PERFORMANCE MANAGEMENT – BEST
PRACTICE PROCESS AND PRINCIPLES
CHARLES COTTER
HACKLE BROOKE
5-7 APRIL 2017
www.slideshare.net/CharlesCotter

3-DAY, TRAINING PROGRAMME
OVERVIEW
• Fundamentals of Performance Management
• Building a Balanced Scorecard – objectives, measures and targets
• Performance Management cycle/process
• Managing poor performance
• Incapacity Procedure (Poor Performance) - LRA
• Best practice guidelines for performance counseling
• Performance-based coaching – principles and process
• Case Study: Dealing with Poor Performance

INTRODUCTORY ACTIVITY
• Individual activity:
 Complete the following statement by inserting one word only. As
a manager, in order to effectively manage employee performance,
I need to/to be………………………………………………………
 Jot this word down and find other learners who have written
down the same word.
 Write this word down on the flip-chart.
 You’ll be given the opportunity to substantiate your choice of
word.

DEFINING THE FUNDAMENTAL, PERFORMANCE
MANAGEMENT CONCEPTS
• Performance Management
• Key Performance Areas (KPA’s)
• Key Performance Indicators (KPI’s)
• (Applied) Competency
• The Balanced Scorecard (BSC)

DEFINING PERFORMANCE
MANAGEMENT (PM)
• PM can be seen as a comprehensive management system aimed at constantly
improving and monitoring the performance of others.
• PM concerns itself with improving productivity, delivering a better quality
service/product and is aimed at achieving the goals of both the institution and the
employee.
• PM is a strategic and integrated approach to delivering sustained success to
organizations by improving the performance of people who work in them and by
developing the capabilities of teams and individual contributors.
• PM entails three (3) important components/dimensions, namely:
 Evaluation (i.e. appraisal and measurement)
 Development (i.e. improving performance through the acquisition of skills)
 Relationships (between team leaders and team members)

KPA’s and KPI’s
• Key Performance Areas (KPA) may be defined as the primary
responsibilities of an individual or the core area(s) which each
employee is accountable.
• KPA’s originate from the organization’s mission and represent the
specific areas where the organization expects results.
• Key Performance Indicators (KPI’s) define unit of measure used to
assess whether or not Key Performance Area have been achieved.
• KPI’s clarify how performance will be judged against each KPA.
They provide the framework for generating targets, and are the
core of all performance management systems.

SUB-COMPONENTS OF COMPETENCE

COMPETENCE
• “Applied Competence is the union of practical, foundational and reflexive
competence”
• Practical Competence - the demonstrated ability to perform a set of tasks in an
authentic context. A range of actions or possibilities is considered and decisions
are made about which actions to follow and to perform the chosen action.
• Foundational Competence - the demonstrated understanding of what the learner
is doing and why. This underpins the practical competence and therefore the
actions taken.
• Reflexive Competence - the learner demonstrates the ability to integrate or
connect performance with understanding so as to show that s/he is able to adapt
to changed circumstances appropriately and responsibly, and to explain the reason
behind an action.
• Thus competence is understood as including the individual’s learning,
understanding and ability to transfer and apply learned skills and knowledge
across a wide range of work contexts.

BALANCED SCORECARD
• The Balanced Scorecard (BSC) is a strategy performance
management tool - a semi-standard structured report,
supported by design methods and automation tools that
can be used by managers to keep track of the execution of
activities by the staff within their control and to monitor
the consequences arising from these actions.
• The critical characteristics that define a Balanced Scorecard
are:
Its focus on the strategic agenda of the organization concerned
The selection of a small number of data items to monitor
A mix of financial and non-financial data items

BSC MEASURES

• The balanced scorecard suggests that we view
the organization from four (4) perspectives, and
to develop metrics, collect data and analyze it
relative to each of these perspectives:
Learning, Innovation and Growth
Business (Internal) Processes
Customer
Financial
BSC PERSPECTIVES/DIMENSIONS

ILLUSTRATION: BSC
PERSPECTIVES/DIMENSIONS

• Strategic question:
 “To achieve our vision, how will sustain our ability to change and improve?”
• Examples (measurable indicators):
 Time to develop new generation of products
 Life cycle to product maturity
 Time to market versus competition
 Is there the correct level of expertise for the job?
 Employee turnover
 Job satisfaction
 Training/Learning opportunities
• Value Outcome:
 Organizational knowledge and growth capacity
LEARNING, INNOVATION AND
GROWTH PERSPECTIVE

