Reactive vs Proactive Performance Management

This is the continuation of the transcript of a Webinar entitled, "Knowledge Driven Performance Management” hosted by InetSoft. The speaker is Christopher Wren, Principal Consultant at TFI Consulting.

So what we’re going to look at now is the idea of the day-to-day thought leadership forum. This forum is very fond of talking about the opportunity that performance management has to help drive the creation of self-actualizing organizations.

So this is a very simple comparison chart that talks about reactive performance management when it’s implemented in many organizations because it’s relatively simple and it’s easy to understand versus proactive performance management for places where we want to take organizations and make them more effective.

On the reactive side, the effects show after reporting lagging indicators. Questions like what do we know about what happened in the past versus what we wanted to have happen in the past. From there, people are punished if they don’t meet those goals, as opposed to before the fact.

Strategic planning is an important part of before the fact performance management. Things like measuring leading indicators as to what future performance might be as opposed to simply measuring lighting indicators; moving from reactive performance management in terms of focusing on red.

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Deal with Poor Performance Problems

Going back to the reactive side, you must ignore what is or focusing on bad performance, hammering people for not achieving their goals, and overall ignoring good performance. It’s essential to celebrate the good, the team accomplishments, and, at the same time, deal with poor performance problems in a private fashion.

On the proactive side, we don’t want to just deal with the reds or celebrate; we want to also capture the best practices and procedures so that they’re not just useful to the team we’re working with today, but they can also be applied by other teams in the future.

So, proactive performance management is also responsible for gathering that information and making it available throughout the organization as needed. Reactive performance management often takes longer to react to bad performance because of measuring lagging indicators and essentially relying upon managers to point out and identify the problems of their subordinates and then asking those subordinates to fix their performance.

In a proactive performance management organization, the team has been involved in establishing the goals. So therefore, the team is more committed to those goals and the team is also more committed to identifying performance problems earlier in the process, reacting to them, and fixing them before they really become headaches.

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Culture of Proactive Performance Management

So building a culture of proactive performance management involves having the team involved in creating those performance measures by understanding what’s being measured and why it’s being measured, how it fits into the larger strategic plan, and how it’s aligned with their own individual incentives. This drives a culture where people are proactively looking to improve performance and proactively looking to avoid problems or fix problems before they become critical.

Another aspect of proactive performance measurement is to take better, effective use of knowledge assets within the organization. If you think about most organizations, they have a lot of knowledge assets and some of those knowledge assets might be tangible.

They may be working documents or papers that include best practices that they’ve developed, but they also involve knowledge assets in terms of people and the experience within an organization. Very rarely though is that brought to bear in the performance management realm. So, better use of assets in providing proactive performance management is a key aspect.

So when we talk about proactive performance management, what we’re looking at doing is augmenting the existing corporate performance management processes to better link strategic goals with team performance and individual incentives. We’re also taking that one-step further and proactively taking advantage of existing knowledge assets within the organization, within the people in that organization, and also might be available externally to the organization.

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Managing Performance as a Corporate Process

Another important aspect that I mentioned earlier is that we want to move from simply reporting performance to controlling individual’s behaviors to effectively managing performance as a corporate process. It involves all levels of the organization in setting the goals and achieving those goals. We want to improve the effectiveness of resolving unsatisfactory performance.

So one of the problems that we often run into is that in a performance reporting culture, we identify that there’s a problem from the scorecard going red and at that point we identify an individual that owns that particular performance indicator and we tell them you’ve got a problem, go fix it. At that point though, we don’t provide them with any additional assets or resources, or guidance into how to fix the problem.

I might be a manager and you’re working for me as a subordinate and I see red, but I don’t have enough time to work with you to help resolve that problem. I simply tell you to fix it but I don’t provide you with any guidance or coaching.

One of the things we want to do in terms of proactive performance management is provide a more proactive environment. We want to provide you with the assets to help you fix the performance problems, or help the team fix the performance problems, and provide you with a specific guidance as opposed to leaving it up to you to flounder around trying to fix this particular problem.

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Clearly, I am strongly for getting a more proactive environment. We also want to provide additional oversight, quality control, and executive reviews but less in terms of punishment and more in terms of oversight review and coaching.

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