The 'real' problems with performance management

Over the past 25 years I have played various roles in several thousand performance reviews.  Be it as a participant, reviewer, reviewers manager, HR sign-off, process auditing or handling complaints and formal grievances.  Over this time I have seen some very clear patterns as to what works, what doesn’t and why.  It is with this background that I ponder the wisdom of the current trend toward abandoning performance reviews or ratings.

I am not saying they can’t be improved, particularly in light of recent work in social neuroscience, Strengths Based Management and positive psychology, but I see real risks in ditching them.
Let me explain.

Almost every article I see questioning the value of performance reviews will cite some form of statistic pointing to high dissatisfaction or low perceived return on investment.  They often fuel this uncertainty by mixing in claims about the mysterious needs of a particular ‘generation’.  It is ironic that the work of people like Bruce Tulgan, the author of Managing Generation X (1995) shows how little of this is actually new.

Most people have experienced a less-than-great performance review experience at some point in their life, so these statistics will feel right: they are aimed squarely at unconscious biases.  What rarely appears though is what was actually being studied, how, or any form of root cause analysis of what really went wrong.

I have always believed the advice I was given early in my management career:

"No aspect of a performance review should ever be a surprise"

In 2004 Robert W. Rogers, then President of DDI wrote “Realizing the Promise of Performance Management”, one of the most credible and pragmatic texts I have seen on the topic.  Armed with several large-scale studies, Rogers draws straight-forward conclusions about 8 key factors that will impair a performance management system:

• Lack of champion/senior management support.
• Failure to tie performance expectations to operating results.
• No development plans.
• No measurement methods to assess system effectiveness.
• No integration of data from the performance management system into other systems.
• Infrequent communication and lack of associate input.
• Insufficient training for leaders on how to coach and provide feedback.
• Too frequent changes to the system.

He regards the first point as “… the primary problem!” and I totally agree. In my experience, any failing in this regard often leads to the other issues listed.

Performance management (simply) must be:

fair, accurate and meaningful

A quick look at the list above will show how easily these expectations are placed at risk.

We all know the symptoms of these issues; reviews that are not completed, late, meaningless, scant or worse; unfair, breach policy, contract or law.  These outcomes have a huge impact on employees who often feel powerless to question ‘management’ or ‘the system’.  If this becomes the reputation of your performance management system you risk creating organisational learned helplessness.  Trust me; this will kill your organisations culture and performance, often in unseen (passive aggressive) ways.  Additionally, research into ongoing exposure to such work environments shows significant links to employee health issues.

So, what's my point?

If you are questioning the effectiveness of your performance management system I suggest you take a very honest look at this list.  Because failing to admit that any of these factors underlie the current reality will likely see any replacement fail for exactly the same reasons.
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Does your organisation really take performance management seriously?