They’re about evolving your organisation’s way of working and helping employees reach their potential.
If you think that sounds difficult, you’re correct. Research shows most change initiatives fail, making effective culture and performance management even more valuable.
“Your performance depends on your people. Select the best, train them and back them.”
— Donald Rumsfeld, former US Secretary of Defence
It’s also vital to the long-term health of your business. Organisations exist in a state of flux, operating in a constantly-changing world. So even if you’re on top today, you’ll need to manage culture and performance well to ensure your performance is sustainable.
Performance management is a holistic process that brings together people management, learning and development, performance measurement and organisational development. That can make it difficult to pin down, but CIPD academics define it as:
“A process which contributes to the effective management of individuals and teams in order to achieve high levels of organisational performance.”
— Armstrong and Baron, CIPD 2004
More tangible are the tools of performance management, which can be used to improve visible short-term metrics.
Tools of performance management
- Performance appraisal — The most visible method of managing performance and appraisals usually relies upon employee-line manager meetings to define and review objectives and progress. Many organisations conduct performance appraisals annually.
- 360-degree feedback — An appraisal method that utilises a wide range of performance data sources, including the employee’s colleagues, customers and line manager.
- Pay —Benefits of this common approach are that it incentivises good performance, and links the organisation’s wage bill to revenue. Possible negative effects include increased focus on short-term results, which can undermine the organisation’s wider aims.
- Training — Learning and development has a big role to play in performance improvement. Use of personal development plans (PDPs) enable managers to set targets that meet organisational needs.
- Objectives and standards — Performance objectives and standards can give employees visible targets to aim for and a clearer understanding of what’s expected from them.
Changing organisational culture
Guiding your organisation’s long-term success requires a different approach: managing culture, or organisational development.
“[Culture is] a pattern of shared basic assumptions that the group learned...that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way.”
— Edgar Schein, MIT management professor
Culture develops naturally, and affects every aspect of how your organisation operates. But its direction can also be influenced. Ensuring your culture fits your future needs is vital to sustaining success.
Effective change management
Changing culture is also a major undertaking. The following is just a brief glimpse of the practices that can make change management effective.
- A well-designed transformation — Successful transformations align their culture-change goals with business strategy. They’re presented in a context that employees can get on board with, thereby removing the obstacle of resistance to change.
- Building understanding — When employees understand how change will happen and the positives it will bring, the abstract idea of ‘culture’ becomes more meaningful. Use of stories, conversations, pictures and symbols can help to engage individuals.
- Managing the transformation — Culture is rarely changed through force of authority. Through negotiation and engagement with employees, you can build trust and understanding that overcomes resistance to change.
More about culture and performance management
For detailed answers to your culture and performance management issues, use our resources below. BrightBase brings you up-to-date compliance guides, opinions from leading HR professionals and lots more essential reading.