rodi-hr

What is Performance Management and Why Does it Matter?

Wed, 08 Apr 2026 17:35:43 GMT

What is Performance Management?

Performance Management is the term used to describe the business process of aligning individual and team performance with that of the business. It's typically an annual cyclical process which, theoretically, leads on from the Annual Business Planning process. In reality, the annual business planning more often than not doesn't happen in many companies. This typically generates the first (of many) friction point in the performance management process.

What is the Performance Management Process?

There are typically 4 stages to the performance management process:

Stage 1: Objective Setting

Stage 2: Performance Monitoring

Stage 3: Performance Feedback

Stage 4: Performance Evaluation

The evaluation of the out-going year is intended to provides the starting point of the in-coming year, in terms of an individual's development and ability in their role while the annual business plan provides the starting point of what an individual should focus on. Having worked with many companies across numerous sectors, the theory and reality rarely align, for lots of reasons!

Why is Performance Management Important?

Performance management is seen as important for lots of reasons, including:

Provides feedback process that can help individuals improve their knowledge, skills, mindset, abilities, confidence which, in turn, improves their performance
For project-based roles, it prioritises projects focused on delivering business objectives
Research shows that regular feedback increases motivation and performance and employees are actively looking for feedback
Encourages career discussions and assists career planning
Enables good performers to be stretched, to build their confidence in working at higher levels and demonstrate their potential
Promoting talent internally is more cost effective and tends to be more successful. Done well, performance management supports a talent-growth strategy

What are the Challenges with Successful Performance Management?

Done well, performance management contributes substantially to a company's business performance, culture, retention, growth, and reputation. I don't mean to be a Debbie Downer on this but unfortunately, the reality is that there are lots of practical challenges with performance management, such as:

Poor performance management discipline
Lack of buy-in by management
Lack of clarity on purpose and benefits of performance management done well
Lack of investment in manager training
Skipping the annual business planning process, resulting in little to no business direction given
Poor communication
Lack of clarity on what "good performance" looks like
Performance boiling down to one rating number/word at the end of the year
A 1-5 rating scale that doesn't recognise the real performance scenarios managers regularly face
Rating inflation
Poorly designed objectives
Little to no regular check ins throughout year
Tick-box exercise to "keep HR off our backs"

Should Talent Keep C-suite Awake at Night?

support@eazi-sites.com (Eazi Business) — Mon, 16 Sep 2019 15:02:07 GMT

Should Talent Keep C-suite Awake at Night?

I think HR is missing a trick with how they describe themselves. They’ve pigeon-holed themselves into being responsible for the talent when, in reality, that isn’t really their role. Looking after talent is really the role of management (leadership, whichever term floats your boat) but having talked with thousands of managers (from frontline to c-suite), they usually put it at HR’s door. Even changing the title to “People” doesn’t help. They need a good branding person to come up with a better descriptor, to align everyone else’s expectations with reality.

Anyway, I digress but only slightly, because Talent is usually seen as HR’s concern but this is a myth. It’s the concern of leadership because without competent people at all levels and across all functions of their business, business performance is directly impacted. Yes, they might grumble at HR but there’s only so much HR can do. The real costs are borne by the business, not HR.

Now the real costs borne by incompetence, depending on level, is a fairly juicy seam of blog-mining so I’m only going to list off those costs here, and leave you to click through to more detailed articles that explain each cost in more detail.

Employee overtime
Management overtime
Management frustration
Employee turnover
Recruitment replacement costs
Re-works
Over-staffing
Errors
Long-term sick leave
Poorly designed processes
Lack of continuous improvement
Opportunity costs
Escalation premium
Irrelevance costs
Reputational costs

The reality is that the biggest variable on actual business profit is human performance.

Why?

Because pricing takes into consideration all the known costs e.g., overheads such as rent, insurance, marketing budgets etc. as well as the labour costs and the additional margin charged is the profit source. Rent, insurance etc are, relatively speaking, known knowns and controllable. Human performance, on the other hand, is a known unknown. If pricing says the human cost should be €10,000 and it actually cost €15,000, that additional €5,000 is directly eroding the profit margin.

The question c-suiters should be asking is: what’s the true gap between our pricing model’s human costs and actual human costs? If you think you can’t afford or don’t need to invest in talent development at all levels of your business, answer that question and you’ll know whether you need to or not.

If you want to find out more about effective talent development and how RODi HR can help you, let’s talk. Set up a complimentary 30-minute meeting or email us at info@rodihr.com today.

What does “Talent” mean in Business?

support@eazi-sites.com (Eazi Business) — Mon, 16 Sep 2019 14:56:57 GMT

What does “Talent” mean in Business?

Since Steven Hankin of McKinsey & Co coined the phrase “the war for talent” in 1997, and the subsequent book by Ed Michaels, Helen Handfield-Jones and Beth Axelrod, in 2001, a shift was afoot to move towards describing high-performing employees as “the talent”. In a nutshell, that’s what “talent” has come to mean in business – the high performers, those that get stuff done, the ones to watch.

Unfortunately, specifics around what made someone a talent wasn’t particularly articulated. Only that there are a lot more positions than there are talented, high-performing employees with the requisite skill and knowledge sets. Which, if you’re of a need to find talented employees, you probably already knew that.

The challenge with defining “talent criteria” is that it differs between sectors, company cultures, strategies, functions etc. For example, the required talent for regulatory functions are skills such as risk analysis, attention to detail and ability to deal with repetitive work, while marketing functions, on the other hand, might look for creativity and flair. Just the thought of the words Creativity and Flair would be enough to set most regulatory folks into a tailspin!

But it also changes as a talented person moves up the levels of responsibility. The head of a regulatory function needs to be a “look up and out at the horizon” kind of person, which is a very different skill set and mindset than the “head down and get on with it” focus required at a junior level.

To truly have continuous access to talent, its not enough to be able to attract the best of the talent on the market. Aside from the myriad of things that can (and regularly does) go wrong with that strategy, you need to be able to keep them for several years (at least) as well. Which means you need to be able to develop their potential capability and grow them into bigger roles. And there’s two sides to that coin.

Firstly, your company needs to have clear sight of performance standards in each role (as we already covered, they’re different within functions and across functions). On the subject of Risk, without this, companies are taking serious gambles that their managers and senior leaders “know” what those performance standards are, with the assumption that talented employees are consistently be developed towards those standards. I’ll leave that massive assumption there, to reflect on.

Secondly, the number one requirement for any employee to be considered talent should be their openness to learning (which includes constructive feedback) and assimilate knowledge. I’ve worked with hundreds of companies across a range of industries and I’ve yet to come across a company that doesn’t want assimilation of knowledge.

Combining clear performance standards for every role with talented individuals open to learning and assimilating knowledge is the sweet spot, not just for nurturing the obvious “talent” but for developing all potential “talent” and that, my friends, is the true sweet spot of the War on Talent.

If you want to find out more about building your own company’s GOOD performance benchmarks, let’s talk. Set up a complimentary 30-minute meeting or email us at info@rodihr.com today.

rodi-hr

What is Performance Management and Why Does it Matter?

What is Performance Management?

What is the Performance Management Process?

Why is Performance Management Important?

What are the Challenges with Successful Performance Management?

Should Talent Keep C-suite Awake at Night?

Should Talent Keep C-suite Awake at Night?

Why? ﻿

What does “Talent” mean in Business?

What does “Talent” mean in Business?

Why?