These days most people in HR will agree that something needs to be done about performance management. I’m obviously one of them – I wrote a whole book on the subject –but I understand that for people who haven’t been living, eating, and breathing performance management for the last few years my blanket statement that it needs a wholesale change might not be enough. With that in mind I want to share exactly what I think IS wrong with it. And this isn’t just what I think: in my years of immersing myself in the performance management topic, I’ve read myriad studies; collected every bit of research and anecdotal evidence I could find; I’ve explored perspectives from various angles; I’ve listened to my clients’ experiences; and I’ve worked with companies as they set out to find something better. And through it all, I’ve come to the conclusion that there are eight basic reasons that our old standby performance management process creates such distrust, disengagement, and wasted effort. In other words, eight reasons why traditional performance management is almost universally hated, and simply doesn’t work.
I call them the Eight Fatal Flaws.
- Fatal Flaw #1: A theory without evidence is just a (bad) theory: There is no evidence that traditional performance management leads to improved performance.
- Fatal Flaw #2: Nobody opens up with the person who pokes them in the eye: Traditional performance management impedes the reception of feedback and limits honest dialogue.
- Fatal Flaw #3: Nobody remembers the good work: Performance reviews generally emphasize the negative, rather than focusing on strengths.
- Fatal Flaw #4: No man (or woman) is an island: The focus is on the individual, even though in reality system or organizational challenges often have a significant influence on individual performance.
- Fatal Flaw #5: We are not machines: Fairness and standardization in ratings and the judgment of performance simply cannot be achieved.
- Fatal Flaw #6: We are not machines, redux: Review output is unreliable for making talent decisions.
- Fatal Flaw #7: Let me introduce you to your competition—now play nice together! Comparing people against one another erodes efforts to create a collaborative culture.
- Fatal Flaw #8: We are not Pavlov’s dog: Pay for performance does not deliver improved performance.
Do I have your attention? Let’s take a closer look at Fatal Flaw #1.
Fatal Flaw #1: A theory without evidence is just a (bad) theory.
There is no evidence that traditional performance management leads to improved performance.
I think we can safely assume that the expected outcome of the time, resources, and energy we invest in performance management is supposed to be improved performance, both for individuals and for the organization. Yet I’m going to tell you straight out that there is no sound evidence that supports this idea. In fact, impact is often counterproductive and utterly at odds with its core purpose.
Why? Well, people who are engaged make for higher-performing organizations. But performance management as we know it is not increasing morale, and it’s not driving engagement. If it was, we would see an increase in employee morale correlated with the expanded usage of conventional performance management. And we simply don’t. In fact, the data shows that the process is far more effective at creating disengagement.
The brutal truth is, we’ve built old-school performance management on beliefs about how to motivate and improve human performance that we’ve proven to be faulty. Best intentions, wrong tactics. In the pursuit of recognizing differentiated performance, we’ve created unhealthy competition and opportunities to game the system. We’ve built standardized processes and policies in the pursuit of fairness, but what we’ve wound up with are mind-numbing tick-the-box exercises that minimize the human side of a process that should be all about people. Seeking to drive manager-employee communication, we’ve trained people to time-box conversations that should be sought openly by both parties and that should happen in the moment. Dialogue that should be ongoing is instead relegated to a prescribed place and time with a defined agenda that too often creates an adversarial or banal tone. In the interest of accountability, we encourage people to set specific and aligned goals, but too often this system rewards those who undercommit and play it safe.
See where I’m going here? There’s no good reason to continue using techniques that have been shown scientifically to be unproductive or, in some cases, even counterproductive. It’s time to make our good intentions stick by switching to methods that have been proven to increase engagement – and therefore drive real and sustainable business performance.
Until next time, happy rebooting!
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The previous was one of the Eight Fatal Flaws of traditional performance management from the book, How Performance Management is Killing Performance – and What To Do About It , due to be published in early March. I’ve condensed the content quite a lot, and removed much of the research, in order to keep this post shortish – check out the book (you can pre-order it here) for the “full meal deal” - MTC