Can We Really Trust Performance Management?

One of my smaller clients recently asked me if they should consider an automated performance management system. You know the type – for a huge investment, employees can enter their objectives, managers approve them, and then self appraisals and manager performance appraisals are done right in the system. The same system can be used to manage talent and potential ratings, development plans and all the workflow and approvals that come with that. The good ones even allow leaders to plot their teams on a grid of some kind and compare them with one another. Some even include a module used to manage merit and incentive compensation. The lure is losing all those manual forms…all for a mere million dollars or so. Companies who sell these sing the benefits of having all that data in one place, such as being able to identify employees with certain skills who might be ready for a promotion when you’re trying to fill a job. That can be a huge benefit when neither the recruiter nor the hiring manager knows the very qualified person in another division. It also comes in handy when building a succession plan across diverse business units. This is very justifiable for a large company and reducing paper is a very green response. My answer to the client who asked about it, however, is strongly relevant for both large and small companies.

It is the same case I have made when two very large companies I was employed by considered (and subsequently purchased) such a system. The answer is simple: If the system will improve the dialogue between managers and employees about their performance, opportunities and next steps enough that increases in performance justify the cost, than do it. If it will hinder or curtail that dialog in any way, keep the paper. Instead, spend the money enabling managers to improve dialogs that drive performance and hold them accountable for that performance. Creating a culture of performance will provide far more benefit than having your data all in one place.

Now, that answer makes sense for a small company. But even I might question the wisdom of continuing a manual process in a diverse multi-billion dollar company. The point is: I’m not espousing keeping all your paper and creating a department dedicated to binder creation. I am vehemently advocating for priority number one of any performance management system implementation to be increasing and improving the dialog between managers and employees. I’ll even go so far as to say that should be priority one, two AND three. Then you can focus on the rest. I say this because I have seen too many of these systems implemented with a gigantic focus on getting the system up and running, teaching people how to use the system, and policing to make sure the online forms are filled out on time, all while dialog goes out the window.

The truth is that when you implement such a system, you will be sending more messages about performance management to managers that you ever have before while you implement the new system. If you focus on mechanics and deadlines, that is exactly what they will focus on. By the time you decide to change your communication to improving dialog, they will no longer be listening; they will be too focused on getting their requisite ‘stuff’ into the system and too tired of the time spent struggling with the system to worry about talking to their people about their performance. This defeats the entire purpose.

The far better alternative is to consciously make all communication about the system first about the importance of the dialog. If a manager didn’t get their objectives in the system on time because the time they allotted to performance management was spent coaching an employee on the cusp of a breakthrough performance improvement, then that needs to be OK. Obviously, year one of any of these systems is a bear…that’s the year when every baseline has to be entered and that takes time. That time, however, cannot be allowed to take away from great dialog delivering employee feedback or setting expectations. Managers and employees both need to know that these things are still priority number one. If the dialog is minimized, it will damage employee engagement, result in unclear expectations, minimal feedback and ultimately, the organization will lose an opportunity to drive performance to the next level, much less resenting a seemingly valueless system. Automation is a noble goal, just make sure you save the baby when you throw out the diapers.

Curious about how your company can improve talent performance management? Contact us, we can help.