Performance Management Does Not Equal Performance Improvement – Improving Systems Requires More Than Paving The Cow Path

Performance management systems have been around for over three decades.  As an HR manager at a high tech company in 1984, I was responsible for administering the annual “performance review period”.  The annual review was supposed to be a time for setting goals and providing developmental feedback.  It also insured that every manager had at least one performance-related conversation with each employee each year.  It was also seen as a way to either justify the planned salary increase or, in cases where there were problems, to begin a documentation trail to move an employee out of the company without legal ramifications.  The real action regarding evaluating each employee’s performance took place in the rating and ranking session that all the managers participated in during which compensation increases were decided.  Once this two-day meeting was completed, HR had to hound the managers to get all their reviews written.  Since the salary increase was already determined in the rating/ranking meeting, the performance review document was often written so as to support the proposed salary increase.  Performance strengths and developmental goals for the next period were included in the document that went into the employee file.  Managers understood that this annual process was “necessary”, but no one, not even the HR folks, really believed that the annual performance review actually led to improved employee or departmental performance.

The basic process has evolved very little since then with the exception of two changes: there is a somewhat greater emphasis on setting goals, and the tools for actually writing the review document have changed.  Enhancements have been directed primarily at speeding up the process, not improving it.

Whereas in 1984 the manager would be expected to compose a one or two page personal appraisal report using a word processor (the newer programs at the time had spell checking), today managers can “write” the review with a few clicks of their mouse.  Today’s performance management software lets managers click to select the characteristic (e.g. “exhibits teamwork”) they want to include from a predefined list (sometimes called “coaching tips”), click to decide how strongly or weakly worded they want to make the point, and voila, a politically correct, legally correct, and spell-checked paragraph has been “written”.  Several more clicks and in less than 10 minutes the reviewing manager is done with the (too often dreaded) annual review process for that employee.

I recently viewed the product tour for an industry-leading performance management system.  In touting its system application sophistication the vendor boasted… “With the click of a button…the document can be automatically personalized…”  Does anyone else see the oxymoron here….”automatically personalized”?

This is the same old practice packaged with enhanced electronic aids.  The increasing speed and automation of this approach actually serves to reduce the value of the employee performance review process.  We’ve just paved the cow path and upped the speed limit!  Is this really the direction we want to be going?

I will mention here three initial concerns I have with this development:

(1)  Speeding up the writing process reduces the effectiveness of the intended communication to the employee. The process of writing is actually a process of thinking.  Managers who take the time to compose their own original paragraphs are likely to be much more specific and grounded in their feedback than any generalized “coaching tip”.  Additionally, the act of the writing is also indirectly helping the manager to prepare his/her script for the upcoming meeting with the employee. [Note: Some performance management systems enable sending the document to the employee and obtaining their electronic signature, thus allowing the manager to actually skip the meeting or personal communication altogether.]

(2) Automating the document sets the wrong mood for the actual meeting with the employee to discuss their performance. Automating the document implicitly suggests that the review process is “automatic”, mechanistic, and mostly quantitative.  Automated writing suggests that template writing is better.  The quicker the manager and employee get through this annual process the quicker they can get back to the “real work”—as if employee development were not part of the job.

(3)  This performance management system is often confused with a performance improvement system. Traditional performance management systems have the right lever for improving performance: the one-to-one communication between manager and employee.  Conversely, they have a totally inadequate and warped implementation of the practice in terms of frequency of occurrence and quality of this conversation.  Performance improvement conversations do benefit from periodic goal setting and review, but the real driver is at the more granular level of making and keeping commitments on a week-by-week, month-after-month basis.  Every task request a manager makes is an opportunity to forge an effective agreement for a specific and defined performance level.  Each request begins a dialog that should have an explicit delivery and assessment at the end.  Each dialog is an opportunity to enhance performance and build trust.

A new breed of software tools is coming to the market based on the concept of performance improvement.  The annual employee review document will persist, but the new tools will focus on the frequency and quality of the one-to-one ongoing dialog between managers and their staff.  The real lever for boosting personal and enterprise-wide performance is elevating and illuminating these closed-loop conversations.  These new software applications will offer the first fundamental advancement in performance management practice in over three decades.