Page 61 - Performance Leadership

50 • Part I A Review of Performance Management

Or consider a healthy relationship between a hotel chain and the
employee union. They do not have to be adversaries. They could meas-
ure results in terms of benefits achieved for their employees or mem-
bers. The employer provides salaries, the opportunity to round out
skills, and, more intangibly, a certain purpose for employees. Unions
should make sure their members are skilled and efficient employees,
and they could even be a preferred source for new employees.
Relations between stakeholders are ultimately based on trust and
shared values. Consider the example of a private bank outsourcing its
information technology operations. If the outsourcing company has a
very contract-oriented culture, and prides itself on a highly process-
driven approach to business, while the bank’s culture is based on flex-
ibility and an extreme customer focus, both parties will unlikely build
the trust that is needed to really work with each other.
Again, stakeholder relationships are characterized by having different
objectives. These objectives can be aligned to focus on the bottom-line
financial results between stakeholders. These objectives can also be
aligned based on power, by making the objectives of the most power-
ful stakeholder everyone’s objectives. But by understanding the type of
relationship, building the right level of transparency based on reci-
procity and trust, the different stakeholders seek reconciliation of these
different objectives, which is the strongest form of alignment.

Call to Action

Performance management has predominantly been a top-down exer-
cise for most organizations. The behavioral aspect has been missing.
There has been too much focus on reporting, justification, and support
for decision making. Management focuses on planning and budgeting,
controlling, problem solving and producing predictability, and order.
Performance management so far has focused too little on establishing
a common direction, aligning the different objectives of people, and
making sure this is still the case tomorrow and the day after. That’s
where the behavioral aspects come in. That’s where you need to under-
stand the cultural context as well as the positive and negative values in
your organization. That’s where you use metrics to drive the right
behaviors. This is how you grow from performance management to