The Case For Performance Management: 8 Steps to Make It Happen

123RF Stock Photo
123RF Stock Photo

At first I was going to comment on Derek Irvine’s post here on TLNT, Still a Good Question: Do We Really Need Annual Performance Reviews?, but then I realized that was not adequate.

Of course he and others who argue for more frequent feedback are absolutely correct. No one can improve their performance on any activity without feedback.  I doubt if anyone in the HR community would disagree. This discussion has been repeated in different forums for as long as I can remember.

The problem is not “us” – it’s the managers and supervisors who should be holding those feedback discussions. Realistically performance management is not an HR problem, it’s a management problem. We – the HR community – have no day-to-day responsibility for or involvement in the management of employee performance. Nor are we ultimately responsible for employee development.

Who is responsible?

“Our” performance management systems are best viewed as tools for managers. Our role is very similar to the guys on the sideline at a football game – we’re responsible for the Gatorade and the towels. We keep the score sheets, but the players have to play the game.

We do carry some responsibility for making certain personnel actions are defensible. That of course covers promotions, salary increases, cash awards, etc.  Whenever an employee is treated differently, there should be a defensible explanation. Performance is the stated reason and the problem.

We are also primarily responsible for defining the goals for the performance management process. Every employer needs to identify the stars as well as the few employees whose performance is unacceptable. Both are important but for very different reasons. Managers should be asked to justify their ratings.

A core issue is that ratings have little credibility. Everyone it seems believes the ratings of their peers are inflated – but not their own. My impression is that it’s a universal problem. In government agencies it is not uncommon to find 90 percent or more rated at the highest levels. Fortunately, at least in the business world, ratings are normally confidential. Employees who are disappointed are often reluctant to tell colleagues.

Unfortunately, there is no easy solution. We have tried endless formats for the appraisal forms. We have provided training for managers (although most would admit it’s minimal.) Technology helps, but unless computers can provide the feedback, that does not address the core problem. And I doubt if a policy mandating frequent discussions is a solution since it’s the quality of the feedback that is the key.

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8 steps to improve the situation

Let me suggest eight steps to improve this situation.

  1. Secure the public support of top management as champions. Everyone needs to understand this is an important problem. Derek is correct that effective performance feedback is a key to high performance. Experts in talent management argue for identifying the “A” players. This should be a priority.
  2. Involve managers throughout the process to revise the way their performance will be evaluated. The best managers can serve as Subject Matter Experts (SMEs) and there is every reason to rely on that approach here. They know the problems better than anyone. With guidance, a small team can define the parameters for the process in two or three meetings. If we were designing a tool for a carpenter, we would want them involved. It’s no different here. Then they “own” the new system and can communicate their progress effectively with peers.
  3. Hold managers accountable for managing performance. They need to understand what’s expected and how their performance will be evaluated, and that their pay and career progress will depend in part on how they perform. Developing performance measures including job-specific competencies is not difficult. In my opinion the engagement of their people should be a key performance indicator (KPI).
  4. Provide coaching for managers that are ineffective. My experience suggests those that are the best warrant recognition and will be more readily accepted as coaches than anyone in HR. Managers who do not show improvement should be moved back to their former position. That sends a powerful message. Recent studies have confirmed that poor supervision is often the reason employees quit. The cost of poor supervision justifies the investment in coaching..
  5. Technology is already important. But one problem that has not been adequately addressed is the fact that managers and supervisors are confronted with performance problems throughout the year, but often are embarrassed to admit they do not know or recall the answers – so they muddle through, sometimes with disastrous repercussions. That suggests developing a Q&A addressing common concerns and providing advice that they can easily access.
  6. Rely on small groups of high performing job incumbents to define performance criteria for each significant occupation. The idea that the same performance dimensions should be used for all employees should have been discarded decades ago. Experienced incumbents serving as SMEs know what is essential for job success. With guidance, they can define a set of key competencies important to their job family in two or three meetings.
  7. Define both the “Outstanding” and the “Unacceptable” performance levels on each performance measure. Employees want to know what they have to accomplish to be successful. Many will aspire to be “Outstanding.” The organization needs to be able to defend low ratings. And most important, it will facilitate those performance feedback discussions. The best performers serving as SMEs can do this in an extra meeting or two.
  8. Promise to review the performance system and its use annually.When there are problems, employees want to know they will be addressed.  Involving employee focus groups is not costly. They can also be helpful in solving problems. This is not brain surgery.

On sports teams players invest hours working with coaches to develop their skills. And the coaching continues through their careers. Pro teams do have HR managers, but they are not involved in developing talent and certainly not in playing the games.

Our role should be limited to making certain managers have the tools and are using them effectively. Gatorade may be good for athletes but our problems with performance management warrant something a little stronger.

Do we really need annual performance reviews? As a prominent public figure once said, “You betcha.”

 A different version of this was published previously on the Compensation Cafe blog.

Howard Risher is a private consultant who focuses on pay and performance. His career extends over 40 years and includes years managing consulting practices for two national firms. He recently became the editor of the journal Compensation and Benefits Review. He also has an MBA and Ph.D from the Wharton School of the University of Pennsylvania. Contact him at h.risher@verizon.net.

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