Performance management can contribute to the development of a high-performance culture in an organization by delivering the message that high performance is important. The management of organizational performance is the continuing responsibility of top management who, with the help and advice of HR, plan, organize, monitor and control activities and provide leadership to achieve strategic objectives and satisfy the needs and requirements of stakeholders. Individual and team performance management systems play an important part, but they function within the context of what is done to manage organizational performance and to develop effective work systems.
The strategic approach adopted by Johnson & Johnson was described by Wortzel-Hoffman and Boltizar (2007) as follows:
As we embarked on developing an integrated performance and development process into the organization, we knew that driving change and an enhanced process requires a cultural shift within an organization. The best performance management becomes a continuous process and is not a one time event; it takes time and effort and a dedication to developing people. We also knew that from a business standpoint it was critical to build and develop the talent pipeline of the organization to meet the aggressive business goals and dynamically changing marketplace.
Performance management at organizational, team and individual level defines what high performance is and how managers and their teams should achieve it. It explains how performance should be measured and the steps that should be taken to monitor results in comparison with expectations. The means of achieving high performance are provided by defining the performance expectations implicit in the psychological contract, creating high levels of engagement, motivating people and enhancing skills and competencies through feedback, coaching and personal development planning.
The contribution of HR
HR contributes to enhancing organizational performance by providing insights on the performance issues affecting the organization and its employees. This means identifying the reasons for the issues, exploring their implications for business and people management and conveying these messages to management. The aim is to find new ways of meeting performance challenges.
HR can advise management on the development of a high performance strategy supported by performance and reward initiatives. Additionally, HR can review policies and practices such as those concerned with organizational development, engagement, resourcing, learning and development, and employee relations. Decisions can then be made to enhance existing policies and practices or introduce new ones. Importantly, consideration needs to be given to how integration of these policies and practices can be achieved by linking them together in a ‘bundle’ so that they are mutually supportive.
HR has then to prepare a business case for any developments or innovations and persuade management to accept it. Line managers and employees should be involved in the development programme and a communications strategy should be created to inform people about what is going on and how it will affect them.
HR will also be involved in producing and project managing an implementation programme. As necessary, learning and development activities and events will be conducted to ensure that line managers and employees have the skills required.