What are the "three axes" of performance management?

What are the "three axes" of performance management?

Performance management? Triaxial? Do you know that?/You know what? Do you know that?/You know what? Welcome to read below and learn together!

With the continuous development of China's modernization, performance management has become an increasingly important issue. The traditional performance evaluation method has been gradually replaced by other methods. For the performance management challenges, different enterprises adopt different schemes. Some companies adopt a bottom-up approach, first setting job responsibilities, then designing performance management forms, and finally implementing them by providing training in the use of forms. Relatively speaking, other companies have a higher starting point. When designing a performance management system, they will consider it from a strategic perspective, but when implementing it, they will often encounter many practical difficulties due to lack of experience. How to effectively link enterprise strategy and performance management?

In this regard, the most advanced method is the balanced scorecard. The balanced scorecard has many factors. Simply put, the balanced scorecard combines the company's strategy with performance management. Goals are usually set from four angles: finance, customers, processes and people. Each strategic goal has one or more quantitative indicators. Each indicator has a target value. Balanced scorecard is usually associated with floating salary in salary system. We know that to achieve every key goal of performance management, we must have an action plan. The company's goal is decomposed step by step, so it is implemented to every employee. Managers and employees can review the objectives regularly and frequently (recommended frequency is more than half a year), and then adjust the strategy, objectives, target values or action plans according to the changing business environment. The balanced scorecard method can also be linked with business process improvement projects, so that the company can better implement the strategy.

The balanced scorecard covers strategic areas and human resource management. This new method was invented by two professors at Harvard? Robert? Kaplan and David? Norton invented it to help companies design and implement corporate strategic performance.

According to the practical experience of foreign companies, as long as the balanced scorecard method is properly used and conforms to the specific environment of each company, it can help the company to clarify the strategic focus and the success of strategic implementation. This method can be linked to the salary system to guide employees' work. A British production company has developed rapidly in the past few years. Senior management wants to expand overseas market share and increase export volume. The manager invited a consulting company to introduce the balanced scorecard method to his senior management team and implement it throughout the company.

The consultant first gave a demonstration to the top management, and then helped them discuss the company's strategy and set the company's goals. Using the balanced scorecard, they first set the company's strategic goals, indicators, target values and action plans, and then implement them to the next level according to vertical or horizontal alliances. The relationship between departments has also been determined, and according to the mutual expectations between departments, the relevant indicators are combined into the balanced scorecard of the department. At this time, start setting personal goals and making ability development plans. Through the organic combination of performance and floating salary plan, the enthusiasm of employees in the company has been greatly improved.

The whole management process has gradually changed from strategy to key task. The business process is analyzed and redesigned, and the improved design scheme has been implemented. The job description was revised at the end, when the strategy was clear and the process was redesigned. The basic salary is also adjusted according to market changes, but the impact of the adjustment is not great, because floating wages give managers and employees the opportunity to earn more as long as they improve their performance. In the end, the company achieved its strategic goal, and the salary and benefits of managers and employees were also improved.

In this case, there are several key success factors:

1. The general manager and senior management personally participated in the whole application process of the balanced scorecard, and ensured the systematization and standardization of the process. This shows all employees that this project is very important and will bring beneficial improvement to the company.

2. The goal is not only vertically linked, that is, it runs through all levels of the organization, but also horizontally linked, that is, it spans the business processes of various departments.

Everyone knows where the company is going and what the strategy is to get there. This is because the top management first defined the strategy and clearly conveyed it to the following employees in various ways. The goal setting process of balanced scorecard, supplemented by monthly performance review, is particularly helpful to realize these achievements.

Avoid? Management by objectives? Misunderstanding of ...

Some companies focus on goals and set target values. This method, sometimes called management by objectives, has been used in developed economies for many years.

These enterprises start by setting company goals. Sometimes middle managers and employees can present their goals to the boss, or the boss can suggest goals that must be established for employees. Sometimes the supervisor is likely to persuade his subordinates to accept the goals he has set from his own point of view, so that the goals set by his subordinates can help achieve the goals of the supervisor. Sometimes a company can systematically set company-level goals and then implement them to the next level. But once the goal is implemented to the next level, the functional barriers of various departments are highlighted. The goals set by the financial manager are only suitable for the financial department, as are the human resources department and other functional departments.

In this way, everyone pays attention to the goals that they think are important to them, because they are closely related to their performance appraisal and salary system. The company will organize a mid-year review to discuss the current progress and the gap with the annual target. At the end of the year, managers and employees discuss the company goals and personal goals, as well as the progress made. This subjective evaluation may lead to different opinions, because the final evaluation result will affect the promotion of annual bonus and salary.