• Strategic question:
 “To satisfy our shareholders and customers, what business processes must we excel at?”
• Examples (measurable indicators):
 Cycle time
 Unit cost
 Yield
 New product introductions
 Number of activities per function
 Duplicate activities across functions
 Process alignment (is the right process in the right department?)
 Process bottlenecks
 Process automation
• Value Outcome:
 Efficiency
BUSINESS (INTERNAL) PROCESS
PERSPECTIVE

• Strategic question:
 “To achieve our vision, how should we appear to our customers?”
• Examples (measurable indicators):
 Percent of sales from new products
 On time delivery
 Share of important customers’ purchases
 Ranking by important customers
 Delivery performance to customer
 Quality performance for customer
 Customer satisfaction rate
 Customer percentage of market
 Customer retention rate
• Value Outcome:
 Customer satisfaction
CUSTOMER PERSPECTIVE

• Strategic question:
 “To succeed financially, how should we appear to our shareholders?”
• Examples (measurable indicators):
 Cash flow
 Sales growth
 Operating income
 Return on Equity (RoE)
 Return On Investment (ROI)
 Return on Capital Employed (RoCE)
 Financial Results (Quarterly/Yearly)
• Value Outcome:
 Financial performance/profitability
FINANCIAL PERSPECTIVE

• Articulate the business's vision and strategy
• Identify the performance categories that best link the business's vision and
strategy to its results (e.g., financial performance, operations, innovation,
employee performance)
• Establish objectives that support the business's vision and strategy
• Develop effective measures and meaningful standards, establishing both short-
term milestones and long-term targets
• Ensure company-wide acceptance (ownership) of the measures
• Create appropriate budgeting, tracking, communication, and reward systems
• Collect and analyze performance data and compare actual results with desired
performance
• Take action to close unfavourable gaps
PURPOSES OF THE BSC

ILLUSTRATION: HIERARCHY OF BALANCED
SCORECARD COMPONENTS

THE 9-STEP BSC BUILDING AND
IMPLEMENTING PROCESS

• The strategic elements developed in Steps one
and two are decomposed into Strategic
Objectives, which are the basic building blocks of
strategy and define the organization's strategic
intent.
• Metrics must also be aligned with the company's
strategic plan.
• The metrics set up also must be S-M-A-R-T
STEP 3: OBJECTIVES - STRATEGY
ACTION COMPONENTS

S-M-A-R-T OBJECTIVES

• Leading and lagging measures are identified
Lagging indicators are typically “output” oriented, easy to
measure but hard to improve or influence
Leading indicators are typically input oriented, hard to
measure and easy to influence
• Expected targets and thresholds are established
• Baseline and benchmarking data is developed
• Key Performance Indicator (KPI) and Performance
Measure Development
STEP 5: PERFORMANCE MEASURES -
MEASURES AND TARGETS

• Provide a way to see if our strategy is working
• Focus employees' attention on what matters most to success
• Allow measurement of accomplishments, not just of the work that is
performed
• Provide a common language for communication
• Are explicitly defined in terms of owner, unit of measure, collection
frequency, data quality, expected value (targets), and thresholds
• Are valid, to ensure measurement of the right things
• Are verifiable, to ensure data collection accuracy
GOOD PERFORMANCE MEASURES

5 STEPS TO FIND THE RIGHT
MEASURES

DEVELOPING KEY PERFORMANCE
INDICATORS
• Developing KPI’s is a straightforward process.
• Simply translate KPA’s into measurable values.
• The values may be numerical or qualitative.
• Refer to examples of KPI’s, as set out in tables
1-3

PERFORMANCE TARGETS

PERFORMANCE TARGETS
• Target setting is the key ingredient to success.
• Without target setting, huge amounts of energy can be lost,
unharnessed, unused. By working consistently toward the
attainment of certain clearly defined, specific targets, energy can
be tightly focused and the results astounding.
• Targets are set to steer the organization/team/individual during the
short-term.
• Targets are needed to drive performance and to measure
performance; to improve performance and to control performance.
• Refer to the standards for target setting (page 26)

LEARNING ACTIVITY 1
• Group discussion
• Apply the Balanced Scorecard terminology and approach
to a defined organizational context. Develop the
following:
Objectives
Measures
Targets
• Provide feedback in the form of summary

PERFORMANCE MANAGEMENT (PM)
• Defining the fundamental concepts
• The need for PM
• Best Practice Criteria: Performance
Management
• The Performance Management process

• Refer to pages 29-30 in Learner Guide
• Critically evaluate your organization’s current
Performance Management processes and
systems against the best practice criteria.
• Identify gaps and recommend improvement
strategies.
DIAGNOSTIC LEARNING ACTIVITY

STEP 1: PERFORMANCE
MANAGEMENT CYCLE

STEP 1: PERFORMANCE PLANNING
• Clarifying expectations
• Setting of goal/objectives, performance
standards and criteria
• Action Planning
• Contracting Performance Agreements

Accenture
Microsoft
Adobe
Deloitte
Medtronic
Gap
General Electric
• To date nearly 10% of Fortune 500 companies have
abolished their annual ratings, according to Cliff
Stevenson, a senior research analyst for the Institute for
Corporate Productivity, a research network that studies
management practices.
WHAT DO FOLLOWING COMPANIES HAVE
IN COMMON?

