The Manager’s Dilemma

Delivering Business Results and Developing Your Employees

This article was first published in the OD/Leadership News, April 2004
Author: Jill Ririe Walsleben

Lew is a senior level manager at a professional services firm. At his firm, managers are expected to do a lot. He is responsible for growing his line of business, maintaining positive relationships with several key clients and for overseeing the development of a ten-person consulting team. In short, Lew faces a dual mandate of delivering business results and developing his employees. As he sits down at his desk and takes a sip from his first cup of coffee, Lew ponders how he can accomplish all he needs to do. Client meetings, budget planning, and completing the annual performance management process for his team–all urgent and pressing business responsibilities– are competing for his time and attention. He wants to do the right thing, but knows even with some effective delegation he can’t get it all done. As Lew looks at all the papers on his desk, he wonders what the best way to prioritize his time is.

Anyone who thinks being a manager is easy, has either never been one or did not fully perform all the required roles. It is tough trying to effectively balance your time between meeting employee, client and organizational demands. Unfortunately, we cannot completely solve Lew’s dilemma. But in the area of performance management, we can guide him to focus on those activities that will most significantly accelerate individual development and drive performance improvement.

Before we look at those activities, let’s take a moment to look at performance management in general. Historically, performance management was an HR-driven process focused on assessing performance and documenting results. But today in some companies, it has evolved to a business management process–one that is focused on aligning individual and team goals with business objectives to positively impact business performance. Why is this happening? According to a 1996 study by Hewitt Associates, companies with effective performance management processes outperform other companies without such processes on every financial and productivity measure used; including profits, cash flow and stock market performance. According to the same study, a well-designed and implemented performance management system can bring about significant and measurable improvements in human performance and a corresponding increase in a company’s overall value.

Improving employee performance is not just the responsibility of the manager. It is a shared responsibility with organizational factors (such as company culture and the performance management process) and employee-related factors (such as the willingness to accept and act on feedback) impacting its effectiveness. The most effective systems are those where all the three elements work collaboratively. However, according to a 2003 study conducted by the Corporate Executive Board (CEB) almost half of the many activities that organizations, employees and managers conduct to improve individual performance, relate directly to the role of the manager. So if managers play such an important role in driving performance improvement, what specifically should managers being doing? Do all manager-related activities have the same impact, or are some more impactful than others? According to the study, managers can drive performance improvement by targeting their efforts at a handful of activities which have the potential for improving employee performance by 25%. These activities are the following:

• Provide fair and accurate informal feedback
• During the performance review meeting, emphasize performance strengths
• Be knowledgeable about the employee’s performance
• Provide feedback that will help the employee do their job better

Alternatively, managers should steer away from the following activities, as they most likely will result in a decrease in performance:

• Frequent changes to projects and assignments
• During the performance review meeting, emphasizing performance weaknesses
• Emphasizing performance weaknesses during informal feedback
• Emphasizing personality weaknesses during the performance review meeting

While a well-designed and implemented performance management process is one of the most effective tools an organization has to drive high-performance, employee perceptions of their mid-level and front-line managers (according to a 2002-2003 study conducted by Aon) suggest that their managers are lacking in critical management skills. This is troubling as an employee’s decision to stay with, or leave an organization, is often based on his or her relationship with an immediate supervisor. Company’s that educate and train their managers to conduct the most highly leveraged performance improvement activities will reap a variety of rewards, including increased productivity and enhanced employee retention.

Failure to find the time to effectively execute everything from big-picture strategic goals to narrow individual objectives is a problem shared by all managers. Lew had it right. He knew what he needed to accomplish, he just wasn’t sure the most effective way to get there. When managers get it right, research shows they increase revenues, shareholder value, interest from institutional investors and employee satisfaction. Are there some “Lew’s” in your organization who might benefit from some help in prioritizing their performance management activities?