Performance Management Sings the Blues – It’s Broken, How to Fix It

Most companies and their employees sing the performance management blues. Employees hate it, few CEOs support it, fewer managers do it well and it doesn’t necessarily improve performance. Then, why do it? It’s time for a change.The Problem-it doesn’t work Here are a few startling statistics from the WorldatWork: Study on The State of Performance Management.

Only 10% of employees feel middle management champions it

Only 12% of employees feel top management view it as business critical

Only 30% of employee trust their company’s system

58% of employees give their company’s procedures a C grade or lower
And, Reuters says, 80% of employees are dissatisfied with their performance reviews.Studies don’t tell the whole story. Here are a few examples of what I have heard from working in companies across four continents and a variety of industries.

My boss doesn’t know what I do, but once a year he is going to rate me?

Why bother, for a 2% increase? We didn’t do ours this year. Everyone received a cost of living increase and a gas gift card.

Too much work online with our performance management tools, and it doesn’t relate to the job.

It is really about whether or not the boss likes me. If she does, I’m good.
Employees and managers alike tend to hate performance management and the reviews that go with it, mostly because people hate giving and receiving feedback.One executive responsible for $500 million in business shared with me that the best rating his boss gave him was a 3.2. He told his boss, “If you can’t give me 5′s you should fire me.” His boss responded that “he was just a tough grader.” I say, that’s bogus! The major problems with performance management is that it comes down to the review, the rating and the reward.The WorldatWork study said, “The top goal of performance management… is differentiated distribution of rewards based on individual performance.” I think that’s bogus, too! Shouldn’t it be about increasing performance? According to SHRM Foundation, Building a High-Performance Culture: A Fresh Look at Performance Management, “Performance management is the “Achilles’ heel” of human capital management-often viewed as ineffective by employees and managers alike. Despite the time, effort and resources devoted to it, performance management rarely achieves its intended purpose-improving performance.” Today, managers are focused more on completing their performance management procedures online or filling out the form, than in having a high-value conversations with their employees. In other words, they see it as another administrative task that they must check off! The system is broken; few people value it and it needs to be fixed!The Solution-use it today! To begin: communicate, communicate, communicate. This means start with your team planning by including your employees’ involvement and input. Follow this up with one on one conversations with each employee. Do it informally, without a form, or an evaluation, or a pay increase looming on the horizon. Just discuss the employee’s job and have a dialogue, not a monologue. Review job priorities, strengths, areas to improve, key goals and plans. The manager should begin by asking the employee well thought out questions about the key areas identified above. The manager should listen, add feedback and give guidance as the conversation moves forward. The manager and the employee should each take notes on the discussion. This process alone will begin to improve performance. Why? The employee and manager will begin to come together and develop clarity about key goals, priorities and expectations. It will allow them to collaborate through a simple, straightforward and sustainable approach.In fact, regardless of the type of performance management system your company has, any manager can begin to improve it today. This Performance Coaching methodology has power through regular one on one communication conducted monthly throughout the year.The Corporate Leadership Council’s report, Driving Performance and Retention through Engagement shows that the leadership approaches that help employee engagement are also important in performance management. These are: “setting clear expectations, helping employees accomplish work, providing regular feedback, and finding new opportunities for employees to succeed and develop.” According to a McKinsey global survey, these kinds of practices are more effective than financial incentives but less used by managers. Pat Riley, author of The Winner Within, said it well,”A coach must keep everyone on the team in touch with present-moment realities – knowing where they stand, knowing where they’re falling short of their potential, and knowing it openly and fairly.” To be effective, managers must be trained and mentored to ask good questions, to give and receive feedback, to coach and to write an effective plan. These are already issues. Why not invest less in the technology of performance management, and more in the people who supervise the employees–and make the biggest impact on their results?

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