Performance Management: Best Practices and Emerging Compliance Trends
Many pharmaceutical companies are experiencing a confluence of events - changes in healthcare delivery, healthcare reform, corporate restructuring or downsizing, external regulatory oversight, and negative public perception. This combination of events has resulted in many companies making changes to their business strategy and operations.
When a company makes strategic changes, many times they do not make the necessary changes that correspond to their performance management program. These changes are crucial to an organization because performance management programs communicate and reinforce desired behaviors which drive desired results.
The following best practices will help you examine and revise your Performance Management Program to ensure alignment with your current strategy and emerging trends:
- Review subjective and objective ratings to ensure harmony with corporate goals and overall fairness. To demonstrate fairness, all evaluation criteria must be based on factors that actually determine an individual's success in their role. This will prevent employee disengagement and potential compliance risks. For example, in the past, sales performance measures have included reach and frequency metrics and sales rankings. With the shift to customer-centric selling models and account planning with larger integrated healthcare delivery networks, the traditional metrics may no longer be considered fair or drive desired behavior(s).
- Determine if performance management metrics meet the shifting legal and compliance requirements. Recent court decisions and penalties demonstrate another area where pharmaceutical companies are under increased scrutiny - namely, for their sales force compensation practices. Glaxo Smith Kline (GSK) has recently approved the removal of all performance management ratings based on physicians' prescriptions to discourage aggressive sales tactics. Other companies are carefully considering whether to follow their lead - especially since this decision has been codified in their Corporate Integrity Agreement (CIA). According to Mary Riordan at the OIG, CIAs should be considered the new "guidelines" for government recommended practices.
- Ensure managers know how to evaluate and rate employees in a fair, unbiased, and consistent manner. Managers should know how to assign accurate performance ratings to their direct reports. Training should be made available to managers so they know how to rate performance objectively, understand possible rating bias and how to avoid them. Managers must be able to explain to their employees why and how their rating is a fair measure of their performance.
- Emphasize the importance of coaching and development throughout the performance management process. It is critical that managers create an environment where constructive feedback is regularly given and expected. Managers have direct responsibility to support the development of their direct reports. Training (with skill practice) on how to conduct coaching and developmental discussions should be made part of any Manager curriculum.
- Create a performance management process that is continuous, versus a "one time annual event." Many performance management programs emphasize events such as mid-year reviews and year-end evaluations. Instead, the process should emphasize the need for continuous feedback and discussion. Employees should not be surprised at these formalized sessions. Additionally, managers should have discussions with employees regularly to review their performance against established goals and development progress.
WLH has designed and modified the Performance Mangement program for many global pharmaceutical companies and has been listed as the consultant of record for post-settlement revision requirements.
Please feel free to contact Dr. Wendy Heckelman, President of WLH Consulting, Inc. for information on additional best practices and to help you reduce risk while getting the most value from your performance management efforts.
Wendy may be reached via email at firstname.lastname@example.org or by phone at (954) 385-0770 for more information.
Wendy Heckelman, Ph.D.
WLH Consulting, Inc.