Why Performance Management Never Seems to Work

Coincidentally, I was part of a few conversations about performance management last week. And suddenly, it all came into focus – why performance management doesn’t ever seem to work. 

Here are the three things that led to my epiphany: 

Performance Improvement Plans (PIPs): Someone asked how to help an employee on a “PIP”. 

My response:  by the time someone’s on a “PIP,” the relationship with their boss is completely frayed. There’s no trust left. The relationship has become transactional – “I pay you but you aren’t doing what I need you to do. Figure it out, or you’ll have to go.” (A “PIP,” by the way, is just as often a breakdown of management as it is the fault of the troubled employee.) 

My recommendation: figure out how to shift the “PIP” from a transaction to some form of “win-win” … Something like, “I can’t promise you that after we complete this PIP that you will be able to keep your job here, but I can promise you that by the time you’ve completed this PIP you will be better equipped to succeed in whatever role comes next for you, here or elsewhere.” 

End of Year Reviews:

Without going into the details of the second conversation, I will just say it was nothing new: There should never be anything surprising in an end of year review. If there’s going to be an annual performance process, then expectations should be set in the beginning of the year and then performance tracked against those expectations throughout the year. If the employee is not meeting those expectations, in month one, then there should be a conversation in month one - not month twelve.

One of the problems with the “end of year” approach to performance management is that it gives reluctant managers an out. They are afraid to give feedback in the moment and figure, “it will probably get better and I won’t have to deal with it. Worst case, I’ll deal with it at the end of the year.” Right, at the end of the year when it is a festering wound with frustrations high on all sides … that’s when it will be a good time to deal with this small paper cut of a problem. Seriously? And yet, this is happens quite often. 

Performance Management:

All of this led to the third conversation. I was talking with someone about performance management in general, and it suddenly dawned on me: The problem with performance management as a whole is that it is all about what “You” (the Employee) can/should do for “Me” (The Employer). The review is by its very nature transactional – a form that HR makes people fill out in order to check a box. I can’t remember ever going back and looking at any of my people’s performance reviews, ever. So what are they being kept for? The answer – potential lawsuits, a paper trail, a bureaucratic justification for differentials in bonuses and merit pay. 

Fundamentally, performance management isn’t done in service of the employee at all. It is yet another transactional exercise that makes the employee (and the manager) feel that they are just doing for someone else in return for getting paid. It's not motivating at all. I never once in my career have thought, “I’m going to do this to get a better bonus.” I have been disappointed when my bonus wasn’t better, though. Useless at best, demotivating at worst. 

So what’s the remedy to this broken institution of performance management? 

I believe the answer lies in three simple principles: 

• Performance management must start from a genuine desire to help every employee learn and grow. 
• The feedback given, whether “course correction” or “positive reinforcement”, must be clear, specific, and actionable with a the goal of empowering each employee to make meaningful progress. 
• As such, performance feedback must be given in a timely manner, focused on improvements in the moment rather than waiting until the end of the year when it is stale and inactionable. 

Does this mean that I think we should do away with end of year reviews? 

I guess the answer depends on why those end of year reviews are being conducted. Are they done to help employees learn and grow? If yes, great. If not, I think the answer is clear. 

Cross posted at JeffSigel.com. Connet here on LinkedIn to get more news, posts, and articles. Learn more about my book at JeffSigel.com or on Amazon (The Middle Matters: A Toolkit for Middle Managers) Or reach out to me at jeff.sigel@proprioceptive.io if you’re interested in training for your middle leaders or coaching for yourself.