What We’re Still Getting Wrong About Performance Management

Performance management has been part of the business landscape for so long that many companies have lost sight of the outcomes they expect to achieve through the process. In fact, most performance management processes have multiple, conflicting intentions. On the one hand, they aim to measure performance — a metric that is often elusive, especially for knowledge workers. On the other hand, organizations also have the goal of improving employee performance. The performance management process is often also aimed at collecting data that can inform talent decisions, as well as related data such as career aspirations and development opportunities. Although all of these elements have something to do with the employee, trying to incorporate this mishmash of things into a cohesive assessment is like making dinner with what you’ve got in your fridge: Once in a while it meets expectations, but usually it ends up being a questionable proxy of a meal. For organizations, such an approach is both time-consuming and ineffective.

Instead, organizations and practitioners need to be clear about what they’re trying to achieve in performance management. Is it to get visibility into employee performance to inform downstream talent decisions? Or is it to accelerate employee performance? Force-fitting two objectives into a single approach creates confusion, not clarity. The solution isn’t to sacrifice one desired outcome but to create two distinct processes.

Measuring Performance

Most organizations want to collect some employee performance data to help inform downstream talent decisions. The best data to use is objective and quantitative, such as sales that can be attributed to an employee. But for so many employees today, there is no real objective data for evaluating their performance. In an attempt to capture what the manager already knows, organizations often manufacture complex frameworks to create some sort of quantitative data to represent someone’s performance. Those frameworks are usually based on the assumptions that all great performers have a set of common attributes represented by an ideal competency model and countable outcomes as described in annual goals. In the real world of work, this is rarely true. The solution to capturing this complex dynamic of employee performance is not overengineered rubrics but a radically simple measurement system.