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As a leader, one of your primary responsibilities is to develop the capability and commitment of the people on your team. That development should occur formally, through the human resource process, and informally, through your everyday interaction.

People are the source of your team's competitive advantage. Your success will depend on the performance of your people. In the end, they deliver the results. Your mindset is important: consider two fundamental elements of performance management.

n People are an asset, not a cost. What are you doing to make the assets more efficient? Where can they add the most value?

n The "what" and "how" are both important. Your approach should not only emphasise performance to metrics (the "what"), but also performance to behaviours and competencies (the "how").

Companies use formal performance-management systems to set goals, reinforce behaviours and identify future leaders. Periodically, as part of the appraisal process, both the employee and manager meet to review the employee's performance against the defined goals and behaviours.

Most new managers dread the performance-review process - writing the appraisals, confronting a poor performer, or aligning an employee's judgment to how they are really performing.

But, it should not be that way. If you wait for the yearly appraisal process, it is too late. The build-up accentuates the discomfort. It needs to happen much more frequently; hence, the informal process.

Informal performance-management processes are really all about using your daily interaction with your team to sharpen focus and reinforce behaviour. Behaviours that are contrary to the company culture should be confronted immediately. In many instances, the employee may not realise there is a problem. This typically happens with "the how". An employee may feel, "I delivered the results, why does it matter how I interacted with my teammates?" As a leader and manager, you need to reinforce the behaviour you want - every day.

Managing performance is a two-way street; both the employee and the company are completely responsible and accountable.