INTEGRATED PERFORMANCE MANAGEMENT

The PBS dynamic integrated consulting concept recognises that as the world continually changes and evolves, so must the organisation. An organisation at one stage or another will be faced with the challenge of how to attract, retain, motivate and manage the performance of key contributors to the organisation's success. The PBS approach advocates reward structures that reinforce both individual competencies and performances, as well as those of the team and organisation. We design them in such a way that they achieve the correct balance between the shareholder value created by the employee and the rewards given in both the short and longer term.

As the demand for performance continues to ratchet upwards increasing demands are made on the senior management of enterprises to deliver results - the quest for improved performance is never ending. One of the most important opportunities that an organisation has to increase organisational performance is through the way in which it manages its people. The formal process for doing this is called Performance Management. Accordingly, effective performance management systems must become an integral part of routine organisational practice. Emphasizing management process, performance management requires strong management skills and commitment. Its goals are to:

• Translate organisational objectives into individual goals for employees.
• Focus employee behaviour on key actions that will affect organisational results.
• Facilitate the agreement between employees and the organisation on goals and objectives.
• Establish a process for on-going communication and coaching orientated around goals and performance levels.
• Foster a result-orientated dialog between employees and the organisation.
• Promote a climate supporting superior performance.

The relationship between performance management as a management process and other critical organisational levers is illustrated below: 

The corporate litany for the 21st century appears to be:

Companies require capital…
Capital requires investors…
Investors require performance…
Performance requires focused management

Within this litany there is the critical link between investor expectations and senior management and executive pay. Current research indicates that investors are not opposed to high levels of pay when it is tied to equally high levels of performance and hence increases in shareholder value. The process for linking these issues is performance management.

PERFOrMANCE RELATED PAY & COMPETENCE RELATED PAY

The PBS Performance Related Pay (PRP) approach can operate on an individual, team or organisation wide basis. Our advice to clients is, PRP schemes need careful implementation to achieve maximum effectiveness and acceptability.

Our experience in implementing this concept in companies in Africa has shown that the concept of notching (previously held in high regard in many companies in Africa) is rendered immaterial and a non-issue. The notching system assumes that issues of tenure / number of years served as well as qualifications acquired takes precedence over performance issues. The latest thinking in Strategic Human Capital Management regards notching as a traditional and outdated tool that contradicts with the very nature of a Performance Management Culture. At PBS we assist organisations to comprehend that the Competence / Performance Related approach is not just about paying for the acquisition of the competence. It is about the effective use of competence to generate value, the value - added differential concept.