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SHRM Offers Performance Management Standard

Employers large or small looking for help when it comes to launching or improving their performance-management strategy can now turn to the Society for Human Resource Management's latest standard.

Friday, February 8, 2013
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When it comes to performance management, size doesn't really matter. Everyone needs to do it right.

Employers large and small, in fact, historically have struggled with making sure they are getting the best out of their workforces. Yet, while no one will argue that effectively managing employee performance isn't critical to organizational success, the issue is how to do it consistently and do it well.

The Alexandria, Va.-based Society for Human Resource Management now believes it can help. SHRM recently released a basic Performance Management standard, one approved by the American National Standards Institute.

According to Lee Webster, SHRM's director of HR standards, the Performance Management standard, which is a free PDF download, gives employers a uniform way to analyze and discuss their employees' job performances, including goal setting and performance improvement plans. SHRM convened a 44-member taskforce comprised of HR professionals, academicians and consultants to develop the PM standard, which also went through two public review periods.

"This standard establishes a threshold of performance management practices that effective organizations should employ to adequately assess, improve and prepare their employees to deliver on organizational commitments," Webster says. "This document is the forerunner of other standards that will capture and describe these core practices of HR management."

The PM standard is the second ANSI-approved SHRM standard, after the Cost-Per-Hire standard, released in 2012. Additionally, the second public review and comment period on the draft of the Workforce Planning standard has been completed. In October 2011, SHRM and ASIS International – an Alexandria, Va.-based association for security professionals -- jointly released the ASIS/SHRM Workplace Violence Prevention and Intervention American National Standard.

Webster explains that the standards provide consistent methodologies and a common approach that HR professionals can voluntarily adopt. Also, they are not limited to HR practices. For example, the cost-per-hire standard can be used by organizations to determine employee-recruitment costs.

According to Cheryl Wyrick, associate dean and professor of management and HR at California State Polytechnic University Pomona, effective performance management requires focus in three specific areas, and these are the same areas that make up the bulk of the new PM standard:

*     Goal setting -- the process of establishing objectives to be achieved over a period of time.

*     Performance review -- the process of assessing progress toward goals.

*     Performance improvement plans -- the process of addressing a specific individual performance issue.

"Performance management is the foundation for organizational effectiveness for employers worldwide," says Wyrick, who served as associate taskforce leader (Susan Harmansky, Southern Graphic Systems Inc., served as leader). "Our biggest challenge was trying to create standards that could be accepted globally, when you consider the different countries, cultures, laws and practices worldwide."

Wyrick explains that while SHRM's PM standard offers specific strategies in those three key areas, over time the PM standard is flexible and users can always change it.

"You need to get the buy-in up front," she says. "Another challenge was to create a performance management standard that organizations of all sizes and types can use. Especially for smaller employers, you can't go from doing little or no performance management to having the bar set too high. Offering something that is very doable was our goal, and we believe we have hit that mark with the PM standard."

Wyrick says the SHRM task force constantly considered ways to give companies who may not be doing any formal performance appraisals a good starting strategy -- whether they are new entities or employers who need to "step up" what they are doing and make it applicable globally as well, if needed.

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"Of course, we had people on the task force whose organizations do much more than the standards. Some companies are very progressive," she says. "But we needed to offer a standard that all employers could follow, regardless of size or budget. In the end, having performance management standards will help an organization think more strategically."

Myrick adds that in many organizations, HR has the role of oversight and control of the performance management system. But, she says, the objective of successful performance management is shared by all members of management. Senior management support for a performance focus, for example, is critical, as is the creation and maintenance of a culture that supports individual and team accountability for solid performance.

While the PM standard is now official, in 2012 SHRM tried to formulate a Human Resource Indices for Investors standard, which was intended to help investors use metrics to evaluate the worth of a company's human capital. However, in response to opposition in the business community, SHRM withdrew the proposed standard on Nov. 29.

Other HR standards in the works for SHRM include Workforce Planning, Job Description, HR Metrics Panel (Dashboard), Turnover Metrics Definition, and Diversity. The diversity standards are divided into three sub-topics: organizational diversity and inclusion metrics, collection of diversity metrics and measures, and qualifications of the lead diversity/inclusion professional.

Tim Bartl, vice president of the Washington-based HR Policy Association, which led the opposition to the now defunct Investor metrics standard, says HRPA would not comment on the Performance Management standard, noting that HRPA supports the use of HR metrics internally to support the HR function.

"The investor metrics standard is what we focused on and we haven't taken a close look at the other standards," Bartl says, adding that the reason the Investor metrics standard became important was HRPA members looked at its purpose and believed it went way beyond using metrics internally for HR purposes.

"It becomes a question of whether it's facilitating the HR profession," Bartl says, "or is simply creating more touchstones for regulators."

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