Redefining Performance Management

For years, students in Kenya have sat for the Kenya Certificate of Primary Education (KCPE) exams prior to graduating from primary schools and Kenya Certificate of Secondary Education (KCSE) exams prior to graduating from secondary school. The highlight of these major exams is the performance ranking published by all major media houses in the country.

A bill that is set to be tabled at the National Assembly is seeking to change this. The bill proposes the replacement of KCPE and KCSE with annual assessments which will cumulatively be used to gauge the talents and capabilities of the students. Experts have come out in support of the proposed system by stating that it will promote learning and help the individual develop his or her talents. Those who are against the proposed system opine that competition is healthy hence the old performance ranking system should be maintained. The most important lesson organizational leaders can glean from this debate is that performance management needs to be evaluated and re-designed if necessary.

Performance management is more than a ‘box ticking’ exercise

In my experience as an HR practitioner, I have watched with utter dismay as employees and employers reduced performance management to a ‘box ticking’ exercise. There is a lot of negativity that is associated with performance ranking and by extension, any form of performance management.  Most employees consider performance reviews an exercise in futility. Performance management systems bring out the competitive human nature; a trait that may manifest in different ways. Some employees are quite competitive hence performance reviews will leave them bragging for days.

Most employees want to perform well hence a low-performance rating is a dent to their self-confidence. It is for this reason that human resource managers find themselves dealing with uncooperative employees whenever they carry out performance reviews. On the other hand, employers are divided on the importance of performance management. Some, based on their observations, argue that performance management encourages self-promotion and narcissism; traits that are poisonous to the organizational culture. Others contend that performance management is crucial to the decision-making process because it helps leaders make important decisions on talent.

 

Is there hope for performance management amidst such challenges?

What can organizations do to change performance management from a ‘box ticking’ exercise to a system that helps them measure individual performance and maximize productivity? Performance management systems often fail as a result of poor design and flawed implementation. Addressing the negative attitudes towards performance management needs to begin with an honest assessment of an organization’s performance management system. It is important to ask the following questions:

  1.    Is the organization’s performance system beneficial?
  2.    What is good performance according to the system in place?
  3.    What is bad performance according to the performance management system?
  4.    Is there a feedback mechanism that encourages good performance and addresses the issues that lead to bad performance?

 

Aspects of performance management

With this in mind, an organization can create a more effective performance management system by following these steps:

  1.    Performance planning

Performance planning sets a platform for the communication of objectives to employees and the development of actionable points that will guide the employees towards the attainment of the set goals. Performance planning works best as a collaborative effort between managers and the employees. The performance planning document should be used to monitor the progress made towards the attainment of the set goals. The monitoring exercises should be used as a basis for the re-alignment of goals in line with the changing business environment. Performance planning and continuous feedback foster continuous improvement of the employees.

  1.    Improve the information gathering process

Performance-related information should be gathered from a number of sources. For instance, during the evaluation of the performance of a sales executive, the HR department should consider the following: sales reports, past appraisals and observations from immediate supervisors. This will eliminate subjectivity and provide a more wholesome perspective on the performance of the employee.

  1.    Embrace technology

The digital wave is here to stay. Organizations are gradually coming to the realization that they must adapt to new technologies and innovations or become obsolete. Managers need to embrace performance management systems which will streamline performance tracking and administration. The use of technological tools helps managers create effective talent management strategies and engage employees in the process of their development.

What is the greatest challenge your organization has encountered in performance management? Get in touch with us today: Tel: +254 706 419 111.  Email: info@virtualhr.co.ke

Winning The War for Talent

The recently concluded Global Entrepreneurship Summit in Nairobi erases any doubt about the potential Kenya has of becoming an economic power house. Kenya is among the many African countries that offer numerous investment opportunities in the following sectors: agriculture, mining, technology and the oil and gas industry. Local and international organizations in Kenya and in Africa are currently operating in an environment that is characterized by fierce competition for talent. Fast growing companies find themselves grappling with a dearth of talented individuals who can fill senior management and technical positions.

In the 70s and 80s, employees would start out at one company and retire while still working at the same company. In the current business environment, talent is mobile. Organizations have to work towards recruiting, training and retaining their talent. The public sector, which was known to retain talent for years in the past, has had to compete for top talent with the private sector. Organizations in Kenya and across the globe are fast coming to the realization that talent management is an indispensable element in the survival and success of every organization.

Companies seeking to shift from an ad hoc approach towards talent management to a strategic talent management, needs to recognize that it is easy to overlook talent and eventually lose it to the competition. Organizations treat talent as an afterthought for the following reasons: Most organizations are continuously growing in line with the demands of the market. In the process of seeking new markets, launching new products or services, the organization’s efforts are directed towards capitalizing on business opportunities. In other instances, the management does not understand the association between talent management and organizational performance.

