Not suprisingly, the research found that the most effective performance management initiatives:
Included goal setting as part of their annual planning process, thus making it a business process
Aligned and cascaded goals from the top of the organization
Were more likely to require development goals to be established
Were more likely to link pay to performance
Improved their capability to deliver results
Some of these you’ll find in every performance managment program, but I think that you’ll only see a few companies who cascade their goals throughout the organisation.
On the one hand, cascading is great. It ensures that everyone’s goals are aligned to the business, everyone knows how they contribute to the bigger picture and we feel like we are all moving together in the same direction.
On the other hand, I’ve looked after an online performance management system for a previous organisation which cascaded its goals and it was near impossible to get a yearly cycle happening. Much of the problem in hindsight was that it relied on the Senior Managers to get the ball rolling and cascade their goals down (and we know that having Senior Leaders champion this process is important). Additionally, this was a global company which meant that we were waiting for the goals to hit Australia for things to get moving and that was hard to predict. It sort of ended up a tick in the box process because of the timing, which is not the aim at all.
Overall though I can’t speak highly enough of online performance management systems. They are fantastic for HR in terms of being able to view where people are at and sampling the quality of the data entered. Beware though- people resist giving up the traditional paper version!