What is performance management?

• It is a process that facilitates the execution and implementation of a company’s strategic goals.
• It translates the strategic plans into objectives and performance measures for all levels of the organization.
• It ensures that everyone is working on the right things to drive success for the organization and increase individual and team achievement.

What must the organization have in place in order to realize positive results when implementing performance management?

• Performance objectives, metrics, standards and goals that are defined and monitored on an ongoing basis.
• Managers who are trained to be effective in performance planning, coaching, feedback, counseling and performance improvement.
• The reward systems of the company that are aligned with a pay-for-performance foundation.
• Managers and employees who are actively involved in helping to establish performance measurements and goals assuring their buy-in and support.

All of these elements are essential to shift an organization to a performance-based culture.

What results have been realized by other companies that have implemented performance management?

The benefits to the organization and its employees of having a successful “system” are significant, as described by DDI (Development Dimensions International) in a series of studies entitled “Performance Management: Impacts and Trends”:

• "Performance management systems directly influence five critical organizational outcomes: financial performance, productivity, product or service quality, customer satisfaction, and employee job satisfaction.”
• "Companies with performance management programs have higher profits, better cash flows, and stronger stock market performance than companies without performance management.”

Implementing the “System” seems like a major undertaking. Does a company have to implement all of the components at one time?

• No. Many companies may already have a number of components in place that are working well, and/or they may not consider certain components a priority. This is normal. The ODI “System” is divided into modules, and clients are able to determine which one(s) they want to choose and what departments would be involved.