An effective performance management programme is supposed be a strategic business tool that drives productivity, engagement and compliance. Unfortunately bad performance management costs a lot and delivers very little.
A dynamic performance management process impacts all key business metrics (including return on equity and revenue growth) so it’s surprising that so few organisations get it right.
The key obstacles to effective performance management are:
- A tenuous link between strategy and day-to-day behaviours. Though the organisation may have beautiful sounding vision, mission and values statements, few employees know how it translates into everyday behaviours. They are unsure how their everyday work contributes to this lofty set of ideals and they are unsure how the goals set for them link to their personal success.
- Poor scoring. Performance reviews are often focused more on the score than on the individuals’ strengths and weaknesses. This combined with the Idiosyncratic Rater Effect means that the scoring is almost meaningless. How can you expect people to develop when they are punished for making mistakes rather than learning from them and growing competency?
- A focus on a check-box process vs difficult conversation. Holding an effective performance conversation require guts. Managers can be reluctant to have these difficult conversations as the fear “rocking the boat” or are unskilled in the best way to run them. When unsure many managers seek harmony (or being liked) and simply follow the process, treating it as a check-box exercise with little relevance to anyone outside of HR.
- A lack of hope. Feeling like you are growing and moving forward are essential for high engagement and high performance. Unfortunately many people who have been in same role for an extended period, feel a lack of hope about their future. Many mangers who do not utilise recognition and are limited in compensation to a leadership hierarchy lack the tools and confidence to inspire these downhearted employees.
- Misaligned responsibility for performance. We can inspire and support development in others, but we often forget the individual has to take responsibility too. As a manager we play an important part, but ultimately each individual has to be accountable for his or her performance and future career.
- Limited economic incentives. There is a tendency for organisations to pay more attention senior-level incentives. While understandable, it is best not to neglect real and appropriate incentives for employees across the organisation (if you expect them to be engaged and committed to your success). To avoid be too costly the program has to be carefully structured to ensure maximum impact. This requires understanding which rewards work for which people. One-size-fits-all incentives do not work. Intrinsic rewards (non-monetary) often have a greater impact than cash rewards (once employees have reached a decent base income). These rewards need to be clearly defined and linked to development, performance and achievement of specific targets. Even though the form may vary the value may be benchmarked to ensure fairness.
- A lack of regular constructive meaningful feedback. Feedback is a foundational management skill. To develop your teams we need to be able to provide regular, helpful feedback to employees in a manner that encourages (not discourages) the right behaviours. This feedback is not always positive, but does need to be delivered in a positive thoughtful manner, regardless of whether as encouragement for a job well done, or a difficult course correction conversation.
- No respect for individuals and the job they do. Respect can be a simple but powerful motivator, while a lack of respect has the opposite effect. When we feel genuinely respected and acknowledged for specific contributions we are much more likely to go “the extra mile” to help our organisation succeed.
- A lack of adequate training. Many organisations invest heavily in training for organisational leader, while far less is spent on supervisors and middle managers. This leaves developing leaders unprepared and unsupported when they need it most. Leadership habits are forged throughout our careers, not just when we reach a senior level.
- Human support is often missing. As human beings we need various types of support though our day. We need the right equipment, the right training, collaboration, encouragement and emotional support when we face tough times. The support from managers, colleagues, family and friends often can make a large difference when we are under pressure. A lack of support in one of these critical areas can disengage us quickly. Management support in times of need isn’t easily forgotten; it helps builds loyalty and increases engagement.
- A lack of praise and acknowledgment. There’s nothing for management to gain by withholding deserved praise and recognition. When polled about recognition most people feel they do not receive enough, and though many recognise the importance, most admit they don’t give much recognition either. In fact for many employees recognition is a more powerful motivator than money alone. According to Daniel Pink (Drive) financial rewards can deliver a short-term boost (like caffeine) but the effect wears off and, even worse, can reduce our longer-term motivation. Even for senior leaders there is a cap on happiness created by more money. According to a study by Princeton University’s Woodrow Wilson School, money does buy happiness up to about $75,000 per annum, but after that has less impact on day-today happiness. After that leaders are more motivated in an increase in status, acknowledgment and meaning. An increase in warranted praise and acknowledgement can have a substantial impact on productivity across the organisation.
- The wrong values and behaviours are modelled. When senior leaders act in a way that goes against the organisations stated values and ethics employees across the organisation quickly become demoralised. Employees need to respect their leadership, even if they don’t need to agree with everything they say or do. Senior leaders who live the organisational values and purpose inspire a respect in employees that can energise and engage them. Leaders are always being watched, judged and copied. People do what we do as leaders, not necessarily what we say. When leaders “walk their talk,” it will be emulated, but when they act incongruently it can lead to reduced trust and embed bad behaviours.
Change Communication and Employee Engagement specialist at One Clear Message Consulting
Richard specialises in helping you build real human communication skills. Employee Engagement / Experience, Emotional Intelligence skills, building high performance teams and a great place you want to work. TED style speaking and presentation skills. Training, consulting and coaching.
Latest posts by Richard Riche (see all)
- Harnessing the power of psychological safety at work - 2 January 2019
- 5 keys to creating sustainable continuous improvement - 19 November 2018
- Using organisational voice to support Change Communication - 28 September 2018