PERFORMANCE REVIEW/APPRAISAL
• Monitoring, Measuring/Evaluating performance
against the pre-determined performance
goals/objectives and standards and criteria.

PERFORMANCE FEEDBACK/INTERVIEW
• Conducting of the 8 step, Human Touch
interview/discussion – formally/informally and
implementing Positive and Corrective performance
feedback.

8-STEP HUMAN TOUCH
PERFORMANCE INTERVIEW
• Step 1: Control the environment
• Step 2: State the purpose of the discussion
• Step 3: Ask for the employee’s opinion
• Step 4: Present your assessment
• Step 5: Build on employee’s strengths
• Step 6: Ask for employee’s reaction to your assessment
• Step 7: Set specific goals
• Step 8: Close the discussion

PERFORMANCE DEVELOPMENT
Implementing training and development and other
people performance improvement initiatives
The adoption of the 5 pivotal roles of people
development-focused managers (people
capitalism).

PERFORMANCE REWARD
• Offering of host of customized and personalized
intrinsic and extrinsic performance reward options
and recognition. Ensure compliance with best
practice principles

LEARNING ACTIVITY 2
• Group discussion
Review the efficiency and effectiveness of the current
performance management process in your
organization. Identify gaps and recommend
improvement strategies.
Also discuss the key managerial actions in the 5-stage,
performance management cycle.
• Provide feedback in the form of summary

PERFORMANCE EQUATION

CAUSES OF POOR PERFORMANCE
Personal problems
Skills/competence
Lack of resources
Organizational factors

CAUSES OF POOR PERFORMANCE
• Refer to the reading article, “7 Causes of Poor
Employee Performance - And How to Address
Them” (Bernard Marr) on pages 42-44

PERFORMANCE MATRIX

LEARNING ACTIVITY 3
• Group discussion
Identify the most common causes of poor
performance in your organization. Develop pro-
active strategies to prevent poor performance.
Apply performance management principles to the
four (4) quadrants of the Performance Matrix.
• Provide feedback in the form of summary

PERFORMANCE COUNSELING
• Defining performance counseling
• The purpose of performance counseling
• The benefits of performance counseling
• The characteristics of effective performance
counseling
• Characteristics of effective performance counselors
• Performance counseling process

THE CHARACTERISTICS OF EFFECTIVE
PERFORMANCE COUNSELING
• Purpose
• Flexibility
• Respect
• Communication
• Support

CHARACTERISTICS OF EFFECTIVE
PERFORMANCE COUNSELORS
• Shows compassion
• Listens attentively and actively
• Honest and Trustworthy
• Knowledgeable – content and process
• Patient
• Knows their limits and restrictions
• Knows when and where to refer employees e.g.
Employee wellness and/or Assistance programmes
• Emotionally intelligent
• Impartial and objective
• Professional
• Positive attitude and outlook

LEARNING ACTIVITY 4
• Group discussion
By referring to the purpose and value/benefits of
performance counseling, build a business case for the
value and impact thereof.
By referring to the characteristics of performance
counseling/counselor, develop a profile of an effective
performance counselor in your working environment.
• Provide feedback in the form of summary

PERFORMANCE COUNSELING
PROCESS
• Preparing for a Performance Counseling session
• Conducting a Performance Counseling session
(Interview)
• Performance Improvement Action Plan
• Monitor, review and evaluate the effectiveness
of the Performance Improvement Action Plan

PREPARING FOR A PERFORMANCE
COUNSELING SESSION
• Review the performance standards, job
description and operating manuals
• Consultation and engagement
• Start building a business case for employee poor
performance
• Schedule and notify the employee of the
counselling session

LEARNING ACTIVITY 5
• Group discussion
As part of your preparation for a performance
counseling session, develop a comprehensive checklist
to ensure that you are adequate prepared.
By referring to this preparation check-list, identify
some of the common preparatory
challenges/constraints in your organization. For each
of these challenges, develop remediation strategies.
• Provide feedback in the form of summary

