The knowledge age requires companies to rely more on their human capital than ever before. Discretionary effort (employee engagement) is today’s competitive advantage.


Establishing a performance management system is essential to build and retain an engaged workforce. Performance measurements communicate expectations. Measurements must be aligned with the company’s vision and values and reflect the essence of the job description.


Focusing on a few critical performance measures that draw a line to the company’s purpose provide meaningful goals. Annual goals should be stationary and achievable. These will not only direct the employees’ actions, but also focus the manager’s energy toward achievement and employees’ success.


The job description, job competencies and performance goals and objectives should mirror one another. This strategic alignment with the company brings clarity to the position’s purpose. Measuring goal achievement is far more objective than comparing one employee’s performance to another.


A recent study at the University of Southern California found performance appraisal systems are more effective when linked to financial rewards. Communicating the connection between compensation and performance is necessary and may become complicated by tenure and position. Managers can master the understanding and communicate the connection to further motivate employees.


Performance management is a daily process. Managers need to demonstrate desired behavior and initiate performance- focused communication on a regular basis. Continuous employee development is the key to retention of top talent and bottom- line success.


The annual performance appraisal is an individual’s recap of the performance management process. The document is a formal synopsis of the year’s efforts and gains. The ideal conversation between employee and manager is a celebration of achievements punctuated by increased compensation. It is an opportunity to review job functions and establish new goals.


The worst case scenario is the untrained or unconnected manager who may reveal his lack of knowledge about the employee’s job function or level of performance. Managers need to be held accountable to accurately assess individual performance and overall department performance. Training needs to be provided for this level of management to occur.


There are a number of performance appraisal tools and methods. The most important piece of performance management is the clarity of purpose and the alignment to the company’s vision and values. When performance goals are firmly based, the manager’s role as coach and leader is established.

Invest In Management Training

• Teach all managers the required skill sets to assess performance objectively.
• Assess standards of performance among managers as an adult learning exercise.
• Ensure all managers use terms to define levels of performance consistently.
• Incorporate objective metrics wherever feasible. (i.e. number of unscheduled absences)
• Provide periodic and specific training to promote a coaching climate.

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