‘There are more tools available to mess up the process,’ says expert discussing how to do proper measurement
Performance management is widely seen as one of HR’s most powerful tools — but proving it is working is another story, a new study finds.
While many HR leaders (89.4 per cent) say performance management improves organizational outcomes, only 44 per cent can provide a metric to back that claim, according to a 2026 BetterWorks study of 894 business and HR leaders.
When it comes to showing clear business results to the CEO), only 43.9 per cent say they could.
So, how can performance management be meaningfully measured?
Jamie Gruman, organizational behaviour professor at the University of Guelph, says the issue comes down to understanding how and what to measure.
“Of all the topics that have come up in my career that managers and executives have had the most trouble with, it might be measurement. They have a very difficult time getting their head around how to measure,” he says.
Performance management vs appraisal
The first step toward fixing the measurement problem, Gruman says, is understanding what performance management entails. Unlike performance appraisal — a periodic check-in — performance management is a broader, ongoing process.
“Done improperly, it becomes a once-a-year or once-a-quarter meeting where you sit down and discuss how the employee is doing,” Gruman says. “That’s not an effective way to run the process.”
What it should look like, he says, is daily, casual check-ins — asking how someone is progressing, flagging where they are struggling, and offering help.
“It’s the process of managers being available to coach, develop, and assist people when they’re having a tough time,” he says.
“To keep them informed about priorities, to redirect them if they’re falling off track.”
Why tools create more problems
Traditional models have never worked well — and technology is making things more complicated, not less, Gruman says.
“In some ways, performance management may even be getting worse than it was in the past, because there are more tools available to mess up the process,” he says.
He points to salespeople as an example, where technology can now monitor mouse clicks and track how often someone logs in to make calls.
“I’m not an advocate of treating people like children, and I’m not an advocate of objectifying and dehumanizing them through technology, which is happening more and more,” Gruman says.
Measuring what matters
Gruman says effective measurement comes down to one question: what can we track that tells us whether someone is performing well?
For a salesperson, that might be sales. For a computer programmer, it might be lines of code written per day.
With any measurement system, Gruman says employers should make sure their measures are valid and free from bias. He points to two types of indicators every system should have that includes lagging indicators and leading indicators.
Lagging indicators, for example, capture outcomes such as whether a sale was made or a target was hit. Leading indicators capture the behaviours and actions that get someone there.
“In economics terms, that’s a lagging indicator: it’s done, they sold or they didn’t,” he says. “But there are also leading indicators. How many new people are they meeting each week? How many cold calls or warm calls are they making? Those aren’t the ultimate outcome you’re looking for, but they lead to performance.”
Measurement should also not include things outside of people’s control, Gruman says.
“If you’re selling beer and in one territory, they drink a lot while in another they don’t, but everyone has the same percentage increase target for the year — that’s not fair,” he says.
“Even with an objective measure, the process can be unfair.”
Gap between measurement and real metrics
The gap between measuring performance and producing real metrics often comes down to two problems, Gruman says, ands its “criterion deficiency” and “criterion contamination.”
Criterion deficiency happens when something important is left out of the measurement entirely.
“Say you want to measure sales — but maybe sales is only part of the job. Maybe people also need to be building relationships. If you don’t measure that, you have criterion deficiency: something important that you’re overlooking,” he says.
Criterion contamination is the opposite — when a measure captures factors that have nothing to do with the job.
“It comes back to the art and the science of measurement. You don’t want a measure that’s contaminated or deficient, because then you’re not actually measuring what’s important to produce organizational outcomes,” Gruman says.
While new technologies such as AI might have found ways to help more with monitor, the performance management issues that were once there haven't gone away.
“The job has changed. Technology has allowed us to monitor people in new ways, and that creates new problems. It's not a panacea. Not all of our problems are solved because of AI. There are new opportunities, and there are new problems. The management of that — which is what management is all about — has simply changed. The performance management issues haven't gone away, he says.
Gurman explores these themes further in the second edition of book, Concise Introduction to Employee Engagement published this year.
