12 Apr Performance Differentiation
Introduction: Why differentiate performance?
Differentiating performance is a key part of good performance management.
It means that we are able as managers to separate our high performers from our lower performers.
It means that we are able to challenge under performance and to celebrate high performance.
The benefits of differentiating
There are many benefits to differentiating performance:
- High Performers feel recognised for their efforts
- Lower performers are aware of the gap and therefore have an opportunity to improve
- Overall performance is raised when people understand how they compare (think of football league tables)
Knowing how we are performing can motivate us to do better.
Consequences of not differentiating
If you fail to differentiate performance then you face a number of risks:
- You will struggle to award pay rises and bonuses fairly on the basis of performance;
- Your top performers will become frustrated and may leave;
- You will face the risk of letting your whole team slip into mediocrity of performance.
You cannot succession develop if you don’t performance differentiate.
The key steps for differentiating performance
If you apply this simple process you’ll avoid any pitfalls:
- Set clear expectations of performance
- Give regular and insightful feedback
- Level performance at the end of the review period.
Step 1: Set clear expectations
For people to know what is expected of them – it’s best to not assume. Therefore, make sure you are clear with people from the outset what is expected of them. Best to remove any ambiguity now! Also giving people clarity gives them the very best opportunity to meet or exceed your performance expectations.
You can use a number of ‘tools’ to help set performance expectations:
- The job profile for the role – it clearly states what is expected;
- The measures you are setting for the coming year;
- The local capability/skills framework – usually good for being clear about ‘How’ the work needs to be delivered.
Remember – the best tool you have is conversation! Discuss the expectations with your team members.
Step 2: Give regular and insightful feedback
There should be no surprises for ANYBODY when thinking about performance. People deserve to know how they are doing against your expectations.
If you don’t tell people then it makes it harder for them to improve and you’ll cause yourself and them problems when any formal performance reviews are held during or at the end of the year.
Good performance differentiation has a performance CYCLE at its heart. The process does not stop and start and year end. It flows through.Be sure to hold regular feedback sessions (at least quarterly).Let the person know how they are performing, where they can improve and how you would rate their performance overall at this stage of the year. You’re not telling them what they will get at year end, but how they are doing up to now.
Step 3: Level performance at the end of the review period
The aim of differentiated performance is to ensure you draw a distinction between how people have performed against the expectations of the role, tasks and attitudes.
Your role in management is to ensure there is clear differentiation.
One way to do this is to force yourself to rank people in order of their performance.
When you do this you will see a clear line between those who have exceeded your expectations, those who have met, and those who have fallen short.
Common mistakes to avoid when differentiating performance
- Don’t rate the people you like – this is about performance not personality!
- Don’t compare apples with pears – consider what is expected of the role, salary and level of experience.
- Don’t shy away – making everyone the same level won’t help anybody.
- Don’t think that you are helping team motivation by avoiding the ‘not-met’ category. You’re not helping them or the team.
- Don’t commit to an overall rating if the final decision is not yours to make!
- Differentiating performance is key part of good performance management
- Follow the three step process to help with consistency
- Don’t make the common mistakes with performance differentiation.
- Most importantly – not differentiating will frustrate your team and drive down overall team/unit performance.