Once the organization’s vision has been translated into strategic goals, and then into outputs, performance measures and targets, people will know what is required of them to achieve the organization’s vision. Systematic communication on how people are performing against their targets is critical, and this is the role performance feedback plays.
We define performance feedback as:
Official information from the organization that tells people how they are performing against targets.
Performance feedback is the foundation of what we call the performance-linked communication system.
Effective management teams recognize the importance of feeding back performance information to all levels of the organization, particularly to the workforce level.
Failure to do this can be one of the most costly errors in organizational management. While resources are invested to ensure the financial director has all the information he needs to make decisions and perform in his role, little is invested in providing the sort of information workers need to perform their role – yet these are the people that are immediately adding value to the products or services delivered by the organization.
When performance feedback is systematically established in the organization, a performance culture inevitably results. Because performance feedback brings relevant performance information to everyone, ownership, and accountability of performance targets can be transferred directly to the various teams doing the work. When teams take responsibility for their targets and get visible performance feedback on how they are doing, they are motivated to improve. A culture of performance improvement develops and grows.
An organization’s performance information has to be communicated to all those who work in the organization in terms that are relevant to each workgroup. The performance measurement system must feedback company financial budgets against actual to the financial director, and also local team targets against actual to each local work team. The strategic planning system must feedback strategic goal achievement to the directors of the company, and also targets against actual to each local team. The team performance system must communicate company-wide performance to the management team, production performance to the production team and marketing performance to the marketing team.
In the same way, the performance feedback system communicates information about organizational performance in terms relevant to every team doing each job within the organization.
The most common pitfall in performance management is failing to provide performance feedback to all those who can improve the organization’s performance. While most performance feedback systems provide information to senior management, and workers dealing with customers receive feedback from those customers, about 80% of the employees who are adding value are missing out on necessary feedback. This is not good management. The managing director, looking at historical data, cannot do anything directly to change the result, whereas the worker, when informed, can do so.
Yet in business too often only the senior management knows what is going on.No sports coach in his or her right mind would contemplate restricting information about the game plan to the captain. Common sense tells us what has been confirmed by experts: the shop floor is where performance feedback is most valuable.
Performance feedback truly is the breakfast of champions.
For more information see our publication: Performance-linked communication, How to communicate the right information to the right people at the right time.
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