CONDUCTING A PERFORMANCE COUNSELING
SESSION (INTERVIEW)

CONDUCTING A PERFORMANCE COUNSELING
SESSION (INTERVIEW)
• Directing, managing and controlling the interview
(Process)
• Jointly create and sign an FOSA agreement:
Facts
Objectives
Solutions
Actions
• Topics (Content) to include in a counseling session
• Post counselling actions

CONSTRUCTIVE FEEDBACK (B-E-E-R
TECHNIQUE)
• BEHAVIOUR
• EFFECT
• EXPECTATION
• RESULT

LEARNING ACTIVITY 6
• Group discussion
• By referring to the process as well as the content,
develop a set of best practice principles for conducting
an effective performance counseling interview/session.
Process
Content
• Provide feedback in the form of summary

PERFORMANCE IMPROVEMENT
ACTION PLAN
• Defining a Performance Improvement Plan
• The value of developing a Performance
Improvement Plan
• Refer to the six items that a supervisor should
review with the employee when using the
document
• Refer to the PIP template (pages 62-63)

MONITOR, REVIEW AND EVALUATE THE EFFECTIVENESS OF THE
PERFORMANCE IMPROVEMENT ACTION PLAN
• After the session and throughout a sufficient time
period, managers should evaluate the worker's
progress to ensure the problem has been solved.
• Managers need to decide on the following:
M&E tools and techniques
Frequency of review
Disciplinary actions as a result of continuance of poor
performance
Reward actions when performance improvement occurs

LEARNING ACTIVITY 7
• Role Play:
Pair up with a learning partner and conduct a 15-minute
role play scenario in which one learner plays the role of a
supervisor and the other learner a poor performing
subordinate. Record the performance improvement
agreement by using the provided PIP template.
Conduct a de-briefing session after the role play to
determine the efficiency and effectiveness of the
counseling process.
Discuss the monitoring and evaluation tools that managers
could use to periodically review employee performance
improvement/s.

INCAPACITY PROCEDURE
• Differentiate between misconduct and poor
performance – relevant examples
• Schedule 8: Code of Good Practice (LRA):
Fair reasons for dismissal
Disciplinary measures short of dismissal
Incapacity: Poor work performance

INCAPACITY PROCEDURE: POOR
PERFORMANCE
• Given the employee appropriate evaluation,
instruction, training, guidance or counseling and
• After a reasonable period of time for improvement,
the employee continues to perform unsatisfactorily
• Conducting an investigation
• The employee should have the right to be heard
and to be assisted by a trade union representative
or a fellow employee.

GUIDELINES IN CASES OF DISMISSAL
FOR POOR WORK PERFORMANCE
• Whether or not the employee failed to meet a performance
standard and
• If the employee did not meet a required performance standard
whether or not
• The employee was aware, or could reasonably be expected to
have been aware, of the required performance standard;
• The employee was given a fair opportunity to meet the required
performance standard; and
• Dismissal was an appropriate sanction for not meeting the
required performance standard

LEARNING ACTIVITY 8
• Group discussion:
By referring to Schedule 8 of the Code of Good
Practice: Dismissal as well as your organizational
policy and procedure, measure the current degree
of compliance when exercising and managing poor
performance.
Identify the areas of non-compliance and develop
remediation/improvement strategies for each of
these areas.

THE PURPOSE AND VALUE OF
COACHING
• Coaching often provides positive feedback about employee contributions.
• Regular coaching brings performance issues to an employee's attention
when they are minor, and assists the employee to correct them.
• The goal of coaching is to work with the employee to solve performance
problems and improve the work of the employee, the team, and the
department.
• Coaching offers the vehicle to accelerate employee development towards
the achievement of individual and organizational effectiveness.
• The core of coaching is building rapport, asking powerful questions and
setting goals.

DIFFERENTIATING BETWEEN
MENTORING AND COACHING (CIPD)
Mentoring Coaching
Ongoing relationship that can last for a long period of time Relationship generally has a set duration
Can be more informal and meetings can take place as and
when the mentee needs some advice, guidance or support
Generally more structured in nature and meetings are scheduled
on a regular basis
More long-term and takes a broader view of the person Short-term (sometimes time-bounded) and focused on specific
development areas/issues
Mentor is usually more experienced and qualified than the
‘mentee’. Often a senior person in the organization who can
pass on knowledge, experience and open doors to otherwise
out-of-reach opportunities
Coaching is generally not performed on the basis that the coach
needs to have direct experience of their client’s formal
occupational role, unless the coaching is specific and skills-
focused

