Performance management

Managing the performance of your people is arguably the most important aspect of a manager's job. But all too often it's left to an awkward annual discussion that probably does more harm than good. And that's a real shame, because done well it can have a hugely positive impact on the performance of an individual. So what do we mean by performance management?

Performance management is the entire process by which an individual and his/her supervisor agree desired deliverables and outcomes, agree the enablers that need to be put into place, review progress regularly and agree future actions as appropriate.


It begins before an individual even starts in the role and ends when he or she moves on.

Traditionally performance management has meant a wordy job description left in a dusty file somewhere coupled with an awkward annual review and the prospect of a difficult discussion about pay. This approach didn't work then and it certainly doesn't work now.

Latest thinking on performance management

Unsurprisingly, enlightened organisations are rapidly moving to something that can actually help individuals to perform! There is no shortage of advice out there but fortunately there are a number of common and sensible themes that recur. We are going to focus on the core actions that work, rather than pursue some of the more weird ideas on the fringe. At the same time, we need a system that is effective, easy to manage, is relatively stress free and doesn't take too long!

At the core of any progressive performance review system is the concept of regular discussions on performance between the individual and his/her boss. I would suggest a monthly discussion, with the meetings clearly locked into both parties' calendars well in advance. One hour should do it. You could easily move to a two weekly meeting if you prefer, but for most organisations (big or small) developing the habit of a monthly discussion should not be too difficult, and a vast improvement over current practice. The discussion about performance should be combined with a discussion about job satisfaction and their development, and there is more on this subject in the section on Motivation.

I have heard some managers respond that they are too busy to find time for a monthly review meet with each of their people. My response is always the same - if you can't find an hour per month for each of your people then I am not sure you should be managing others at all.

For the discussion to work well you are of course going to have to define what is expected of the individual. Most job descriptions are way too woolly for this purpose. I would strongly advocate a set of written deliverables that covers three critical areas:

1. The principles or values that govern the behaviour of everyone in the organisation.

2. The underlying deliverables of that particular position (more on this later).

3. Any episodic objectives - i.e. those that change over time as one objective is reached and another replaces it.

You also need to disconnect the annual pay review from performance review discussions. If you have monthly performance discussions then you are well placed to have an annual review of pay as a completely separate exercise. More of this in the Pay and Benefits section.

Performanec management graphic
Performance discussion cartoon

Copyright: <a href=''>andrewgenn / 123RF Stock Photo</a>

Automated or paper based performance review processes?

You have a choice of whether to stick with a paper based system or go for one of the growing number of automated cloud based systems. There are some clear advantages to a cloud based system, not least the ability to collect feedback from peers electronically that contributes to the individual's understanding of how well he or she is doing in the eyes of colleagues.

That said, experience suggests that automating any system or process that is currently operating badly can lead to real problems. You may be well advised to introduce a simple but effective paper based system to start, and then move to an automated 'whistles and bells' system once everyone is in the habit of conducting regular performance discussions.

The performance management process

Let's assume you current process is either poor or non-existent. Here's how to move to an effective but simple system. The process should look like something like this:


  1. Set out the values and principles that govern our behaviours and actions

  2. Set out the deliverables in the specific role

  3. Set out any episodic objectives

  4. Agree resources, help and input required

  5. Collect feedback on performance

  6. Discuss progress regularly and frequently

  7. Agree actions going forward


Let's look at each one it turn.

1. Set out the values and principles that govern our behaviours and actions

Many organisations have a set of values or principles that all staff are required to live by at work - from the CEO to the most junior recruit. These are important as they remove the need for many judgement calls. Whenever a member of staff is faced with a decision, they should be able to refer instantly to the organisation's principles to see if the answer is apparent there. These common values or principles should be set out in every staff member's performance documentation. At each review discussion the individual and his/her boss should talk about how the individual is applying them. Notes should be made as appropriate.

2. Set out the deliverables in the specific role

These are the requirements of a specific job, set out to encompass all of the 'deliverables' within that role. These deliverables do not change from one month to the next and should only be altered if the nature of the job changes. If you have more that one person doing the same job then the deliverables will be the same for that group of people. Some of the deliverables may well be common to everyone in the organisation. As an example (and at the risk of sounding 'old fashioned') I would always include something about attendance and punctuality. The key point however is that we set out what is expected from the job holder in that role. Note that we do not include objectives that will change over time in this section, they are covered in the next. As previously, at each performance review meeting the two parties discuss how the individual is doing in each area, with notes being made as appropriate.

