Performance management may not be popular but it can work wonders – if done properly
People usually see performance management in one of three ways: It works and is a useful management tool, it is broken or it is a mistake.
Adherents to each of these views see little common ground among them, which makes it difficult to engage in a dialogue that might allow consensus to emerge. In turn, these competing views can leave HR, usually the holder of performance management systems, in a quandary. It’s almost guaranteed HR is going to come under fire from managers with such competing views, with lots of smoke and noise.
3 views
It’s broken: People who hold this view are bewildered about why it doesn’t work, and it definitely fails to meet their expectations. This view is not a dismissal out-of-hand of performance management but involves doubts about its effectiveness. If only the problems with it could be solved, the assumption is it would be a valuable management tool.
It’s a mistake: People who believe any attempt at performance management is a mistake reject the process completely. Partisans of this school of thought believe people do not like receiving feedback on their performance. Any feedback, good or bad, is a negative experience and is neither wanted nor needed.
It works: Then there is the perspective performance management works — when it is done properly. A badly designed or poorly executed performance management system can quickly give rise to the view the process is broken. And if a process is broken, and does more harm than good, it’s a pretty short step to saying performance management is a mistake.
The argument around performance management sounds very much like the old quarrel in psychology between nature and nurture. Eventually, research, and a little common sense, resolved that argument by recognizing both genetics and environment play a role in human behaviour.
Once that deadlock was removed, better progress could be made in understanding people and their behaviour. Perhaps the same progress can be made with performance management.
The heart of the matter
One way to achieve greater clarity on the topic is to distinguish between performance management systems and performance management. Organizations may spend a good deal of time in designing performance management systems, and even more in trying to get managers to use them.
But it’s not the particular configuration of any system that really matters. What lies at the heart of performance management is people have the opportunity to understand how their work efforts are seen. The mistake lies in providing that information only in annual reviews.
Employees may choose to accept or reject performance feedback — it is entirely up to them. If the feedback does not ring true, people have a chance to challenge and discuss such perceptions. If the feedback is in the right neighbourhood, employees can work with it constructively. To deprive them of these opportunities is to withhold information that is relevant to them and treat them as less than adults.
There are employees who do not want a review and, no doubt, they make their complaints heard. An annual review with them may be a mistake if they are unable to benefit from it.
Yet allowing people to opt out of a performance management system is not the same as failing to provide them with useful performance feedback.
A greenfield experiment
Underneath the divergent views about performance management is a common theme: It’s tough to evaluate the benefits. It’s been around for a long time but is it beneficial or is it just a tradition?
There is solid evidence it makes a contribution. I had the opportunity to introduce performance management within a large unionized workforce and discovered some intriguing outcomes. (See sidebar for information on the central findings of the workforce before and after performance management was instituted.)
What the project showed, beyond doubt, was performance management can work. Both employees and supervisors gained a better focus on business needs and standards, and how to meet or exceed expectations. People who worked at different jobs in the same location could see connections between their roles, which improved teamwork.
Development plans were put in place and supervisors saw the benefit of leading people whose skill levels began to improve. Employees liked receiving feedback and many of them said, “It’s about time.”
It was clearly the performance management system that triggered these benefits and created the chance for better communication between levels on a daily basis. It is, after all, day-to-day performance management that counts, whether it is feedback on the fly or more targeted coaching.
It’s figuring out how to encourage performance management to escape the confines of an annual evaluation that is tricky.
So maybe it’s not that performance management is broken — perhaps it’s managers just don’t translate the process into daily use. Nor does it seem most people dislike feedback, as long as it’s perceived as useful.
Is performance management perfect and does it always work? Unfortunately, no. But to get to any destination, a first step is needed. Perhaps it’s time to retire the arguments and recognize each view has some merit but they do not provide the whole answer.
Les Dakens, former senior vice-president of HR at CN Rail, is a principal with Pineridge Consulting in Toronto and author of Employee Performance Scorecards: Creating a Win-Win Formula for Your Organization, published by Carswell. He can be reached at (416) 529-4149 or [email protected].
Case study
The case for performance management
Before performance management
• Positive feedback was rare and had little meaning.
• Negative feedback was the rule, encouraging people to avoid leaders.
• Performance standards were not understood by supervisors or employees.
• Supervisors were unaware coaching was part of their job.
• Supervisors were seen as not listening.
• Employee participation in the stock purchase plan was 30 per cent.
After performance management
• Positive feedback was explained — and shaped further good results.
• Negative feedback came with a remedial plan.
• Performance standards became well-known — and people wanted to meet them.
• Supervisors learned how to coach and get the best from their people.
• Supervisors opened communication lines.
• Employee participation in the stock purchase plan went to 70 per cent.
