Human talent performance management

Abstract

Organizations are challenged today with new management techniques and new ways of doing business. Therefore a series of new business models are used searching for business effectiveness and high business performance. All models are performed by people and managers are faced with new conditions, such as flexible work arrangements, home office agreements, virtual teams, multicultural teams, multinational teams and others, that make obsolete the traditional human resources theories. The principles of a Human Talent Performance Management Model (HTPMM) will be presented and the discussion will be focused on Lessons Learned compiled after 5 years of using the model. The model is aligned with Project Management Institute (PMI®) Standards (A Guide to the Project Management Body of Knowledge (PMBOK^® Guide), Organizational Project Management Maturity Model (OPM3^®) Program Management). It is concluded that the model is a useful tool to help managers and the organizations to achieve expected results if the model is implemented as a system within a bigger Performance Management system and if it is connected to other management and strategic planning, budgeting, employee development, compensation and quality improvement systems. Several benefits can be supported by the Model such as financial goals achievement, skills development, customer satisfaction, process quality, etc. The deployment of a HTPMM requires continued efforts, investment and other requirements will be discussed. A Human Resource Performance Management Model are presented and discussed. Emphasis is placed on the lessons learned and the conclusions regarding the organizational benefits, requirements and challenges. Final remarks are made on the role of the Project Manager as Performance Management Manager.

Introduction

Modern organizations deal with operations where continuous Human Performance Management processes must be in place to achieve high performance goals. In the Project Management arena, the human resource performance management is also an issue that Project Managers must address in order to obtain from people their best results. Studies have shown that the organizations that design and implement performance management systems obtain financial and non financial benefits. Performance Management Systems support Project Managers in today's global environment where geographically distributed teams are working virtually with very low face to face supervision.

Bacal (1999) defines Performance Management as “an ongoing communication process, undertaken in partnership, between an employee and his or her immediate supervisor that involves establishing clear expectations and understanding about: the essential job functions the employee is expected to do, how the employee's job contributes to the goals of the organization, what “doing the job well” means in concrete terms, how employee and supervisor will work together to sustain, improve, or build on existing employee performance, how job performance will be measured and identifying barriers to performance and removing them”. This definition has been applied to a PM environment and a 5 year experience has been collected into a Lessons Learned model in this paper. The objectives are to describe the lessons learned based on a Human Resource Performance Management Model to facilitate implementation of the model in projectized organizations. Benefits and requirements are also discussed.

The Performance Management Cycle

Some performance management approaches have being published (Fisher, 1997; Grote, 1996; Guinn, 1997; Haynes, 1990; Moglia, and others). In general, all reviewed authors present Performance Management as a cycle inserted within other systems. In a projectized organization, Performance Management should include two phases: (1) year performance management and (2) project assignment performance management. Both process are related and linked one to each other. In this paper the year end performance management cycle is utilized as a model, adding the calendar project assignment step to account for Project Performance Management. The model includes the following steps:

1. Understand business goals
   This is only achievable when the organization has business goals, they are approved, written and communicated effectively to all levels of the organization and the year by year goals and targets must be understood but all employees.
2. Establish individual goals
   Individual goals must be aligned to the organizational goals. Many authors share the concept of SMART objectives meaning that they must comply with the following characteristics: Stretch, Measurable, Achievable, Results oriented and Time bound.
3. Identify key skills required
   Employees must identify critical skills required to accomplish his goals and a skill development plan should be in place through a series of activities that will drive their skill development.
4. Assignment Performance Management
   Calendar management and work assignments are the most important management activity in projectized organizations (i.e. professional services firm). The person making the assignment decisions manages the firm and activity assignment strongly influences the direction and success of the firm. Correct resource assignment influences also: the cost of the work, its quality, and delivery time, professional development, client satisfaction, employee motivation and productivity and knowledge management through the firm (Maister). Assignments must be made considering customer service and needs, skill development requirements, motivation and morale. Calendar management must be integrated with other systems such as recruiting, training and development, compensation and promotions.

A Project Performance Management has been adapted from Wheatly (2004) in which the following steps could be considered:

1. Define the benefits that each project should produce
2. Define the metrics to control the achievement of those benefits
3. Collect data and evaluate if results are as expected
4. Control expenses when those benefits are not being achieved and evaluate the back on track strategy
5. Consider resource reassignment
6. Evaluate individual performance and its contribution to the results
7. Integrate the project performance with year performance

• 5.     Feedback and coaching
  Once the expected performance is established and activities are being performed, periodical feedback and coaching to employees should be scheduled and conducted. During these sessions, planned periodical reviews are made with employee's participation (Davis, 1995).
• 6.     Evaluate performance
  Performance is evaluated at the end of the cycle (generally on a yearly basis) and all possible performance elements are considered. Performance is to be evaluated against planned objectives. The assignment performances are also included and added to the final result.
• 7.     Reward performance
  High performance employees are identified and rewarded. At the same low performers are identified and corrective actions should be taken (Wilson, 1994).

Lessons Learned

The experiential application of the above cycle steps have raised the following lessons learned for each part of the cycle.