3. Set out any episodic (timed) objectives

These are objectives that will hopefully be met and then potentially replaced with others. For example:

  • 'Create a new twelve month rolling promotional plan by the end of June'

  • 'Recruit a new electrician by the end of September'

  • 'Create a plan that sets out how the department will support the new corporate strategy by the end of November'


This section would also include key performance indicators (KPIs) or 'targets' that need to be met on a regular basis (perhaps monthly, weekly or even daily) where such targets exist. Sales roles for example typically need such KPIs. If this is the case it would make sense to use a spreadsheet in which to record results, percentage achievement against target, cumulative results etc. If the KPIs or targets need to be met weekly, then the frequency of the performance discussion should reflect that.

4. Agree resources, help and input required

It's important to agree and note down what the individual needs in order to get their job done and then work out how it will be forthcoming. The objective is to make sure that there are no avoidable obstacles to the person being able to do their job well. As the manager, you may need to get involved in helping to sort out a few issues so that the individual is not unfairly encumbered in his or her work. It could be anything from a new set of spanners to a regular mentoring session, to a monthly briefing session with colleagues in the marketing department.

5. Collect feedback on performance

The 'evidence' as to how well someone is doing in their work can come from a number of diverse sources. In some roles there my well be regular reports that show how someone is doing against objective criteria. Sales is a good example. But you do need to try and gather feedback against all three of the different categories of results that we talked about earlier- how well the individual applies the principles that govern the organisation, how well the individual performs against the specific deliverables in his or her role, and how well the individual performs against the 'episodic' objectives and key performance indicators.


You could find for example that a new salesperson appears to be getting stellar results against his or her KPIs, but then subsequently discover that he or she has been deceiving customers and has badly damaged your reputation. So always look at the whole picture when evaluating performance, not just parts of it. The representative in your customer service centre who handles the most calls may not be the one that always delights the customer and locks in their loyalty. Similarly, your assistant who apparently does a great job for you may have a dreadful reputation elsewhere in the organisation. So try and gather evidence from a number of sources, including:

  • 'Self assessment' on the part of the individual

  • Objective data relating to results and productivity

  • Survey data

  • Feedback from your management colleagues

  • Feedback from co-workers

  • Feedback from customers

  • Audits or evaluations of some samples of work undertaken

Once you have set up these channels of information it becomes a relatively simple task to get the feedback you need on a regular basis. The key point is to agree and note down how you are going to gather evidence that enables as fair a judgement of performance as possible.

6. Discuss progress regularly and frequently

We talked earlier about the need for such a discussion at least monthly. As with many tasks, it may seem a cumbersome exercise at first. But you will quickly get to a point where both parties are well prepared for the discussion and able to move through the subject areas swiftly and with relative ease. The important thing is to keep it punchy and make brief but meaningful notes. Where the individual is doing well against a principle, deliverable or objective you can briefly thank them, congratulate them and encourage them to keep up the good work! Where he or she is not, ask them to think about why this is the case and what he or she proposes to do about it. Make brief notes in all cases. Don't be afraid to use a smiley face as a note! It's quick, simple and everyone knows what it means.

7. Agree actions going forward

At the end of the discussion make sure you have agreed what is going to continue and what is going to change. A few brief notes will help. Be sure to ask if there any barriers in the way of any plans for improvement and discuss how these can be removed or avoided. Make sure both parties have a copy of the documents and away you go! Your HR department should also have a copy for their central filing system.

Example performance review discussion documents

Attached you will find examples of two monthly performance review documents that you can use to create actual documents for use in your organisation. One relates to a Customer Service Champion (I am not keen on the word agent!) and the other to a Customer Service Manager. Not surprisingly there is considerable overlap, but the manager example includes sections on leadership and management capabilities, as well as provision for some episodic project type objectives.

Rating systems

How you express a rating for performance can be the source of much contention. There are a number of options available, and you need to decide which one to use:

No rating

Always an option- you make comments but do not attach a 'score'.


You could for example score out of 10, 5 or 4. A 4 point system is an interesting (and in my view preferred) option as it forces the reviewer to move either side of 'average'.

4- Excellent

3- Competent, but potential for improvement

2- Less than competent, needs addressing

1- Very poor, with a clear need to improve


Similar to the numeric system, you could use A, B, C or D, with A being excellent and D very poor. Again, using one of four possible ratings gets you out of the 'average' trap.

