What keeps your business leaders up in the mid night? - Performance, Productivity, Profitability! An organization cannot sustain in this highly dynamic and competitive market by compromising on any of these three attributes. While the organizations are striving to develop extraordinarily outstanding performing teams, they need to think about one important aspect of bringing up and sustaining performance – Is your CEO committed for “managing performance”? This fundamental question will help the organization to understand the level of importance given to performance management in the organization. Needless to say, if you haven’t found an answer to this question, the other two attributes like productivity and profitability will definitely have a significant negative impact.
Raining profits
Why do we think CEO’s commitment and involvement are an absolute necessity in managing performance? It all starts from setting the goals at the organizational level cascading it to all levels in the organization, periodic reviews necessary modifications, and frequent feedback mechanisms. It’s assumed that, line managers and human resources department will definitely be focusing on these performance management areas because they don’t have an option. And doing it because they don’t have an option, it will be for the “sake of doing it” which is ultimately not going to help the business. Mostly, this system is being considered as a yearly routine to provide feedback and appraisal ratings to the employees and also use this information for decisions on promotions, salary hikes, and more. The question here is how can you guarantee that the Line managers are committed to do or has the drive to do a proper performance management evaluation for their teams? It clearly points to the need of your CEO driving from the front to put pressure on his/her direct reports to manage performance by showing linkage of performance to productivity and profitability.

Organizations definitely realize the fact that they’ve got to stay top on competition by periodic improvement of performance and efficiency. Also, they do understand how performance will influence productivity and profitability. Most of the organizations have got performance management system either internally developed or done with consulting help from outside. But do you think our managers realize that they have people responsibility of performance management which normally cannot be delegated? And therefore the question is can the CEO help in this transformation? Though we talk about it day in and day out, in reality, I don’t think our Managers are keen on people management especially as it relates to performance management and it’s viewed as "HR imposed people program” that bears little relationship to a company’s strategic and operational imperatives. Today, the system is viewed as a place to do only the appraisals during the year end and therefore has come to be seen as an HR activity. Ideally, it should be a tool which should be used to effectively manage performance. Managers should spend quality time in setting goals, monitor and review their team performance and giving performance feedback. Here, in many cases, they don’t even set the Goals and feedbacks are not given even at the year end. Also, most of the organizations and their CEO’s are not keen in asking or reviewing people on “performance management” as the focus on reviews are mostly on numbers or delivery. As a result, people don’t realize the importance of performance management. Ideally the business leadership should be reviewing their team about how effectively they manage the performance. We need to bring in the mindset change in people to ensure effective utilization of performance management system for delivering business results. I definitely think that the CEO can help bring in a massive change in mindset. CEO should continuously reiterate the message to his/her business leaders on their role in people management. We need to bring in the realization among each leader and manger that “they have HR responsibility as part of their job which can’t be delegated”. This transformation can succeed only by the CEO getting personally involved in timely communication on its significance, helping his/her direct reports to realize their HR responsibility and make them committed to manage performance. The role of the CEO does not stop there. The maximum impact is created when the CEO role-models paying attention to the performance management system and process himself or herself.