A pharmaceutical company decided to implement management by objectives throughout the company. In fact, they have used this method before when they worked out the bonus system in the sales department. By comparing the actual sales with the target sales, the company pays the corresponding bonus to the sales staff. In this way, the actual salary of sales staff includes two parts: basic salary and a certain proportion of personal sales bonus.

Sales have been greatly improved, but it is difficult for the production department to complete the delivery plan. The sales department complained that the production department could not deliver the goods on time. The general manager and senior management decided to establish a goal-setting process for all department and individual managers and key employees. In order to implement this new method, they need to use a performance evaluation system. The objectives of the production department include on-time delivery and inventory cost.

They hired a consulting company to guide managers to design a new performance evaluation system and put forward suggestions to change the existing salary structure. They pay high fees to consultants to modify the basic salary structure, including job analysis and job description. Consultants are also invited to participate in the formulation of the bonus system, which is closely related to the realization of the annual goal. They instruct managers on how to organize the discussion of goal setting and performance evaluation process. The general manager hopes that his performance will improve soon.

Unfortunately, however, the performance did not rise but fell. Contradictions between departments have intensified, especially between sales departments and production departments. The production department complained that the accuracy of the sales forecast was too poor, while the sales department complained that the production department could not deliver the goods on time. Every department blames itself for the problems of other departments. Customer satisfaction is declining, and profits are also declining.

I am afraid this is a problem that most companies have. Why does setting goals (and linking them to wages) intensify contradictions and reduce profits?

The company invited the famous McKinsey Consulting Company? Consultation? , and finally found the performance of the drag? Misunderstanding of the goal? ：

1, the target set is not comprehensive. Each department only focuses on a few goals that are very important to itself.

Because the tradition of this company is to conduct performance appraisal once a year, once the goal is determined, it cannot be changed. So even if they find some goals have problems, they will not make changes in time.

3. The goals of each department are not related to each other, but related to the upper and lower levels in the organization.

4. The modified system still has qualitative or subjective evaluation. This means that personal relationships still have a very important impact on the performance evaluation process. There are subjective factors in the performance appraisal of managers, and the intimate relationship between managers and subordinates leads to the inequality of the system.

This is probably the most important point. The target is not in line with the company's specific strategy of expanding market share. The initial goal only focused on sales and on-time delivery, but the most important key aspect of the strategy was not particularly reflected.

Six design principles of performance management Mercer surveyed 300 large companies in North America, and half (48%) of the respondents said that their performance management system improved their business by at least 30% when following the following principles.

1. Pay attention to formulating correct performance measures. Determine the performance goals that can promote enterprise value and have an impact. The core purpose of performance management is to let employees concentrate on doing the right thing. It is suggested that the employee performance model should be unified with the company business model. It is very important to ensure that the expected performance of individuals and teams is consistent with the values, goals and behaviors of the enterprise, which is crucial to the success of the enterprise.

2. The performance standards should be simple, with emphasis on formulation? Critical mission? Performance measurement. In an increasingly demanding and rapidly developing environment, we must correctly determine our priorities. A perfect personal performance management plan should clearly stipulate a series of results and behaviors that can play a key role in the success of the enterprise, and be unified with the company's values. Ensure that performance standards are simple and clear so that managers can use and apply them smoothly.

3. Unified performance standards. Ensure that leaders at all levels have the same expression and feelings about successful performance management. If there is no uniform performance standard, it will lead to confusion of employees' understanding of expected performance and undermine their confidence in the fairness of performance management process. Although performance standards must conform to the relevant laws and cultures of different geographical regions and business departments of the company, managers should ensure that uniform performance standards are implemented throughout the business departments.

4. Establish complementary roles and responsibilities and encourage employees to participate. Take measures to ensure that employees and managers have equal responsibility for performance management. Require employees to participate in goal setting and track and monitor performance management. Encourage employees to regularly evaluate their performance processes. Do not let employees and managers become? Victims and perpetrators? This role. Want to be a manager? Responsible? As a result, human resources? Responsible? Process.

6. Create a comprehensive talent management process. Talent recruitment, talent development, performance management and reward system should be coordinated and unified. Maximize performance and encourage employees at all levels? Qi Xin works together? The talent management process should emphasize the same information about excellent performance. If the talent management process is not unified enough, it is impossible to achieve the expected high-quality performance. Leaders should make clear the relationship between performance and salary, and formulate? Rules of the game? And clearly communicated to employees. Ensure that both managers and employees understand what aspects of performance can determine pay. ;