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The literature on performance management systems emphasizes that adopting a performance management scheme is similar to adopting a knowledge management scheme in that there is no 'one size fits all' model. However, it is possible to outline a sequence that is typical of performance management projects today. Michael Armstrong and Angela Baron[1] have adapted models by Cave and Thomas[2] and Torrington and Hall[3] to illustrate this.
Performance management should be addressed by management as a continuous, flexible process that involves the entire workforce. As such, it can be thought of as a cycle rather than a one-off or annual process. The Torrington & Hall and Cave & Thomas models described here also encapsulate the iterative nature of performance management and the need for performance management to be addressed and aligned at strategic, departmental and individual levels.
In 1995, Torrington and Hall formulated a model of the performance management cycle:
Source: D Torrington and L Hall, Personnel Management: Human Resource Management in Action (Prentice Hall, 1995). Adapted by Armstrong and Baron, Performance Management: The New Realities (CIPD, 1998), p 57.
Cave and Thomas then expanded on this idea by breaking it down to smaller elemental components:
Source: Cave and Thomas, The Reward Portfolio (The Training Directory, 1998). Adapted by Armstrong and Baron, Performance Management: The New Realities (CIPD, 1998), p 58.
It is helpful to address each component of the model individually:
Corporate Mission and Strategic Goals
The initial stage of the model allows an organization to make sure that the performance management model is integrated with the organization’s mission and goals, i.e. it is not conflicting with the strategic direction of the organization.
Business and Departmental Plans and Goals
The next stage is to formulate goals at the department level that are integrated with those at the strategic level.
Performance and Development Agreement
The next logical stage is to agree on goals at the individual level, and make sure that they are in alignment with both the strategic and departmental goals.
Armstrong and Baron suggest that managers and employees have meetings to discuss the future for individuals. Discussion should include agreement on the work that needs to be done, the individual’s results, the performance standards to be achieved, and the level of competence that the individual should attain.
Performance and Development Plan
This stage identifies what the individual’s requirements are, with regard to the agreed targets for results, performance standards and competency levels that should be attained.
Individuals should be aided in preparing a personal development plan, which should include explicit formulation of a plan to achieve the goals agreed with managers. For example, this might include some formal training as well as less formal training techniques, including self-managed learning, mentoring and coaching.
Action – Work, Development and Support
This stage concentrates on putting the planning stages into practice to achieve the goals set by managers and individuals during the series of meetings.
Continuous Monitoring and Feedback
The continuous monitoring and feedback stage is another key stage in the performance management process. Monitoring and feedback of these processes must be continuous and not something that is ‘inflicted’ on individuals on a yearly basis.
According to Armstrong and Baron, an appropriate style of monitoring and feedback must be developed and matched to the needs of the organization.
Formal Review and Feedback
Complementing the continuous feedback stage is a structured, formal system of review and feedback. This gives individuals and managers the opportunity to review and reflect on issues that have been addressed since the last structured meeting. The meetings should be informal and recognize individual achievements as well as broader issues that have arisen.
This stage might also be used to address upward-feedback issues that have emerged regarding the attitudes of the management.
At this point, Armstrong and Baron believe that it is important that managers undertake a developmental rather than a critical role.
Rating
The rating stage provides an opportunity to summarize the development of individuals over the previous stages.
However, as detractors of performance appraisal in the 1970s and its earlier incarnations noted, the ratings system is an over-simplistic and inconsistent means of assessing individuals. Armstrong and Baron maintain that these negative effects can be diluted by using rating systems that have a positive spin (even at the lower levels), and by using various methods to achieve consistency, e.g. training those distributing the ratings/incorporating peer reviews into the process.
Further Reading
OPM - Performance Management Cycle
References[1] M Armstrong and A Baron, Performance Management: The New Realities (CIPD, 1998).
[2] A Cave and C Thomas, The Reward Portfolio (The Training Directory, 1998).
[3] D Torrington and L Hall, Personnel Management: Human Resource Management in Action (Prentice Hall, 1995).
