Five Reasons Performance Management Processes Suck

OK – let me tone down that title a little. All performance management processes don’t suck, but most do – if you don’t believe me, just ask some of your employees.

Managing and improving performance is essentially about developing people – these are management and leadership skills that require continuous communication, coaching and feedback.
By creating a ‘performance management’ process (or worse an ‘annual appraisal process’) you are absolving management from a key part of their role. Essentially you are saying “Don’t think too hard, we’ll create a process that you can follow, and magical things will happen to performance when you’re done”
No good ever came out of a performance management system. What did you personally get out of your last performance review? Do you think HR rigorously go through each one and develop organisational development plans? Was your last promotion based on your review? Do you believe that organisational decisions are made based on your review? How much time was spent on the process?  Did it help YOU at all?
The process actively discourages tough conversations. Many new managers learn to rely on reviews as a ‘formal’ methods of giving feedback – instead of learning to deal with issues head on as they happen, respectfully and constructively. It becomes easier to make a note and bring it up during the next review cycle. This helps nobody, and eventually leads to a form of ‘incompetence paralysis’ in any company.
Eventually this builds a culture where managers only share the review with the employee during the meeting, an evil bullying trick designed to put the recipient on the defensive.
Invariably, the more process that get’s placed around performance, the closer you get to  the ‘happy hippy’ system – where everyone is doing just GREAT. I’ve worked with several companies recently who have less than 1% of their staff in the lowest bracket for overall performance.
Two points on solving this one – firstly don’t put a forced ranking in place, that will cause more problems than it solves. You might as well just start beating your employees with sticks – it’s kinder, and at least illustrates your intent in a more obvious way.
Secondly don’t under any circumstances add a ‘super duper brilliant’ achievement level above your top ranking because too many people are getting ‘excellent’ in their reviews. 
(You may be laughing at that idea, but I’ve seen it done many times)
Reviews are individually subjective. If you have a personality clash with your manager, that is going to reflect in your review – in most cases, because nobody takes any notice of the results anyway, it won’t matter. But it will make you feel unhappy, and if you decide to ‘appeal’, it will draw HR attention to the matter and use lots of time that could otherwise be constructively spent.  This works equally with the managers ‘favourites’ and is even more damaging. 
Want to measure how badly your systems suck? Try these three simple tests:
Check out the percentage of your managers who complete their reviews in the last 48 hours of the process window. Plot the number of completions per day on a chart and you’ll see a pretty curve. The steeper the curve, the more the system sucks.
(If you’re feeling a little more bold, you can also look at how many managers started their reviews AFTER getting the employees self appraisal……..there is nothing wrong with making edits based on submissions, but waiting for it before you start is a bad sign…..)
Look at how the overall performance rankings spread out (across the whole company) – you should see a normal distribution curve, low at the bottom, low at the top, and high in the middle brackets. It’s OK to see some positive leanings here – but you know you’re in trouble if you see this:
Check out how closely aligned your rankings lie with other factors – such as quota achievement, employee attrition, high potential leadership programs, training completion and so on. You should see a close match, if not, then consider that an alarm bell.
If you’ve made it this far, then let me offer some advice on some stretch goals for handling this problem (I’ll check back on progress in a year and hope you’ve done something about it – that’s our next scheduled review)……

Get rid of the whole thing. Teach your managers to continuously communicate, educate them on how to have uncomfortable conversations (try “Crucial Conversations” – Patterson et al), promote a more open and constructive culture within your organisation. 

Lose the idea of annual merit increases. This is where the whole mess began – higher performance should absolutely be rewarded, but lumping everyone together in a monolithic process and adding ‘other stuff’ just screwed it up. Either determine increases on career service anniversaries, or deliver them every quarter to 25% of your employees. 
You may not think this will work, your sales may ‘hockey stick’ at the end of the year and provide funding, your budget process is annual, it’s never been done that way etc. etc. But your employees will understand it, you’ll find it easier to plan for, and your shareholders will respect the predictability of the expense.
Finally have employees rate their managers performance. 

Yes, you read that correctly – reverse the process. The best feedback a manager can get is from those who work for them – you may have to make the process anonymous at first, but it will develop and grow your leaders like nothing else. 

I am not advocating universal 360 degree assessments (they don’t work organisation wide, though I’ll bet you use them occasionally for with your high potential leaders). Try something like this instead.

Recent Posts
  • The Jigsaw

    This comment has been removed by a blog administrator.

Leave a Comment