Better Ways to Conduct Performance Management

by: Fredia Woolf Tuesday, April 5th, 2011

Last week, we looked at some myths about Performance Management that reflected both poor performance and poor management.

Today, we will discuss how traditional approaches to Performance Management are not necessarily the best ways to judge employee effectiveness or to encourage improved performance.  We will also discuss a simple, innovative tool that can turn Performance Management into a means for harnessing employee energy and motivation, for helping increase employee engagement and performance and for more effectively achieving organizational objectives.

Performance Management in many organizations has a single component: the performance review.  Some organizations have a process allowing employees to make cases for themselves and to write up self evaluations of their own performances.  More sophisticated organizations have rating systems administered out of Human Resources in which people are polled about whether an individual is exceeding expectations, is meeting expectations or needs improvement in various areas.  But, at the heart of it all is the once-a-year conversation between manager and employee in which one employee is judged by others — all of whom are flawed human beings with subjective views of what constitutes “performance”.

The problem with the performance review and a Performance Management system conceived and executed in this way is multi-fold:

  • It often has an after-the-action and generalized focus, so comments are not meaningful.
  • It is a highly subjective evaluation, and it reflects the manager’s level of comfort with the person and the process more than a true assessment of the person’s contribution.
  • There is often a tendency to focus on what was wrong more than what was right, and, even when there is an appreciation of strong performance, there is usually little analysis of what made it so and how it can be further strengthened or taught to others.  Where there is a shortfall relative to expectations, disappointment and disapproval usually replace engaged, constructive, meaningful development-oriented feedback with specific, practical suggestions for how to do better in the future.

Specialists in the field of Performance Management are trying to introduce new methods to turn this around.  A consulting firm, Aberdeen, writes as follows:

“With the majority of organizations realizing that business performance is directly tied to group and individual performance, pressure has increased to implement automated performance management processes. Aberdeen has identified key, required actions that include involving all employees in the process, reinforcing annual reviews with ongoing meetings and using multiple reviewers to ensure rounded results.

Findings show that the shared characteristics of best-in-class success include:

  • 77 percent of managers involve employees in goals definition.
  • 70 percent of organizations have standardized performance review ratings.
  • 68 percent of employees connect individual goals to organizational goals.”

Academics and individual experts such as Samuel Culbert, who recently wrote in the New York Times, support these findings:

“I’ve examined scores of empirical studies since the early 1980s and have found no convincing evidence that performance reviews are fair, accurate or consistent across managers, or that they improve organizational excellence….Is there a way out? I believe there is, and it works for both government and business.  It’s something I call the performance preview.  Instead of top-down reviews, both boss and subordinate are held responsible for setting goals and achieving results.  No longer will only the subordinate be held accountable for the often arbitrary metrics that the boss creates.  Instead, bosses are taught how to truly manage….Instead of the bosses merely handing out A’s and C’s, they work to make sure everyone can earn an A.”

If the Performance Management mindset is shifted from one of unilateral judgment to one of collaborative goal-setting and development in which managers act as coaches helping people to do their best and achieve their potential, it is my belief that performance at all organizational levels will soar.

Fredia Woolf, Founder of Woolf Consulting, writes about career and workplace issues.  She coaches leaders on how to reach their people, their goals and their potential, and designs programs for organizations to enhance their effectiveness and the quality of their leadership.  She can be contacted at fwoolf@woolfconsulting.com.

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