A beginner's guide to performance management

May be you skipped HR classes even better the business school itself. And now that all that drop school celebration has settled, you want to figure a thing about performance management. In a simple way that is.

Luck turned a corner for you, here it is, a beginner's guide to performance management, written in simple script. Just a warning, after reading this, you won't be able to claim ignorance as a reason of not implementing it.

Why performance management is important for Organizations is because:

  • If you have a target as an entrepreneur, then everyone in your venture has to have one. Or you'll end up doing everyone's job.
  • The only thing that keeps your team away their Facebook pages are their unmet targets. Now you know why targets are a must.
  • Performance management is not just about targets but targets are at the core of it.  Without targets, you don't remain a venture, you start looking like government.

Let's move to How of performance management. Yes, we promised simple, it'll be that.

Start with defining key focus areas for your departments

So Marketing department would be focussed on creating awareness about your brand, driving communication with prospective clients, defining attractive options to ensure that clients buy your offerings. Marketing will also ensure that the money committed by clients does come in. This might be a simplistic version, you can add according to your business, but if you just lift this, you won't be way off. May be you can add, ensuring that clients buy again and that they refer you around. See you get six focus areas for your Marketing department. Those who didn't drop business school call these as KRAs. They draw them for each role, but trust us that's where they're recovering their school fee, on your cost. Ignore it, department level KRAs are good to go.

Now deal with department in-charge & tell her its her job

Almost all performance management efforts fail here. She thinks its all HR's conspiracy to skip her  increment, so do the "why" and "why now" talk. This is hard work, but remember you've just this one level and if you succeed, department heads will do it for the rest. Discussion with department heads is important not just so they understand about focus areas, probably they know it already, its important so they know that you are serious about implementing performance management. Also discussing KRAs ensures that the context is shared well, for its the managers who will eventually set targets against these KRAs and they'll also evaluate performance against these.

Decide performance periods, no its not the appraisal period

Set the performance run or sprint distance in units of time, monthly, quarterly, biannual based on how your business runs. Performance period should be such that targets can be set accurately enough and the process of target setting and reviews is manageable for your managers. Understand that it can be laborious for managers to set and review targets on time, if you do not use an automated system to accomplish this. plugHR offers plugHRapp as its performance management tool, you can look at that or use any tool, automating this piece is important.

Congratulations! You have just installed a vanilla version of performance management system in your venture. If you did it yourself, you just saved your venture a cool $20,000, that any Consultant would have charged you for this.

Now watch for implementation on turn of every performance period. If required make one day at the start of every performance period as performance management day. On that day all managers will complete review and set targets for new performance period. Do this for one year and you'll send us a Thank you card.

We can tell you a lot more about performance management but we promised simple and we remember you'd dropped business school, we don't want you to drop out of this blog. So this year, let's just do this:

  1. Set department KRAs
  2. Talk to department heads
  3. Decide performance periods
  4. Keep one day of the performance period as target review and settings day

Remember, you don't start with a perfect performance management system, you reach there. So start.

plugHR is thoughtfully built, I can run my HR without knowing much
— Manoj Shah, Founder, 10CFO.com