An organization seeking to avoid the pitfalls of poor talent management needs to consider the following elements:

Talent training and development

Organizations need to train and develop their own talent. There is a need to recognize that skilled workers are not robots. They are career oriented hence they need opportunities that will allow them to advance in their careers. Skilled employees need to be given the opportunity to innovate. LinkedIn has a program known as “Incubator” which allows employees to develop a project alongside a team and present it to the executive staff. Incubator has resulted in the development of innovative solutions such as “go book”, a meeting scheduling tool that is currently used by the team internally. Executive education programs can also help organizations retain their top talent. Research has shown that executive programs slow down the turnover rates because they provide talented workers with an opportunity to grow. Executive education programs are a demonstration of a company’s commitment to the long term development of their employees.

Strategic alignment

An organization that is keen on sustainable growth must align its business objectives with its talent management plan. Fast-growing organizations can be categorized into two: those who mask their poor talent management plans with their growth and those who have realized that talent management is crucial to the organization’s growth. The latter is more desirable than the former. To move from the former category to the latter category, organizations need to answer the following questions:

  • Is the growth of the organization overshadowing critical human resources challenges?
  • Does the organization have the tools to anticipate and develop the required talent?
  • Should the organization be doing more to link its strategic objectives to its talent management plans?

The answers to these questions may not be obvious, even to the human resource department in your organization. At Virtual HR, we have tailored solutions that will help your organization:

  • Identify talent in your organization
  • Develop measures for retaining talent
  • Develop a winning talent strategy
  • Develop talent metrics

Why HR Outsourcing Adds Value to an Organization

Outsourcing is as old as organized political and economic systems. Specific personnel were often contracted by the government to collect taxes in the ancient Roman Empire. During the Industrial revolution, rapid technological advances resulted in increased production. This advancement led to a shift from horizontal partnerships to complex, vertical relationships that were geared towards the attainment of the organization’s goals.

Human resource outsourcing entails the delegation of one or more human resource service(s) to an external provider, who owns, manages and administers the delivery of the services based on pre-determined performance metrics.  Outsourcing of human resource function(s) has become a common phenomenon globally. Organizations, regardless of their size, find themselves having to replace, supplement or broaden their operations by outsourcing aspect(s) of their HR functions.  Just like with every other business decision, the decision to outsource the human resource functions cannot be made without considering the contextual factors. The organization must consider the economic, social and legal landscape it operates in.

The strategic objectives and financial plans of the organization define the scope and direction an organization desires to take. This makes every outsourcing decision unique.  Some firms we have worked with in the past have contracted us to do psychometric testing or training. Others have outsourced their entire HR function to our organization. In spite the fact that making the decision to outsource HR functions is multifaceted and complex, organizations ought to embrace HR outsourcing for the following reasons:

 

1. Cost effectiveness

The current business environment is cost conscious and competitive.  The rapid changes in the external operating environment are making it necessary for organization to adapt fast. With the increased focus on profitability, organizations find themselves subjecting their   departments to cost reduction measures. HR demands oversight, innovation and resources but it does not directly give returns. Outsourcing human resources function (s) helps the organization focus on the core competencies. By outsourcing HR functions, the size of some of the HR functions can be reduced.  Innovative solutions can be implemented resulting in a reduction of the cost of executing these functions. The innovative solutions puts an organization in a better position to maintain a competitive edge. HR specialists that would otherwise be out of an organization’s reach due to the cost of hiring them can benefit the organization with their skills and expertise as external HR experts.

 

2. Enhances legal  compliance

Organizations grow over time hence the need for mergers, acquisitions and expansion. In light of this, organizations need structures and HR processes that are capable of blending of corporate cultures, handling layoffs and consolidation of employees. Outsourcing HR functions would appeal to an organization during a merger or an acquisition because specialized personnel would be superfluous after the completion of the project. Organizations must also comply with various legislations and regulations.

An external HR expert provides guidance that  enables an organization to set policies and procedures on health care, overtime compensation, pension reform and benefits eligibility. While this can be carried out by internal HR departments, keeping up with the regulations is demanding.  It may call for an increase in the number of personnel working in the HR department as well as the resources devoted to the department. An organization is better off hiring a subject matter expert to handle matters of compliance.

 

3. Implementation of  HR tech

Improvement of the quality of HR services calls for improvement of the systems as well as training of employees and managers. ICT solutions in HR assist in enhancing the quality of the employee-management relations.  ICT solutions ease HR functions such as leave-planning, appraisals, evaluations and health care insurance. Once an organization has a system in place, regular updates need to be done in line with the trends in the business environment. Some systems are only useful for a given period while others are embedded into the daily functions of the HR department. An external HR   expert can significantly reduce the financial burden associated with introducing new technological   solutions into an organization. HR tech solutions such as virtual workforce leadership and virtual analytics can be carried out for the benefit of an organization by an external HR expert.