The top 5 perils of performance management
- November 30, 2010
It’s that dreaded time of year for managers. Annual performance evaluations are due. This is akin to asking a guy to go shopping with his girlfriend on Black Friday. Other than firing someone, it is probably the most dreaded task for managers. Is there any hope? What can managers do to make it easier and effective?
Many organizations are at an impasse when it comes to giving employees feedback. Most managers are terrible at this because they hate conflict, but this creates a problem. The performance of a low-performing employee may not be documented in his annual evaluation form. Fast forward a year. Now maybe a fed-up manager demands that HR fire this same employee for not meeting his goals. Unfortunately, documentation says otherwise so the manager must hang on again to a substandard employee. Talk about a waste of time.
In addition to the time-consuming process of completing the form, managers are also faced with other issues associated with managing employees’ performance. I have compiled a list of the top five perils and describe some of the new ways managers can tackle this task and get better results.
Peril #1: Completed form does not equal feedback.
Completing a form does not constitute “giving accurate feedback” to your employee. Performance management must be ongoing consistent and accurate feedback. This means meeting with your employees directly and sharing the good, the bad and the ugly. Believe it or not, most employees want to hear what they can do to improve. Get talking, and don’t worry so much about a form. The conversation and real-life examples are more important to back up your ratings.
Peril #2: Short-term Memory
What have you done for me lately? Most managers get stuck in the short-term memory rut. When they wait until the end of the year to complete their reviews, employees only get remembered for what they have done at the end of year. Our memories are not that good. Take the time throughout the year to take notes or keep an online file about employee performance. Make sure the evaluation encompasses the whole 12 months of your employees’ work.
Peril #3: Halo and Horn Effect
“Blair has always been a great employee in the past so he must have been a great employee this year too.” Be careful not to subject yourself to the Halo or Horn effect when evaluating your employees. You should look at detailed results and skills. Just because someone has performed well or poorly in the past does not mean that they automatically should be at the same rating year after year. Look closely to see whether the goals and objectives were met. Challenge your employees to raise their level of performance — that will do more to keep them engaged as long as they see where their work adds values to the overall organization’s goals.
Peril #4: No one ever gets a 1 or a 5.
We do not all live in Garrison Keillor’s “Lake Woebegone where everyone is above average.” If your performance evaluation form has a scale, then use the full range of the scale. Give your lowest performers the 1’s and 2’s, save your 3’s for those who are meeting expectations, while your superstars should get the 4’s and 5’s. I have worked for clients whose unwritten policies assumed “no one ever gets a 1 or a 5.” Well then why do you have those on your scale? The key here is to truly differentiate performance levels. You must do that with actual results and feedback from others on how this person works — especially if your firm ties pay to performance. What should you do if you use the full scale but your colleague in the next department does not? Get HR to help you set up calibration sessions or use HR to double-check ratings to ensure they are not under- or over-inflated.
Peril #5: Career path? What career path?
Managers deliver the feedback and then move on to the next year’s goals. Employees want more. They want and deserve to know what to do with their feedback. Put it into an individual development plan — show them how and what they can do to leverage their current strengths and improve on their weaknesses. Connect the dots for the employees between how their efforts on improving their skill will lead to better performance on the job or in preparation for the next job. Don’t just leave them hanging. Discuss future career opportunities and how you will help them achieve their goals. Again this means having regular conversations about their development, progress and future with the organizations.
If managers can avoid these five perils, then they will have a greater likelihood of having easier conversations with their employees. Delivering powerful performance appraisals are critical for organizations.
Workforce Intelligence Institute research found that companies who did performance management well experienced the following:
• Strong correlation between a company’s financial performance and an effective goal setting process.
• Greater productivity.
• Quicker execution of company strategy.
• Better allocation of resources.
• Reduction in redundancies.
• Decrease in employee turnover because of employee engagement and “ownership.”
A new trend in performance reviews are “open performance reviews.” Companies that use this approach open up the review process to contributors outside the formal management chain by using social connections, mobile access and Web 2.0 services. The idea is to socialize performance reviews so that managers get better real-time analysis of work-force capabilities and can accelerate the employee’s development.