Performance Management - Do's and Don'ts

April 20th, 2014

Performance Management - Do's and Don'ts

I have written couple of times now on feedback and its importance for organisational performance. I would now like to touch the issue of performance management at an organisational level.

What follows does not come from a 'study' of performance management systems, but from the practical, real-world experience I have had with clients, the challenges they have faced up to and what I have learned from the field of Behavioural Economics.

In the first instance I should declare my prejudice, at least so you understand something about the lens I look through when thinking about performance management systems. I am a believer in people over process. Not that process is unimportant, just that the perfect system is simply imperfect because you have to have humans implementing it. If you know anything about people, you know that they can be very creative when it comes to 'playing the system'.

I should probably start by offering an apology, which I hope helps explain my perspective. At one time or another many of us have begun the New Year with a list of promises made to ourselves. In promising, we really believe that we have a commitment to changing something about ourselves, and we begin January in earnest. January is a month when gym memberships spike, however, come February we find that most of those promises are discretely forgotten and the old patterns and habits re-establish themselves.

Another anecdote comes from a conversation I had with a strange gentleman I met in a supermarket few months ago. It was sparked by the fact that his trolley was filled with about 200 rolls of white bread. It turned out that he ran a number of sandwich vans around the trading estates close to where I live. His most popular (and profitable) item was the good old-fashioned sausage roll. He told me that he sold very few in January and February, but that by March sales were back up to their normal levels. He put this down to the fact that the people try to eat more healthily in the New Year but by the end of February had given up.

You may be able to relate to these stories and my reason for telling them goes to the heart of the problems in performance management in organisations. For some reason when HR tackles the problem of performance in their organisations they want to suspend everything that is known about human nature.

This is without doubt one of the best examples of the triumph of hope over experience. In the same way that we all make our new years resolutions and end up binning them in February, organisations launch new performance management systems with great energy and enthusiasm and promises that 'this time it will be different', only to find that nothing has really changed. Just because the new system happens to be a new 'software driven process' makes not one iota of difference. Your New Years resolutions aren't accomplished because they are written on a piece of paper!

Here are some of the problems that face organisations:

Problem 1

Usually the focus and effort goes into the system rather than the people. By this I mean that the starting point is often what the process needs to look like, and this then moves on to thinking about how the system is 'sold and enforced'.

Problem 2

There are quite often legacy issues to overcome. It is frequently the case that past attempts at performance management have not gone as well as people would have wished, or that the current systems is seen as ineffective or bureaucratic. For staff there can be a 'here we go again' feeling.

Problem 3

Skills development. For performance management to really lift the business in terms of deliverables and outcomes, helping people to develop the skills needed is much more than a briefing session around the documentation and the process. Surveys show us that most people become demotivated by the process of performance management. Neglecting the development of skills is most likely going to mean that performance management doesn't do what it says on the tin for your organisation.

So what can we do?

My top 3 tips would be:

1.Engage, engage, engage. Seems obvious, but many organisations want to cut to the chase and get on with designing the system and the implementation.

2.Take a 'high feel low bureaucracy' approach. The process should encourage managers to sit down with their staff and managers need to be clear about, and believe, that they personally benefit.

3.Make sure you really equip people with the skills to effectively take part in a performance review on both sides. Half day briefing sessions don't count!

One of the best predictors of future behaviour is, unsurprisingly, past behaviour. That means that if you have a history of poor delivery on performance management then you are much more likely to end up in exactly the same place. This doesn't mean that you should give up all hope, but that you should be realistic about what it takes to really change patterns and habits. The strong 'normalcy bias' means there is a huge amount of inertia to overcome before a new routine is established. Without recognising the work that it takes to overcome this inertia the likelihood is that backsliding will start very soon. Being realistic about the investment in time, resources and persistence simply means that you are prepared for a longer haul, both psychologically and emotionally.

You may be looking for that 'quick fix' but the track record of these is, at best, abysmal. In fact you are likely to be worse off at the end of your quick fix 'fix'. The good news is that there is significant organisational competitive advantage in getting it right, and it is hard to copy. As you well know, by February most people cant find their training shoes but can easily put their hands on that yummy sausage roll!

Simon Wiltshire

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