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Why No One Likes Your Performance Management Process

July 31, 2015

 

One of the first projects that I worked on as a budding learning consultant in 1995 was helping a Global 1000 company re-engineer their Performance Management (PM) process. They needed to get their PM bell curve to conform to expectations. It had moved too far forward, and the majority of employees were rated above average. The client decided to change the rating scale so that managers would interpret employee performance more “fairly” and thus move the curve back to the middle (where it was supposed to be).

 

Anyone who has worked with PM processes knows that this is just one of the common problems that organizations have when trying to manage PM. Others include objectively judging merit and bonus pay, gaining compliance with the goal setting and performance appraisals, and incentivizing and separating individual action plans from individual development plans.

 

I believe that organizations emphasize form over substance with their PM processes, and the resulting effect is a management activity that devalues and demotivates the entire workforce. Here’s what I mean by form and substance:

 

FORM

Administrative aspects such as process (e.g., rating and ranking).

 

SUBSTANCE

Aspirational aspects such as development, feedback, and collaborative discussion.

 

The PM processes that I am familiar with are overengineered and overreaching. There are too many layers of approval and administrative goals for it to be meaningful or applicable to most employees. The driving administrative goals behind most PM processes are to aid in pay and promotion decisions, identify poor performers, ensure accountability, and document performance in order to defend legal challenges. They do nothing to truly impact the performance of employees, and most people see the PM process as judgmental and punitive by design. In fact, a 2012 CEB Corporate Leadership Council study called “Driving Breakthrough Performance in the New Work Environment” showed that more than 75% of managers, employees and heads of HR feel that PM results are ineffective or inaccurate. The study also showed that PM ratings are not accurate predictors of actual business performance—that is, PM ratings have zero correlation with business unit performance.

 

We need to shift the balance to put more substance back in the PM process if we want employees to engage the process authentically.

 

Adding Substance and Aspiration

 

The main purpose behind PM is the development of a highly productive workforce. Not only is this a critical organizational imperative, but it is also what every conscientious employee wants. We all want to add value, feel worthy of investment, and be an important part of the organization. Employees are looking to the PM process to help them grow and develop capabilities, improve their communication with their manager, and produce better results.

 

In my experience, most PM processes focus heavily on static annual performance goals rather than flexible in-role developmental goals. This creates an absence of developmental dialogue between the manager and the employee. Instead of the employee feeling comfortable sharing what they are struggling with and asking for stretch assignments, the performance conversations revolve around hitting numbers and hiding inadequacies.

 

We need to break the mold of a PM process that is counterproductive and irrelevant to the employee experience. We have to stop focusing on just pre-fixed performance goals, and instead start to infuse aspirational energy into the PM process.

 

Here are some ideas on how you can get started:

  • Stop trying to improve your PM process, and instead re-invent it. In Brandon Hall Group’s “Performance Management 2015: Coaching for Development Needed” report by Laci Loew, organizations ranked the top three outcomes of PM as (1) improving overall business performance, (2) providing feedback in order to enhance employee engagement, and (3) improving managers’ ability to coach employees. In my opinion, most organizations could advance all three objectives just by getting rid of your current PM process.

  • Shift the focus of your administrative efforts away from annual goal setting, rating and ranking your employees, and pay decisions. Instead, focus your PM process on holding managers accountable for the development of their employees and aligning development activities to organizational objectives.

  • Emphasize the creation of personal developmental goals versus performance goals. Developmental goals are established with the explicit understanding that they are going to change as the employee’s capabilities increase. As the employee grows, the goal increases and becomes more complex. Developmental goals are subject to change with every meaningful conversation between the manager and employee.

  • Ensure that every manager becomes a coach and advisor. A core responsibility of all people managers is to develop their subordinates. Yet, there is little to no support or accountability to enable and ensure that this critical function is happening. This is more than a training issue. In my judgment, there needs to be intelligent learning systems that enable situational performance support for all managers.

  • Create the expectation that there will be frequent and meaningful performance conversations between managers and employees. Any relationship that has critical dependencies needs routine and honest unilateral communication to work properly. What works best is performance feedback that happens in the moment and is assessed routinely. It is absurd that we tell managers to be in constant communication with their employees regarding their performance and development yet we do not assess how often or how well this is happening. I think that we should have quick spot polls on goal progress at least monthly if not weekly.

 

The need for a new PM process is great. Are you ready to accept the challenge? You can learn more about a new way to conduct performance conversations in this infosheet.

 

About the Author

 

Randy Emelo is President and CEO of River, creators of an award-winning social learning platform.

 

Randy has more than 25 years of experience in management, training and leadership development with military, profit and nonprofit organizations both nationally and internationally. He spent 10 years in the United States Naval service, then moved on to work with profit and nonprofit organizations in North and South America.

 

Named a 2013 CEO of the Year by the CEO World Awards, Randy is a prolific author, speaker, and thought leader on topics related to collaboration, mentoring, social learning, and talent development. He has worked with hundreds of clients showing them how to blend formal and informal learning into an interactive, relational, and measurable process with social learning and modern mentoring. His new book, Modern Mentoring, was released in May 2015 from ATD Publications.

 

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