DIFFERENTIATING BETWEEN
MENTORING AND COACHING (CIPD)
Mentoring Coaching
Focus is on career and personal development Focus is generally on development/issues at work
Agenda is set by the mentee, with the mentor providing
support and guidance to prepare them for future roles
The agenda is focused on achieving specific, immediate goals
Mentoring resolves more around developing the mentee
professional
Coaching revolves more around specific development
areas/issues

GUIDING PRINCIPLES OF EFFECTIVE
COACHING
• Strengthen communication between you and the
employee
• Help the employee attain performance objectives
• Increase employee motivation and commitment
• Maintain and increase the employee's self-esteem
• Provide support

BEST PRACTICE COACHING
BEHAVIOURS
• Focus on behaviour, not personality.
• Ask the employee for help in problem
identification and resolution. Use active listening
to show you understand.
• Set specific goals and maintain communication.
• Use reinforcement techniques to shape
behaviour.

ELEMENTS OF AN EFFECTIVE
COACHING SESSION

ELEMENTS OF AN EFFECTIVE
COACHING SESSION
• Coach when you want to focus attention on any specific aspect of the employee's
performance.
• Observe the employee's work and solicit feedback from others.
• When performance is successful, take the time to understand why.
• Advise the employee ahead of time on issues to be discussed.
• Discuss alternative solutions.
• Agree on action to be taken.
• Schedule follow-up meeting(s) to measure results.
• Recognize successes and improvements.
• Document key elements of coaching session.

STEPS OF THE SKILLS/TASK-ORIENTED
COACHING PROCESS
• Step 1: Needs/skills gap analysis
• Step 2: Task analysis and explanation of task
requirements
• Step 3: Demonstrating/Presenting the task
• Step 4: Trying out performance
• Step 5: Assessment of learner’s competence
• Step 6: Self Evaluation

STEPS OF A PERFORMANCE-BASED
COACHING SESSION (POSITIVE FEEDBACK)
• Describe the positive performance result or work habit using specific details.
• Solicit your employee's opinion of the same product or behaviour.
• Ask the employee to identify elements that contributed to success
• Discuss ways in which you and the employee can support continued positive
results.
• Reinforce for the employee the value of the work and how it fits in with the
mission, vision, values and goals of the work unit or department.
• Show your appreciation of the positive results and your confidence that the
employee will continue to perform satisfactorily.
• Document your discussion for the employee's file, as you would all coaching and
counseling sessions, noting day, date, time and key elements.

STEPS OF A PERFORMANCE-BASED COACHING
SESSION – CONDUCT AND CAPABILITY

STEPS OF A PERFORMANCE-BASED
COACHING SESSION (CONDUCT)
• Describe in detail the poor work habit observed
• Say why it concerns you. Tie it to the performance standards and
goals.
• Ask why it occurred and listen non-judgmentally to the
explanation. Describe the need for change and ask for ideas.
• Discuss each idea and offer your help
• Agree on specific actions to be taken and set a specific follow-up
date
• Document results from the session

STEPS OF A PERFORMANCE-BASED
COACHING SESSION (CAPABILITY)
• Describe the issue or problem, referring to specific behaviours
• Involve the employee in the problem-solving process
• Discuss causes of the problem
• Identify and write down possible solutions
• Decide on specific actions to be taken by each of you
• Agree on a follow-up date
• Document key elements of the session

LEARNING ACTIVITY 9
• Group discussion:
By referring to the best practice principles and
guidelines, describe how you can apply coaching
as a vehicle to performance improvement.

CASE STUDY ANALYSIS
• “Dealing with Poor Performance”
• Refer to pages 62-65
• Response to questions 1-5 (page 66)
• Provide feedback of answers

CASE STUDY: DEALING WITH POOR
PERFORMANCE
• Questions
• 1. Critically evaluate the proposed approach/procedure recommended by
Elaine, the HR Manager, to David in addressing Carol’s poor performance.
• 2. What are the likely causes of Carol’s poor performance? Differentiate
between capability and conduct-related causes. What is the actual cause of Carol’s
poor performance?
• 3. Critically evaluate the performance counselling session conducted by David.
• 4. What are the benefits of the approach adopted and applied by David in
managing Carol’s poor performance?
• 5. What post-counseling monitoring and evaluation measures has David
proposed? Do you believe that these are effective? Motivate your answer.

CONCLUSION
• Key points
• Summary
• Questions
• Certification

CONTACT DETAILS
• Charles Cotter
• (+27) 84 562 9446
• charlescot@polka.co.za
• LinkedIn
• Twitter: @Charles_Cotter
• http://www.slideshare.net/CharlesCotter