Why Your Performance Management System Isn’t Working

No matter what you do, it somehow always falls flat. Heaven knows this isn’t because there is a dearth of tools out there. As a matter of fact, the number of tools in the market creates more confusion than actually solving this evergreen problem.

Thousands of consulting organizations offer their expert guidance in improving performance management systems, yet most companies barely get the results they want. Are we doing it all wrong?

Let’s explore.

You Are Focusing Too Much On Individual Performance

While it is true that every individual employee’s contribution matters and should be measured, what gets forgotten in most cases is that everyone’s contribution is always in relation to the team he is in. The world is also moving towards teams and networks within teams.

Performance management systems that measure performance only at an individual level keep employees busy in their own domains. Sales reps have quotas to meet, marketing guys have numbers to show, etc. In doing this, they really don’t bother about larger organizational goals.

For example, someone in production will only look at efficiency metrics, completely ignoring customer satisfaction. Or someone in marketing will write about the latest product, without learning from the sales team how customers are actually responding to it, and what can be added in marketing language to create more value. The result of such an individualistic view creates organizational confusion. Individual employees always focus on their own goals and cross-functional collaboration goes missing.

This needs to be replaced with a common goal that everyone aims at achieving. Such management helps teams collaborate and communicate with each other, learn from each other’s knowledge and experience, and also creates bonds. Each department or team needs to have the same focus in mind, and build on sub-goals accordingly.

A very good example of this is of a delivery truck driver at a Midwestern wholesaler of formal wear, whose performance would normally be measured on individual metrics such as punctuality and efficiency. This driver understands that his company’s key challenge is sales as told to him as a common goal. He overhears an argument of one of his competitors that there is a quality problem there. Based on this information, the company executes a sales campaign targeting this competitor. Sales revenues increased by 40% as a result.

Bygones Are Not Bygones

Performance reviews are all about opening the Pandora box of past achievements and mistakes. So much focus on what has already been done and dusted months ago makes the entire activity futile and unpleasant. This is true for both employees and managers as the accurate details go missing, and the discussions rely mostly on subjective biases and lapsed memory. In most of the cases, peers know more than the managers themselves.

Highlighting failures of the past affects the self-esteem of employees and can also hurt them emotionally. Employees may also lament that the performance reviews have not covered their accomplishments which they remember. The end result of this unfair and inaccurate analysis might result in damaged relationships and perceptions of employees and managers towards the organization.

The key is to ensure that communication and feedback take place at a regular interval and is genuine. A strict system needs to be defined that everyone follows at will and gains out of. It shouldn’t be a burden on the manager or the employee when asked to meet twice a month to discuss progress on ongoing and upcoming projects.

Regular team meetings that clear the air about doubts and creates a transparent atmosphere about information, products, new clients, etc. can also help employees feel wanted, provided they feel safe enough, and are encouraged to voice their opinions and share their ideas.

What About Motivation?

According to Gallup’s comprehensive report called the State of the American Workplace, only 21% of employees agreed that their performance is managed in a way that motivates them to deliver their best at work. There are a lot of issues when it comes to instilling that feeling of personal motivation among employees to feel truly connected to and inspired by the leaders in their organization.

It is no secret that engaged employees want to continuously develop themselves while on the job. Without a lack of purpose or a sense of attachment to company vision and leaders, employees are likely to lose focus and look out for jobs elsewhere.

Current systems of performance management mostly fail to convince employees and teams that their contribution matters. Employees need to believe that they make a difference, can move the needle, and are vital to change the game. All this needs to be included in the job description and be told repeatedly.

Employees need to be coached and reminded of who they are in the organization, how their role is crucial to achieving common goals, who the customers are career growth opportunities, and more along with just the performance metrics.

Goal management is also a concept that seeps in here to offer more clarity. Realistic goals need to be set continuously so that employees are not left confused and directionless. Managers also need to be available for their employees as and when the need arises. Be it providing learning tools for employees, coaching them on real issues, recognizing and rewarding employee performance in formal and informal ways, or offering genuine feedback on activities. Only when managers define all these strategies clearly can they help contribute to achieving organizational goals.

You’re Not Giving Importance To Cultural Values And Norms

Your workplace culture defines the values and principles it upholds and translates into its products, services, interactions with clients, and peers. A fundamentally flawed picture of this can lead to employees being confused about their own visions, let alone the organization’s goals. Such feelings will one day make them quit.

If culture is not paid importance to, it can create barriers to having high performing employees. For example, if people know that their initiatives are not going to be valued before the layers of approval are sought after, they will not be motivated to go about their ideas. If culture interferes with the success of employee initiatives, it will create an unhappy workforce.

Core values are the ones that define standards for conducting interactions and business with each other. These values need to be kept in mind while going to work on a daily basis and should reflect in all kinds of practices taking place within the workplace. For example, the way employee performance is measured should be guided by similar values in determining productivity and improving skills.

Once the core values are set for the various organizational practices, the next step is to communicate the same to the entire organization. The trickle-down effect will not work until employees across levels are made aware of these values. And it is also not a one-time event where a PowerPoint presentation is forcefully skimmed through. Steps should be continuously taken to help employees understand the new values and make this as easy as possible.

Cultural values need to be backed up by leaders and they need to set examples through their behavior and interactions for the rest of the staff to learn from and follow. And for those employees who perform with values in mind need to be rewarded regularly to keep the practice alive and motivate the rest to do the same.