A- Excellent

B- Competent, but potential for improvement

C- Less than competent, needs addressing

D- Very poor, with a clear need to improve


An advantage of a numeric system over an alphabetic one is that you can add up the points in a numeric system for all measurable deliverables and then convert them into a percentage of the total points available. If (for example) there were 20 items that you were measuring in the list of deliverables, then the maximum points available in a 4 point system would be 80. If the individual in question has a total of (say) 62 points then the percentage total would be 78%. This approach can be very useful in groups where you are trying to decide how to award pay increases. The pot is always limited and you may well want the bulk of any increases to go to the best performers.

Traffic light

Not a bad system, the problem is that you are likely to see a lot of amber!

Smiley faces

A variance on the traffic light system.

How to handle disagreements in performance reviews

There may well be times in the performance review process where the individual and the boss disagree on the evaluation of performance in a particular area. If this happens during the regular one to one meetings it is probably not the end of the world. Note down the disagreement and try and sort it out at another time. You don't want these regular meetings to get bogged down so take it offline. If however there is a more fundamental disagreement as to performance overall, then a more thoughtful approach needs to be taken as follows:

  1. Try and establish the key differences of opinion between the two of you. Discuss them thoroughly and note them down.

  2. Talk through the differences of opinion and see if a compromise is possible.

  3. If no compromise is possible, you should talk to your HR department if you have one.

  4. If there is no HR professional on hand to help you, then explain to the individual that you are going to get a respected independent person to examine the differences of opinion and come up with a judgement. This person could be a manager from elsewhere in the organisation, or a professional from outside. But they do need to be credible. In this way you have demonstrated that you are behaving reasonably. Their judgement should be followed.

Smiley and frowning faces on computer keyboard

Copyright: <a href=''>kebox / 123RF Stock Photo</a>

Example Customer Service Champion performance review document

Example Customer Service Manager performance review document

When performance becomes unacceptable

There may well be a time when someone's performance deteriorates to the point where the actions agreed at the regular monthly performance discussion are not being put into practice. The good news is that because you have a clear and agreed set of deliverables and objectives, and are holding regular performance review discussions, there will be clear 'audit trail' that demonstrates that the issues have been discussed and actions have been agreed. All to often organisations end up 'paying off' people who have been performing poorly because there was no process in place to agree objectives, discuss performance and address problems. If you do find yourself in a position when someone's performance is moving towards the unacceptable here's what to do:

  • Act early!

  • Consider involving your HR manager, or an outside employment expert if you don't have in-house HR. The law is constantly evolving in this area so if in doubt- take professional advice.

  • Keep the process private, maintain confidentiality.

  • Ask yourself a number of questions before you start:

    • How is the unacceptable performance manifesting itself?

    • Are you able to clearly demonstrate that this person is failing to achieve a result that could reasonably be expected?

    • Are you treating this person fairly in the context of others?

    • Is the problem one of ability or conduct? If the latter, it's a different issue. See the section on Counselling for help.

Discussing poor performance

  1. As always in such a situation, consider taking professional advice. At least talk to your boss beforehand (if you have one).

  2. Arrange a private meeting. Advise the individual that you want to discuss concerns over performance.

  3. Depending on how serious or advanced the issue is, it may be appropriate to advise the individual that they can have someone of their choosing present to listen in and act as a witness, but that this person may not contribute to the discussion. Similarly, it may be appropriate to have your own witness present, or better still have an officer from HR with you.

  4. Remain calm and courteous - don't get emotional. Equally, don't allow yourself to get all soft and heap undeserved praise on the individual. Your job is to get to the bottom of the performance problem and agree a plan of action to fix it.

  5. Explain your concerns. Stick with objective facts that you can support - how the poor performance is manifesting itself.

  6. Explain why the situation cannot be allowed to continue.

  7. Ask the individual why he or she thinks the situation has come about. Don't second guess him or her - you are unlikely to know all that is going on in his or her life.

  8. Ask the individual for ideas about solutions. Try and explore solutions thoroughly and see if you can get agreement regarding actions to take.

  9. Offer help and support, but make sure that it is realistic and appropriate. You have to be able to defend your actions and demonstrate that you have behaved fairly and reasonably.

  10. Summarise what has been agreed carefully and unambiguously. Agree when you will get together to review progress (very soon!). Make notes about what was discussed and agreed, and distribute them (confidentially) to both parties within 24 hours of the meeting.

  11. Keep your part of the bargain and do what you said you were going to do.