Understand Business Goals

1. Plan and execute the communication of the strategies through working sessions, preferably through FACE to FACE meetings.
2. Verify that 100% of team members understand and share the strategies
3. Verify that personal objectives are aligned with organizational objectives

Establish Individual Objetives

1. Validate that the employee understands the impact of his objectives in his professional career path
2. Document the acceptance of the objectives
3. The objectives must be assigned at the beginning of the annual business cycle and reviewed periodically for progress and change management.
4. It is the manager responsibility that the employee understands and accepts his objectives and that they are reviewed periodically during the cycle
5. Changes should be approved through a formal process

Key Skill Development

1. Assign a training and development budget.
2. Develop an annual activity plan for common activities among employees
3. Allow time for individual development activities
4. Use the plan as an aid in motivation and retention
5. It is a permanent and continuous effort
6. e- learning takes importance

Project Assignment and Performance Management

1. Intelligent decisions making regarding the assignment may influence future possibilities to win new business and obtain references.
2. Skills are developed through assignments and new challenge and new responsibilities exposure.
3. The quality and quantity of new skills are significantly influenced by assignments.
4. Therefore the assignment system must provide for opportunities to develop experience and the desired skills.
5. Retention issues can rise when assignments vs individual goals are not considered. Other firms are always hunting for skilled talents.
6. Some variables to be considered are: customer preferences, importance of the assignment, skill levels, availability, previous assignments history, future development needs and cost.

Feedback and Coaching

1. Develop the discipline
2. Assign time and space
3. Be rigorous regarding the panned goals
4. Develop manager's and employee progressive maturity through working sessions and supervised experiences.
5. Planned the feedback and coaching sessions ahead
6. Be aware of cultural differences
7. Avoid the “I don't have time” excuse

Performance Evaluation

1. Allow the employee to prepare himself appropriately for the evaluation session
2. The manager must be well prepared with objective and direct information regarding the employee performance
3. Conduct the evaluations in an appropriate environment
4. Focus on the problem, not the person
5. Avoid falling in the “activity trap”
6. Avoid the halo effect

Performance Rewards

1. If the appropriate systems are in place, the system may be perceived as fair
2. Employees must be active in the process
3. Expectations must be clear since the beginning of the year cycle
4. Planned awards must have budget support
5. The reward system should reward high performers and specific actions should be taken with low performers.

In general, the authors agree with De Wal (2002) that it is critical to use a scorecard model using alignment methodologies and Critical Success Factors (CSF) and Key Performance Indexes (KPI) to monitor performance and create an objective environment for planning, evaluation and rewarding.

Organization Expectation and Benefits

Organizations and employees work more effectively when the goals and objectives (organization and individual) are linked, clear and understood.. When people in the organization understand how their work contributes to the success of the company, morale and productivity usually improve. Gubman (1998) reported a series of benefits when comparing Organizations with Structured or an Unstructured Performance Management System and found that organizations with structured performance management systems had the better financial indicators (shareholder return, return on equity, return on assets, etc). In the same study, the average changes in financial ratios, before and after implementing a structured performance management system, provides evidence in favour of implementing a structured performance management system.

Performance Management processes allows the organization to support the planning, control and monitoring of the organization operations and projects and their results, assure the control and identification of deviations, facilitates the decision making process, supports the implementation of a high performance culture, supports calendar management, facilitates the professional development, increasing motivation, productivity and the success possibilities.

In another study, Gudman reported that personnel managers, from organizations with a process to structurally and continuously measure the performance of managers and employees, graded the effectiveness of the performance management system positively especially in the achievement of financial targets, development of skills and competencies, and improved customer care and process quality. The majority of the people polled believed it was well worth the effort and expense to install a performance management system.

Performance Management supports motivation programs by establishing clear goals, empowering people and establishing a clear set of rules for development, decision making, results accountability and rewarding high performers timely. Managers are benefited from reducing the need for micromanagement, saving time in decision making by helping employees make decisions on their own by ensuring they have the necessary knowledge and understanding to make decisions properly, reduce accountability conflicts, getting the required information as required, reducing mistakes and errors.

To summarize, “performance management is an investment up front so that you can just let your employees do their jobs. They'll know what they're expected to do, what decisions they can make on their own, how well they have to do their jobs, and when you need to be involved. This will allow you to attend to tasks that only you can address. That saves time.” (Bacal, 1999).

With a performance management system in place, employees understand better their work and responsibilities. If they know their responsibilities, they can act freely between its limits and be more productive. As proposed by several authors, the best results are obtain when Performance Management is part and is linked to other management systems. In the project management arena the Project Performance Management must be supported by Portfolio

Management, Program Management, Project Management, Human Resource Management and Scorecard techniques (CFS, KPI, BSC) to support the achievement of the expected results.

Performance Management System implementation may provide important organizational results, however it requires:

1. Continuous effort and investment in training, methodology, induction, change management.
2. Organizational Maturity to establish metrics and to manage processes
3. Project Manager's active participation
4. Knowledge and experience in processes, techniques and tools used in Performance Management
5. Program and Project Management tools and techniques must be in place to support Performance Management.
6. Institutionalized processes for feedback, coaching and pay for performance to support the long term support to the Performance Management philosophy.