Problems With Traditional Performance Management (1/3)
Performance management has been a hot topic for a few years because the traditional performance management systems have proven to be highly ineffective, costly, and increasingly obsolete. In this three-part blog series, we’ll explore some of their major flaws.
For those of you who are less familiar with HR terminologies, "performance management” refers to tools and processes that support goal-setting, feedback/recognition, and performance reviews, with the overall goal to develop and motivate employees.
1) MISALIGNMENT OF GOALS
Every year, companies set objectives that they want to achieve. Every year, employees set goals that they want to achieve. Typically, there is a disconnect between the two activities, which leads to employees’ individual goals not directly contributing to the company objectives. When there is a disconnect, it becomes a lose-lose situation, because the employees won't get rewarded for meeting their individual goals. This can lead to significant loss in productivity and engagement. We need better (and easier) ways to cascade company objectives down to employee goals.
“95% of employees do not fully understand company goals or what’s expected of them to achieve them” - Harvard Business Review
Pro tip? Clearly define and communicate the skills and values you want your employees to work towards top-down. Effective performance management starts with goal alignment. Always.
2) LACK OF CONSTRUCTIVE FEEDBACK
In most companies, there isn’t enough training, processes, or tools to help employees understand how to provide and receive constructive feedback (knowing how to receive feedback is just as important). How many times have you given or received feedback like “you are very smart”? While this example sounds harmless, it is not constructive. It’s easier to understand why this example isn’t constructive when we flip it - “you are very dumb”. Trait-based feedback like this isn't constructive because the receiver can’t act on it. It doesn’t point out the specific actions that the receiver can repeat or correct. Also, most people have a tendency to get defensive when you comment on their traits. Here’s a great link that explains action- vs. trait-based feedback.
Additionally, constructive feedback should focus on strategy, process, and effort, instead of results. Most managers focus on results way too much in feedback (e.g., “good work achieving 30% savings”). The fact is, there are many factors that drive an outcome, and many of them are out of people’s control. We should focus on the things people can control (i.e., strategy, process, and effort) when giving feedback, so that these controllable factors can be repeated or corrected. In the simplest terms, constructive feedback means actionable feedback. We will dive deeper into this in another post.
Pro tip? Use our Feedback Cheat Sheet (here) whenever you provide or receive feedback. Share it with the other party in advance to set expectations.
In the next post, I will discuss one of my favorite topics - subjectivity.