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Joe Lane, a consummate professional and Accreate’s guest blogger for December 2015.

Joe Lane is an Operations leader with extensive international senior level experience in operations, supply chain and manufacturing. He is passionate about people, lean leadership, innovation, and change management.

Here he shares some personal insights on performance management.

Managing performance in a large organisation - a 3rd Dimension

Tried and tested process….

For some time, performance management focus was on a systematic approach which tracked results and behaviour against annual objectives and standards. It took strong attention and rigor over several cycles to normalise standards and processes across multiple locations. An individual’s position on the two-axis performance plane determined remuneration and recognition. Critically it also was used to support identification of “talent”, linking directly to individual development opportunity and ultimately to career progression. The consistent process enabled a strong focus on managing both talent and poor performers within and across sites. But that is not surprising, this is all tried and tested good practise.

Un-intended consequences….

Implementing the process created a slow-burning but significant problem. Addressing poor and exceptional performers is really important but management attention was now systematically focussed on 20% of the population. But not sufficiently on the cohort of content-rich, often mission-critical, individuals that make up a sizeable part of the middle of the bell-curve. Creating a culture where the impact and needs of the critical “core” were not front-and-centre in the performance management and development process is ultimately counter-productive.

The warning lights started to flash in the second cycle, but were put down to a typical human reaction to change, increased objectivity and tighter management processes. Over time, the response within the “heavy-lifting” core of the organisation shifted from discomfort with the process, to some key individuals exiting, and then to the beginning of a measurable decline in engagement.

The Third Dimension….

The solution was to develop a third axis in the performance management process. Defining the axis initially was intuitive, defined as “Impact/Value”. It was intentionally a loose definition encompassing: personal leadership and influence; technical/functional expertise; market/customer intimacy; process mastery; and personal ownership. This was viewed over a longer time-horizon than the current year.

Performance and Behaviour continued to be scored as: Below; At and Above expectations. Impact/Value was marked at: General; High; and Critical.

The adaptation influenced the make-up of the talent pool but had no impact on the poor performer pool. Overall the focus population increased from 20% to 30%. Critically the approach is married to a talent development discussion that addresses not just those on a hierarchical career path but also on the functional/cross-functional development needs of key individuals in the core of the organisation. Pay differentiation became more sophisticated and appropriate for effective retention of key individuals. The broader one-to-one performance conversation about the 3 dimensions of performance was actually the key contributor to rebalancing engagement and reversing the trend on unwanted turn-over and dis-engagement.

Articles by Lorraine Bolger