fashion.

A handful of companies have made it to Stage 3. Not only do they have fullyautomated performance appraisals in place, but performance management isuniversally adopted. Tools are readily available in the form of training andcoaching, and the organization supports a learning culture from top to bottom.These organizations have learning management processes that are respected andpowerful and fully utilized by employees and managers. In the appraisal process,managers in these organizations all use notations directing associates tointernal training opportunities and the organization supports and makes readilyavailable improvement efforts.

They train managers in how to conduct performance appraisals, how to coach andcounsel, and how to deal with employee problems. They keep records onperformance management-related actions by both managers and subordinates andautomatically prompt managers when critical events are due. These organizationssometimes describe their HR functions as "talent management" to includesuccession planning, high-potential programs, mentoring, advanced businesstraining, and careful scrutiny by senior management of people plans throughoutthe business.

Stage 4 organizations may be as much a theoretical concept as real brick-and-mortarcompanies. The concept represents a goal to be strived for more than aresting place for companies that have achieved performance appraisal perfection.Stage 4 organizations have all the tools of those at Stage 3 but use them evenmore dexterously. They have maximized the ability to react to marketfluctuations through alignment of people. They plan, execute, and change on adime. They are masters of continuous improvement without relying on thecumbersome structure of Six Sigma or other organizational overlays. They treatpeople management and development with the rigor of financial management and canaccount for the financial impact of training and coaching. They successfullyassimilate and orient acquisitions because their culture is both strong andpractical and they have a long-term working relationship with customers thatsurpasses all other partnerships.

The PMMM continuum is dynamic. Once an organization gets to Stage 3 or even 4,the leaders can't rest on their laurels. They must embrace change and acceptchallenges to their structure. It's a paradox that such cultures are so wellintegrated that they almost don't need the structure of even the most perfectperformance appraisal. But it wasn't always so and it isn't even now. To get toStages 3 or 4, you need the structures built in Stages 1 and 2.

Regardless of the level at which your organization operates, this book is abouthelping everyone who aspires to higher levels of communication and performanceusing tools designed to facilitate that. When performance appraisal is donewell, it improves employee motivation, performance, and commitment. It's thegoal of this book to help you do that. Doing the things this book recommendswon't necessarily get you to Stage 4, but it will help you build a platform ofskill that will put you much closer than you may be now.

Performance Management: Six Assumptions

Whatever the situation of performance management in your organization, what youas an individual manager do to manage the performance of your employees is up toyou. According to Robert Bacal, author of Performance Management(McGraw-Hill, 1999), there are six beliefs or assumptions that are basic tosuccessful performance management:

1. Performance management is a process undertaken with employees and not done toemployees.

2. The planning, communicating, and evaluating of performance occur as apartnership (with the exception of "unusual situations that require unilateraldisciplinary action").

3. Most employees, once they understand what's expected of them, will make everyeffort to meet those requirements.

4. The purpose of performance management isn't to look at the past and assignblame but to solve performance problems as they occur and prevent them...