February 2016 | Commentary | IT Matters

Tapping the Power of Performance Management

Tags: Education & Careers, Manufacturing, Logistics, Technology , Supply Chain

Chase Sowden is Supply Chain Architect, Barcoding, Inc., 888-412-7226

In today's workplace, performance improvement and the role of performance management are increasingly important. Organizations are under more pressure than ever to become more efficient and improve business strategies to remain competitive.

Consider, for instance, a manufacturer with five warehouses that decides to implement a new enterprise resource planning system. The goal is to increase efficiency, but what happens when the manufacturer introduces the technology assuming that all five warehouses use the same processes?

The manufacturer first implemented the system at its corporate location. Yet, when employees were brought in from other warehouses for training, the manufacturer found each warehouse had a slightly different operating process. The system required some modifications.

The manufacturer could have avoided this fiasco if it had a more structured performance improvement process—a systematic practice that involves employees in improving organizational effectiveness to achieve the company's goals.

Begin With Your People

If companies don't align individual goals with business strategy, then they waste time and resources. Low employee engagement levels may mean individuals are not performing at their best. Inconsistent evaluation criteria and rewards can lead to mistrust, lower productivity, and higher attrition. If top performers see no difference in performance ratings, opportunities, and compensation from under-performers, morale can suffer. Lack of documentation, visibility, and accountability can negatively affect stakeholders who are demanding more transparency.

And, if accurate performance information is unavailable or difficult to access, training, development, and project assignment decisions may not be made in the company's best interests.

Management buy-in is equally important to the performance management process. If management does not understand the importance and value of the process, it can lead to consistently late or incomplete appraisals, mistrust, avoidance of performance reviews, and a lack of honest performance-related discussions.

The primary reason to make sure performance management processes are functioning properly is to tighten the link between strategic business objectives and day-to-day actions. Effective goal setting—including timelines, combined with a method to track progress and identify obstacles—contributes to success and bottom-line results.

Regularly tracking progress against performance goals and objectives also provides the opportunity to recognize and reward employees for performance and exceptional effort, contributing to job satisfaction and productivity.

Starting the Process

When effectively implemented, performance management best practices result in a wide range of benefits. In order to achieve these results, you need an operational performance assessment. The assessment requires taking a holistic look at your current processes, people, and technology, and tells you exactlywhere you are and what you need to do to meet your goals.

If the manufacturer in the warehouse example took the time to answer this question, it would not have had such a disconnect when it came to introducing new technology.

When implementing new solutions, an effective performance management process must be in place. Taking a step back, reviewing current operations, and aligning people, processes, and tools with your business objectives ensure positive results. Success requires full commitment from your entire organization.






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