Elevating Performance Management to its full Potential
The diversity of performance management: what really counts
Performance management is much more than simply assessing targets and performance. It is about how organisational goals are translated into individual objectives and how this affects both the material and immaterial well-being of employees. In recent decades, the understanding of performance management has changed significantly, oscillating between strict, mechanistic approaches and a focus on autonomy and purpose. The challenge lies in finding a system that is perfectly aligned with the specific culture and structure of an organisation. Which archetype suits your company? Find out!
The belief in the 'one right way' has led to frustration at all levels in many companies.
In many organisations, the belief in "one right philosophy" in performance management leads to widespread dissatisfaction - both among managers and employees. The definition of performance and its implementation are crucial for the success of the organisation and the well-being of employees.
"Performance management means breaking down corporate goals into individual targets and evaluating the results - always adapted to the specific culture and dynamics of the company."
Dr Florian Dressler
Partner
Would you like to delve deeper into the topic?
Organisational context
Over the last 30 years, performance management has moved between two extremes: the classic "carrot and stick" approach with narrow targets and rewards, and a more modern approach that emphasises autonomy and purpose. Both approaches have their advantages and disadvantages, but one thing is clear: the choice of the right performance management approach depends heavily on the specific corporate culture, strategic goals and the dynamics of the industry. A clear definition of goals and the right balance between control and autonomy are the key to successful performance management.
Archetypes
Depending on the company situation, different performance management archetypes can be useful. Whether you pursue a more structured, performance-oriented approach or focus more on behaviour and team dynamics depends on many factors. There is no "one-size-fits-all" solution; it is important to identify and implement the right archetype for the company.
Eight simple questions
When designing a performance management system, eight key questions should be answered: How do we define performance? Who is evaluated and when? How close is the link between performance and reward? How are individual development opportunities promoted? These and other questions help to create a system that meets both individual and organisational requirements.
Compensation & Benefits
A successful compensation & benefits system is based on well thought-out performance management. The question of how strongly performance should be linked to tangible and intangible incentives is crucial. The balance between short-term incentives and long-term development and reward strategies is particularly important.
Examples of our previous projects
Our expertise can be seen in numerous projects: From the comprehensive redesign of performance management systems to the design of customised compensation & benefits solutions and the implementation of new incentive systems. We have worked with leading organisations to develop sustainable and effective solutions.
Performance Management (Re-)Design
- Review and detailed redesign of the group-wide performance management logic with a special focus on talent management of a listed wholesale company
- Redesign of the PM system with a focus on simplification for managers (MBOs) and development of new feedback and evaluation formats for employees of a public infrastructure company
- Definition of the group-wide performance management process with a focus on individual development goals and opportunities in employee appraisals for a listed industrial group
Rewards (Re-)Design
- Conception of a standardised remuneration system for managers with differentiation according to target groups for an owner-managed real estate group
- Re-design of the overall remuneration system and development of a new remuneration philosophy and a rollout plan for target group-specific implementation for an IT consulting company
- Design of a long-term incentive to promote cooperation and long-term entrepreneurial thinking for a family-run retail group
- Redesign of the remuneration system for managers (STI, LTI) with a focus on entrepreneurship and "aiming high" incentives for an IT company
- Diagnosis and redesign of the executive remuneration system (STI, LTI) to promote growth, entrepreneurship, leadership and collaboration as part of the redesign of the Group performance management system for a global services company
Realisation
- Redesign and piloting of the new performance management and remuneration system for the R&D department of a pharmaceutical company, including the creation of communication and enablement materials
- Design and introduction of a standardised STI model for all managers of an IT company based on collective targets, including support with the necessary change management
- Revising and supporting the introduction of a new, strategically orientated LTI model for the senior management of an IT company
