Performance management is a key part of any business, yet is not often a priority for line managers. Barrie Friend, Partner at MaST International, outlines some of the ways HR can involve line managers in performance management, and explains how encouraging them to understand the financial and legal aspects of the process is vital to creating a successful system.

Helping line mangers understand performance management

At management level, the understanding of the theory behind an effective Performance Management Process can help the managers' effective application. The Expectancy Cycle is one useful starting point. This describes the link between jobholders' efforts, results, and the expectation of reward associated with this 'input' and 'output'.

This model shows an ongoing relationship between the rewards offered to staff, their motivation, the effort they show and the results achieved, as well as how this links to wider needs. Extrinsic rewards include bonuses, promotion and 'tangible' rewards. Intrinsic rewards include praise.

In our work at MaST we've found that many managers are restricted in motivating their staff because they can't personally give extrinsic rewards. This is not an uncommon situation in many organisations - a line manager probably will not have a significant bonus pot to dip into. However, an understanding of the Expectancy Cycle means that the opportunity to apply intrinsic rewards e.g. praise, personal attention is a powerful route for the manager to take.

To ensure that this cycle does, in practice, work, the manager needs to take three further actions by ensuring that the jobholder has:

- crystal clear role clarity - "If I don't know where I'm going I'll end up somewhere else"

- the resources to do the job; this confirms the need for development and training

- regular and frequent feedback to ensure that goals are still relevant, milestones are being achieved and that competency levels are still appropriate

The manager also needs to appropriately proactively manage his or her staff over the typical 12 month performance cycle, not just at one or two points during the year. They need to understand that a typical performance cycle might work this way....

...Set Goals, Create Action Plans, Give Feedback, Review Progress, Assess Motivation, Coach, Praise, Review, Offer Development, Counsel, Praise, Review, Mentor, Delegate, Appraise.... - far wider than ticking boxes once a year.

Linking financial measures to Performance Management

Linking individuals' goals to those of the department and of the organisation is an essential part of the Performance Management process. Many of the organisation's goals are expressed in hard output measures (for example profit; ROI; EBITDA) and a manager's understanding of these can aid effectiveness and efficiency in individual jobholder's focus.

If the manager is trained to understand how his or her team's activities affect corporate outputs, 'nice to do' and 'essential to do' activities are distinguished. Thus managers can focus on, for example, profitable sales that generate cash on timely basis rather than sales at any cost.

If the managers know what drives shareholder value, they can make sense of comments such as 'a freeze on recruitment' and manage in a way that contributes to corporate and shareholder objectives.

The finance department is often viewed as producing reams of meaningless data. With a better understanding of finance then managers can work more closely with their finance departments to produce information, rather than data, to enable them to monitor performance and apply corrective action and positive praise reinforcement where appropriate.

The legal aspects of Performance Management

Skills and knowledge of how not to transgress the law has to be an important part of today's managers' competence.

Many managers are understandably confused with the recent spate of laws that can affect how they treat their staff. It is right to involve the HR professionals in handling many 'tricky' situations. However, an understanding of the law can both help prevent a manager jeopardising the organisation by ignoring a situation or attempting to handle it in ignorance of what can and must be done, and help a manager know how soon HR help must be sought.

Common situations that managers may come up against include:

- dealing with problem staff and the tricky area of "poor attitude"

- handling poor performance and setting realistic targets for improvement that are non-discriminatory and reasonable within the law

- managing absence while understanding of how to avoid contravening discrimination laws, and the use of return to work interviews

- turning around a poor performance culture ("we've always done it like this, so it's now part of our contract")

- how to dismiss with the minimum of risk and the tactical advantages and disadvantages of compromise agreements

The law is a minefield, and many employees are aware that they have rights. To be effective in this area, the manager needs to be aware of the pitfalls of a poorly executed Performance Management System and the cost in negative publicity as well as tribunal costs to the company.

Barrie and his colleagues will be investigating the realities of Performance Management at "What gets measured gets results", an interactive session - part seminar, part involvement and part sharing of best practice - on Thursday 10th April at 11.45am at HRD.