20 March 2017

Why performance management is killing performance

Your performance management system may be doing more harm than good


Theoretically, performance management works. But in the real world, it’s such a complex and culturally-dependent phenomenon that “doing it wrong” could actually be killing performance.
 
Here’s why. We all know that performance management isn’t one single mechanism; true performance management is a holistic set of processes at every level and an organisational mindset that encourages staff to contribute to business goals. It includes learning and development, organisational development, evaluation, measurement and communications. And it’s because of this complexity that incorrect application can destroy performance.

You’ll know common performance management processes. These include:
  • Objective setting on an organisational, team and individual level 
  • Appraisal and feedback 
  • Reward
 
Some common problems with performance management systems include:

One size does not fit all
Assessing all staff against the same performance indicators or factors might make appraisal irrelevant, because roles, especially across large organisations, are very different. An HR manager will have very different competencies than, say, an IT specialist. Performance factors must fit the role.
 
Performance appraisal as criticism
Annual appraisals are frequently a key part of performance management and very often tied to reward. Mention the word appraisal and many people shudder. We’ve all been there. The creeping death of annual “appraisal”, thinly veiled as criticism, can be emotive, antagonistic or can even lead to indifference and disengagement. If appraisals are seen purely as judgment and not as a two-way opportunity to have a conversation about objectives and development, staff can disengage from the process.
 
Inconsistent appraisal
Good management is vital for a performance management system to work. If managers are inconsistent in how they approach objective setting and appraisals, then performance will be patchy throughout the business. Also, if there is no opportunity for staff to have their own thoughts and contributions, then the system is one-sided, top-down and disengaging.
 
Speed of change
Some industry sectors are changing so much that their performance management systems are outdated and ineffective. Strategies are short term, technology evolves, and organisations are becoming more agile in response to external influences. Performance management that doesn’t take this into account is always playing catch-up.
 
So how can you make your performance management system as effective as possible?
 
The key lies in maximising employee engagement. The focus is changing from measurement to ownership, from a top-down approach to a coaching model and from static, rare communications with staff (such as appraisals) to flexible, regular two-way conversations.
 
Motivation matters
Employee engagement happens when staff feel motivated to meet organisational goals. In his recent work Drive, Daniel Pink introduced the concept of motivation as involving three aspects: mastery, autonomy and purpose. Does your organisational culture allow staff to feel expert at their roles, able to make decisions, and that their work matters? Your performance management system can go some way to encourage this, through being flexible enough for managers to choose “the what” with staff having some say in “ the how” of what needs to be done.
 
Managers as coaches
Coaching is a collaborative process that allows managers and staff to work together to set short and long term goals, to discuss performance and to negotiate solutions to problems. Coaching is characterised not by micromanagement but through frequent conversations and check-ins. Coaching is agile management in action, a fluid process through which performance management is dynamic and focused on what’s important now rather than what was important a year ago.
 
From measurement to ownership
This two-way process created by a motivation mindset and a coaching culture can lead to increased employee engagement with the performance management system – a feeling of ownership of it rather than a feeling of being a “victim” of it.
 
If your workforce is more engaged with your performance management system then performance will improve. Having a more personal, agile system that responds to motivational factors as well as organisational objectives is the way forward for top performance in a world that won’t stand still.

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