The following is an overview and 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 and removed much of the research in order to keep this post shortish – check out the book (you can pre-order it from Barnes and Noble or Amazon) for the “full meal deal” – MTC
As I’ve written before, I’ve come to the conclusion that there are eight basic reasons that our old standby performance management process creates as much distrust, disengagement, and wasted effort as it indubitably does. In other words, eight reasons why traditional performance management is almost universally hated, and eight reasons why it simply doesn’t work. I call them the Eight Fatal Flaws.
Here's #4 and #5 of the eight.
Fatal Flaw #4: No man (or woman) is an island.
The focus is on the individual, even though system or organizational challenges often have a significant influence on individual performance.
Let’s tell a story here about Employee You. Suppose you’re in product development. At the end of last year, the organization put in a new system of checks and balances in order to provide better quality control of the end product. These checks and balances take a lot of your time, so your productivity has plummeted. Then there’s the additional rigor concerning product design that’s inhibited some of your usual out-of-the box creativity. But your end products comply much better with the company standard, and you’ve created some solid sellers. So, how does your manager respond to this mixed bag of results? How can he separate out what’s in your control (and therefore fair game for discussion) and what’s not? The answer is that he can’t.
Unfortunately, performance management is currently designed to focus on the performance of the individual and only the individual. The irony is that current research shows that the system (how work gets done in your company) actually has more influence than the individual can ever hope to have on the performance of both the individual and the organization as a whole. The situation, the environment, and the surrounding team are a large part of what makes a star performer. Meaning your company might gain greater benefit by focusing on improving the system than by trying to improve the individuals who make up that system.
Fatal Flaw #5: We are not machines.
Fairness and standardization in ratings and the judgment of performance simply cannot be achieved.
We are all human. Even the best and brightest among us are astonishingly fallible. Unfortunately, the traditional system relies heavily on the concept of an impartial, omnicient individual who can, without bias, unfailingly assess human output across a variety of roles and occupations. It’s a stretch to assume that even one such person exists, much less to expect that every manager possesses that kind of objectivity and wisdom. And it’s especially ridiculous when it comes to stack-ranking systems, or systems that require number ratings. I’ve seen rating systems that extend to two decimal places. Two decimal places?! Who in their right mind really thinks they can tell the different between a 4.35 performer and a 4.36? Yet in traditional performance management systems, advancement and salary decisions may very well rest on such infinitesimal and arbitrary distinctions. It’s ludicrous.
It’s the use of ratings that seems to draw the greatest ire from the critics of traditional performance programs. I’ve found that most tend to agree on five main points:
- It’s difficult to distinguish differences in performance, except in the case of exceptionally good or bad performers.
- The more diverse the job responsibilities, the more difficult it is to rate or compare performance. Someone working on a factory line putting two gee-gaws together to build a widget is a lot easier to rate than a manager of a large project with multiple responsibility areas. Then there’s the case of people with jobs that might look similar on paper (say, two management positions) but could nonetheless involve dealing with vastly different projects, stakeholders, geographies, vendor partners, or technology platforms.
- People will attempt to fix the results by manipulating and distorting ratings to get to a desired number.
- There is a whole host of biases, prejudices, and personal quirks that influence a person’s appraisal of others. While we think our ratings are telling us something about the ratee, they’re actually revealing far more about the rater.
- Even for those raters who are trying their best to remain unbiased and fair, it’s almost impossible to remember the whole year with equal acuity. It’s only human to put more weight on an event that happened just last month than on one that took place almost a year ago.
Houston, We Have a Problem
We know that traditional performance management isn’t working, and hopefully I’ve give you a pretty good idea why. The inherent system is broken, having been built upon unfounded, archaic, and poorly conceived assumptions—the Eight Fundamental Flaws.
And don’t worry if you’re thinking all this is rather negative - I’ll go more into how to fix things in future posts… I promise.
Until then, happy rebooting!
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