This question came up recently, from a man who was marketing a new product for a high-growth company. He was working with the product manager, as well as the marketing manager within the firm. Now, how does this guy prioritize his goals? What does he do in cases of conflicting instructions?
When your people are working in such cross-functional teams and are reporting to more than one person within the company, you are said to have adopted a matrix organizational structure. It has become a reality in the business world, where most businesses are trying to plug into global markets. Quick exchange of information, rapid response time, flexibility and cost savings are some of the advantages of a matrix organizational structure. Matrix organizations can make best use of their experts, equipment, and other resources by sharing them across projects.
Despite all the advantages that matrix organizational structure offers, it can be very difficult to manage. A Performance Management System (PMS) is essential for such an organization, because a matrix organizational structure may not have a clear reporting line. In matrix organizations, while employees do have a line-manager, they are assigned different projects and spend most of their time working under different project managers. Thus all employees have multiple reporting relationships – they report to their line-managers and also to project managers.
Performance management challenges in matrix organizations
The matrix organizational structure is typically found in project-based companies, such as infrastructure, construction, and technology services companies. Due to dual reporting, such organizations face challenges in evaluating the performance of their employees. These are some of the problems they face:
- » Periodically changing goals and roles for employees
- » Lack of feedback on employees’ work
- » Insufficient availability of employee performance data to allow managers to compare them to each other
- » Difficulty in identifying employees’ career development plans
The investment in an automated performance management system and clear communication of policies helps to mitigate this challenge. Before you implement a system for matrix organizations, ensure that it includes the following features:
Update of goals: Clear, measurable, and achievable goals should be defined for the employees on a project basis. The goals should be set with collaboration between the employees and the project managers. The goals should be updated periodically and must be tracked in real time.
Multiple appraisals: Rather than waiting for the end of the year, a performance appraisal should be initiated as soon as a project is over. The quick appraisal ensures fairness and accuracy. The employees or their project managers should be able to initiate the appraisal
Final appraisal: A final appraisal can be done for employees once a year, and during that appraisal, all the project appraisals should be seen by the line-manager. This allows the line-manager to gauge the employee’s performance across the year on multiple projects.
Involvement of project managers: The line-managers should involve the project managers in the appraisal process and get their feedback on employee skills, competencies and performance. The line-manager should be able to consolidate this feedback and share it with the employee.
View employee profile: The line-manager should have access to all of an employee’s career data. Since the line-manager is not working with the employee on a day-to-day basis, any strengths (such as rewards, recognitions, publications, nominations) and weaknesses (such as disciplinary issues) should be available. Additional data on the employee, such as skills development, training undertaken, projects worked on, additional responsibilities, and so on, not only help the line-manager to rate accurately but also help the employee in succession and career planning.
While matrix organizations offer your people unparalleled opportunities to grow and develop themselves, measuring and managing performance of your people can be quite a challenge.
What’s your story on managing these challenges at work?