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Frameworks for Effective Performance Management

Jul 27, 2020 | 7m

Gain Actionable Insights Into:

  • How to allocate time and resources to make sure everyone on your team is engaged
  • Expanding L&D opportunities for employees beyond just training
  • Keeping everyone in the company on the same page


Frameworks for Effective Performance Management

When it comes measuring performance, there are two frameworks that I find particularly useful. One is the ‘Performance and Potential Matrix’, and the other is known as the ‘The 70-20-10 Model for Learning and Development’. The former helps with talent placement and identifying who you should be investing more time and resources on, while the latter shows you exactly how to do that.

When looking at talent development, it is important for the senior management in your company to understand and identify which employees fall under the route of people management and which are individual contributors. These are different career paths, but both can lead to success. You should avoid putting an individual contributor into a talent management framework, where you view them as a potential manager. It is highly likely that they will not perform as well as you would expect. This can be worrisome and hinder progress, when in actuality, it was simply a matter of incorrect people placement.

For instance, while an employee can be the top performing salesperson in a company, this does not mean that they will also be the best at managing others. So you need to clearly identify where your talents’ strengths lie because clear differentiation upfront allows you to effectively leverage each person’s strengths and potential.

The Performance and Potential Matrix

This first performance management framework is also known as the ‘Nine-Box’ because it is made up of nine cells you place your talent in, beginning on the bottom left and ending with the top right cell, which represents top talent. This is a framework that we use to get an overview of our talent, identify them, and know who to invest our time and resources in.

The usefulness of The Performance and Potential Matrix lies in the fact that it identifies two important aspects to consider when you think about your talent. As the name of the framework implies, your first axis is labelled ‘Performance’ and the other axis, ‘Potential’. For performance, you measure a particular employee’s ability to meet targets and also categorise them as a top performer or underachiever in terms of their work. And then on the other axis, you rank the employee’s potential to move into the next one or two levels on the grid. The movement of employees on the matrix can also be a good way to assess what you are doing right or wrong as an individual or a company.

You want to focus on those with high potential and performance in the top right cell and hold on to them. They are your top talent. For those in the middle who may not have a lot of potential to grow, but are putting up good work, you can keep them there as the stable pillar of your company. But if they appear to have some potential, you will ideally want to help them move up to the top of the grid, which would be great for both them and the company. Those in the low performance and potential group need to be assessed against the matrix as well, with updates to see whether they have moved up the grid over time.

The reason why I view this matrix as effective is mostly because of the potential axis. It helps you to see beyond just their performance and evaluate their potential, much of which is related to soft skills. These are often undervalued or not given enough emphasis. But research has shown that for most successful managers, 85% of their success can be chalked up to their soft skills, since most managers would already possess relevant technical skills as well.

Make L&D Impactful with the 70-20-10 Model

The second useful framework is the 70-20-10 framework that helps in talent development. The model identifies how we best learn and develop, with 70% coming from experience, 20% derived from other areas like mentorship and 10% attributed to structured courses. This framework comes in handy when planning overall training for our employees, so we do not just provide structured courses which a lot of companies usually overemphasise on.

The 70-20-10 model shows how it is far more important and effective for employees to have greater exposure and chances to try new things in order to learn and develop. For instance, taking on additional projects or roles, or having cross-training assignments. These are direct experiences that you would want your employees to be having more because they gain the most and quickest out of them holistically.

The next 20% of learning happens with the help of others, such as learning through their project teams or work groups, or even a podcast. A lot of times more formal learning happens when a mentor or coach in the organisation is assigned to an employee, particularly top talent. It is difficult to have a mentor for every employee, but necessary for top talent to keep their learning going. Employees would already be learning from their direct manager, so the additional learning can come from somewhere else, be it another individual in the organisation, or an external mentor.

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Leon Yeo

Former Chairman and EVP, APAC

Wood Mackenzie



Managing Performance