The field of performance management has been in turmoil lately. Employees are getting confused. Leaders are getting frustrated. Consultants are getting rich. Why the upheaval? A small number of high-profile companies (including Adobe, GE, and Accenture)1 have abandoned traditional performance management in favor of less formal and quantifiable approaches that prioritize ongoing conversation over annual ratings. Elsewhere, human resources (HR) executives have dashed to follow suit, assuming what is best for these industry leaders will be best for their organizations, too. The problem is that there is little evidence to support these new approaches. We are not specifically arguing in favor of traditional ratings, nor do we believe most legacy performance and feedback systems are built to address today’s talent management challenges. But we are arguing for a pause before jumping into a hasty performance management redesign.
Human performance is complex. Some may even call it messy. Yet there are rules, principles, and science behind performance management. While the ultimate goal of any HR initiative is to improve performance, numerous intermediary levers can affect the outcome. Feedback is one of them, but there are many others, including goal setting, context, deliberate practice, and rewards structure. The answer to complexity is not oversimplification; the right process is the one that leverages the known facts about what drives performance. Today, HR too often ignores these facts, instead chasing “bright, shiny objects,” what John Boudreau and Steven Rice have referred to as flavor-of-the-day HR novelties.2
HR practitioners are too quick to remove a process corporate leaders don’t like. They should be arguing for the tough improvements that would actually drive performance, beginning with the use of feedback.
Myths About Performance
What are some of the myths that have led HR to redesign processes, despite the science? And what are the implications for a quality performance management process?
Myth No. 1: It’s a problem that employees don’t like formal performance feedback. Yes, there is certainly evidence that people don’t like feedback. Employees dislike it to such an extent that many will dodge feedback opportunities if they can.3 But that is hardly a reason for managers not to provide it. What an employee “likes” and whether he or she is satisfied are different.
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2. J. Boudreau and S. Rice, “Bright, Shiny Objects and the Future of HR,” Harvard Business Review 93 (July-August 2015): 72-78.
3. S.E. Moss and J.I. Sanchez, “Are Your Employees Avoiding You? Managerial Strategies for Closing the Feedback Gap,” Academy of Management Journal 18, no. 1 (2004): 32-44.
4. A. Rasheed, S.U.R. Khan, M.F. Rasheed, and Y. Munir, “The Impact of Feedback Orientation and the Effect of Satisfaction With Feedback on In-Role Job Performance,” Human Resource Development Quarterly 26, no. 1 (2015): 31-51.
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7. D. Van-Dijk and A.N. Kluger, “Feedback Sign Effect on Motivation: Is It Moderated by Regulatory Focus?” Applied Psychology 53, no. 1 (2004): 113-135.
8. M. London and J.W. Smither, “Feedback Orientation, Feedback Culture, and the Longitudinal Performance Management Process,” Human Resource Management Review 12, no. 1 (2002): 81-100.
9. C.F. Lam, D.S. DeRue, E.P. Karam, and J.R. Hollenbeck, “The Impact of Feedback Frequency on Learning and Task Performance: Challenging the ‘More Is Better’ Assumption,” Organizational Behavior and Human Decision Processes 116, no. 2 (2011): 217-228.
10. CEB Inc., “The Real Impact of Removing Performance Ratings on Employee Performance,” 2016, www.cebglobal.com.
11. L. Goler, J. Gale, and A. Grant, “Let’s Not Kill Performance Evaluations Yet,” Harvard Business Review 94, no. 11 (2016): 90-94.
12. A.J. Kinicki, G.E. Prussia, B.J. Wu, and F.M. McKee-Ryan, “A Covariance Structure Analysis of Employees’ Response to Performance Feedback,” Journal of Applied Psychology 89, no. 6 (2004): 1057-1069.
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14. H. Song, A.L. Tucker, K.L. Murrell, and D.R. Vinson (2017), “Closing the Productivity Gap: Improving Worker Productivity Through Public Relative Performance Feedback and Validation of Best Practices,” Management Science (December 2016), https://doi.org/10.1287/mnsc.2017.2745.
15. N. Kinley and S. Ben-Hur, “The Missing Piece in Employee Development,” MIT Sloan Management Review 58, no. 4 (2017): 89-90.
16. CEB Inc., “The Real Impact of Removing Performance Ratings,” 2016.
17. M.M. Lombardo and R.W. Eichinger, p. 133.
18. A.J. Kinicki, G.E. Prussia, B.J. Wu, and F.M. McKee-Ryan, “A Covariance Structure Analysis,” Journal of Applied Psychology 89.
19. R.D. Pritchard, S.S. Youngcourt, J.R. Philo, D. McMonagle, and J.H. David, “The Use of Priority Information in Performance Feedback,” Human Performance 20, no. 1 (2007): 61-83.
20. C.M. Kuhnen and A. Tymula, “Feedback, Self-Esteem, and Performance in Organizations,” Management Science 58, no. 1 (2012): 94-113.
21. S. Ertac, “Does Self-Relevance Affect Information Processing? Experimental Evidence on the Response to Performance and Non-Performance Feedback,” Journal of Economic Behavior & Organization 80, no. 3 (2011): 532-545.
22. D. VandeWalle, W.L. Cron, and J.W. Slocum Jr., “The Role of Goal Orientation Following Performance Feedback,” Journal of Applied Psychology 86, no. 4 (2001): 629-640.
23. A. Rasheed, S.U.R. Khan, M.F. Rasheed, and Y. Munir, “The Impact of Feedback Orientation,” Human Resource Development Quarterly 26.
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25. “The Perils of Accentuating the Positive,” ed. R.B. Kaiser (Tulsa, OK: Hogan Press, 2009).
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27. J.S. Goodman, R.E. Wood, and Z. Chen, “Feedback Specificity, Information Processing, and Transfer of Training,” Organizational Behavior and Human Decision Processes 115, no. 2 (2011): 253-267.
28. C.F. Lam, D.S. DeRue, E.P. Karam, and J.R. Hollenbeck, “The Impact of Feedback Frequency on Learning and Task Performance,” Organizational Behavior and Human Decision Processes 116.
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31. C.O. Longenecker, H.P. Sims Jr., and D.A. Gioia, “Behind the Mask: The Politics of Employee Appraisal,” Academy of Management Journal 1, no. 3 (1987): 183-193.
32. A.M. Lane and S. Gorbatov, “Fair Talk: Moving Beyond the Conversation in Search of Increased and Better Feedback,” Performance Improvement 56, no. 10 (2017) 6-14.
33. J. Welch, “Jack Welch: ‘Rank-and-Yank’? That’s Not How It’s Done,” The Wall Street Journal, Nov. 14, 2013.
34. S.E. Moss and J.I. Sanchez, “Are Your Employees Avoiding You?” Academy of Management Journal 18.
35. M.M. Lombardo and R.W. Eichinger, p. 78.