The best form of performance management is self-management. This means that people understand what is expected of them, are committed to achieving it and seek feedback, guidance and support to help them do so.
Performance management systems that remove responsibility from individuals are bound to be less effective. The processes put in place – whether formal or informal – should therefore be designed to encourage self-responsibility.
In addition to financial indicators, it is possible to develop imaginative metrics – a more balanced scorecard – and to measure performance against those metrics for such aspects of performance as:
- Client development (using client service feedback, for example, and measures of the breadth and depth of the relationship a partner or professional develops with clients)
- Marketing and business development (looking not just at new business wins, but at the number and quality of contacts being developed)
- Leadership (using feedback from staff about the way they are led, and measuring group leaders not on their individual achievements but on the success of the group they lead).
What gets measured tends to get done. If firms measure the wrong elements, they are likely to have a wrongly-directed organisation.
Putting systems in place to track performance will help individuals manage their own performance. This kind of feedback is essential to help people perform to their full potential. Without useful feedback, people are likely to carry on doing what they have always done.