The subject is Performance Management, and in the past two issues of Touching Base we've considered the aspects of defining Critical Measurement Indices and Contracting respectively. Both of these are important foundation stones for effective Performance Management, the preparation without which no system will work.

In this edition, let's focus on the actual reporting and follow-through process – the tip of the iceberg.

My belief is that there are four key matters to be addressed – the Health of the business, business Growth, current Critical Issues and proposed New Initiatives, and it makes good sense to deal with them in this order. In addition, there are four major questions to consider within the first two of these, Health and Growth, namely the Target, the Actuality, the Variance and the required Action. In the case of Critical Issues and New Initiatives the essential questions center on assumed priorities and relevance to the business's success.

This provides the structure of a comprehensive reporting format which could be viewed either as a Status Report, a Variance Report or as a combination of the two. The content of each section is pre-determined – Critical Measurement Indices for the Health Report; Results / Outcomes / Deliverables for the Growth section; Critical Issues are defined by recent or current events of significance; New Initiatives will arise from taking a longer term perspective of the actions planned to deal with variances and/or issues.

The underlying purpose of presenting a Score Sheet is mutual peace of mind, an awareness that the business is either 'on track' or has a competent plan to 'get on track'. This generates confidence in the processes and allows for confirmation of organizational direction and impetus. It assumes that we are monitoring against a pre-set standard to determine both variance and relevance – equally important factors.

The real product of the process is corrective action. This can be either short term, a form of 'damage control', or longer term adjustments which are designed to be preventative.

In all this, it's important to recognize that perceptions determine behaviors. Each of the four sections of the Report address this issue from different perspectives. The essence of the first two sections is to confine attention on those matters that are truly essential to the business. In Critical Issues and New Initiatives perceptions are defined by selected priorities – hence only the 'top three/five' are listed.

Expectations are the predictors of future decisions. In the New Initiatives section there will be clear indications of a general shift in direction and impetus which may not be conscious even yet.

Finally, a variable reporting period can be used to spread the work load, signal a level of confidence, allow time for meaningful changes/implementation, and intensify / reduce the desired level of collaboration that will enhance personal development.

A Status / Variance report may well take appreciable time and effort to set up initially, but this is indeed time and effort well invested. The maintenance investment is minimal since it is only changes that need to be entered for each report. The true savings though is in the regaining of all that time now spent on matters of performance which is at best 'situational' and at worst destructive to the working relationship.

It may be worth a few moments more of your time. Visit the Andros website, Staying in Touch section, for a short case study and demonstration of what a pre-planned Performance Management contract and Status / Variance Report could do to assist you and your business.