Why performance management gets stuck and what we can do to challenge it 

We don’t think any of these are true. Instead, we see that performance comes from clear expectations, transparency with information, everyone holding each other accountable for what is important, and all employees feeling responsible and committed to what they do. Below are some of the areas that primarily traditional organisations get stuck in and some possible ways through. 

Sticking point #1 - Performance is all about measurement 

Traditional approach: Measure all of an employee's work through OKRs, KPIs, and objectives. The logic is that if the measures are right and aligned, the company will perform. 

Alternative: Assume that the best measures are outcomes rather than input or throughput. Encourage the employee to find ways to achieve those outcomes without describing everything in detail. Much of the value created by an employee is very hard to measure (teamwork, creativity, experimentation), and overly measuring will kill the initiative.

Engagement and commitment drive performance, not measurement. According to the most recent surveys, decades of measuring engagement have created a lot of data and insights but not shifting engagement. Measurement alone isn’t the answer.  

Starting point: Give employees outcome measures and treat them that way, with 99% of the emphasis being on how challenged and happy the employees are - outcomes are exactly that: outcomes. 

Sticking point #2 - Performance is defined top-down

Traditional approach: Objectives are decided high up and cascaded down layer by layer, often over a delayed period of time, to ensure alignment. 

Alternative: Relate to employees as able to deal with change and already knowledgeable about what needs to be done. Sometimes, there are big strategic shifts, but employees and middle managers generally know how to work effectively. Encouraging people to delay setting goals until everything is agreed upon at a higher level encourages the business to not take responsibility or initiative and often creates weeks of  ‘waiting’ when teams could instead act and create. 

Starting point: Constantly talk about priorities and what's in the way. Take a more Agile mindset to decisions being taken elsewhere and adjust the work as needed. 

Sticking Point  #3 - A good performance ‘system’ is key to accountability 

Traditional approach: Performance conversations are designed around the measures, whether weekly, monthly, or annually. They are how we hold employees accountable for doing what they have agreed to do. The process must be robust to work, often underpinned by expensive technology. 

Alternative: Accountability is chosen and not ‘put on’ others. Telling people what they are accountable to is not true commitment from others. It can create a climate of being accountable for ‘reporting’ or ‘responding’ ‘not getting in trouble’. Direct and powerful conversations about commitment and direction are far more important than chasing someone on numbers or spending time filling in a system. Besides, those numbers often suffer from sticking points 1 or 2. Simple and local is better. 

Starting point: Demote any centralised record keeping. Promoting meaningful and powerful conversations about performance. 

Sticking Point  #4 - Its all about consistency 

Traditional approach: In pursuit of fairness, everyone uses the same (costly) system, everything is done in roughly the same cadence, and everyone uses the same competency framework. 

Alternative: Consistency is overrated and often comes from fear of retribution. However, this has not prevented employee complaints in any organisation I have worked in.  The alternative is to equip managers with the tools, skills and ‘being’ to have frank conversations with employees and set clear expectations. This ensures that engagement and commitment can be addressed as easily as performance gaps because leaders have the freedom to choose the topic of the conversation - using their insight to get to the core of issues and blockers. 

Starting point: Stick with a clear description of expectations and how things work e.g. how decisions are made, how issues are escalated, and how to look after your well-being. Review everything you do for transparency, openness, and the opportunity for all employees to challenge how things are done. 

Sticking point  #5 - Measuring behaviour 

Traditional approach: Competencies or behaviours become part of the performance process.  Psychologists will tell you it is tough to measure behaviour, especially when combined with consistency, in a way that works for everyone. Many organisations tie themselves in knots by having multiple competencies, varying them by role, having several scoring options and splitting them by ‘level’. At this point, most frameworks lack any scientific credibility and are hard for managers and employees to understand. 

Alternative: Describe what is needed and create the condition for the behaviour you want. Want teamwork? Encourage the team to share objectives. Want decency and respect? Work with the team to create a charter and then train them to hold each other accountable. The behaviours you need are the ones that the team will thrive under, and only they know what that is. Decentralising this conversation creates real accountability and commitment and allows it to be revisited as needed. 

Starting point: Create agreements locally. Hold each other to account. Don’t try to measure behaviour. 

If you are in an organisation exploring performance management, you may not be able to tear up everything you have in place. However, any organisation can ‘audit’ its existing performance management process and look for the mindsets and assumptions that create it. Testing the limiting beliefs we have about employees is always time well spent.