The Performance Management challenge

Newsletter articles

1 Sep 2012

HR Insight Issue 15

Mary Mercer, IES Principal Consultant

Mary MercerIn the last year we have had a strong focus on performance management. Identified as an area of interest by our HR Network members, it is one of those areas which is so key to success and yet seems so difficult to get right. We continue to support individual organisations to develop performance management approaches. For example, we are currently working with Kingston University to develop an approach with the University’s “Led by Learning” strategy at its heart, but which also focuses on enabling appraisees and appraisers to have a quality conversation.

It is worth remembering that six years ago Michael West, at Aston University, identified the fundamental impact of good people management, and good performance management in particular. West examined the relationship between high performance HR management and healthcare outcomes in 52 hospitals across England. He focused on a ‘high performance bundle or system’ of HR practices and the effects that such systems had on patient mortality. After controlling for influential factors (such as the prior mortality rates at each hospital), the researchers found that the HR system variables accounted for almost eight per cent of the variance in mortality rates. They then looked at the contribution made by each of the individual elements of the HR system.

West’s analysis revealed that there were three individual HR practices that were the most influential: the presence of a sophisticated performance management system, employment security, and Investors in People status (which focuses on training and development practices and outcomes). Of these, performance management was the most important. Why then does performance management still have an image problem as a bit of an inconvenience and a paperwork exercise, when it has been shown to be so influential; even a matter of life or death?

We think that people focus on the paperwork and process, and not on the purpose and the skills necessary to carry out an effective performance review. IES’s recent research into performance management found, for example, that performance management was like an “overfull suitcase” with an unclear purpose and too many other processes (reward, recruitment, talent management, promotion, development and pay) tacked on rather randomly1. We also found a focus on the form and paperwork rather than the dialogue between appraiser and appraisee,with people feeling that getting the paperwork submitted was more important than the quality of the conversation. The bottom line is that those involved have lost sight of what it is all about.

To address this IES has been running two action learning sets (ALSs), one with a group of London Boroughs and one with a mix of private sector companies and central government departments. These sets have each focused on topics of interest concerning performance management, and over the course of six sessions we have explored issues such as the process, the culture, alignment with strategy, links to pay and reward, manager engagement and alternative approaches to delivery. Each partner in the ALS has discussed their own situation and ambitions for performance management and, most importantly, we have established strong groups with mutual ambition who plan to keep in touch and continue supporting each other as we strive to get performance management right.

We will be circulating key thoughts from our ALSs in the Autumn. If you are interested in joining an IES ALS on performance management or another topic, or want to talk to us about what IES can do for you in developing robust performance management, contact the IES team at