Performance management is a core competency of Civic Dynamics. It is based on the remarkable public and private sector career of David Barrick, the elected official and administrator who led Ontario’s fourth-largest city through the challenges of the pandemic.
But many consultants and managers have become lax in defining performance management, and are often inefficient when implementing it. A recent study by the polling and research firm Gallup highlighted some of the shortcomings of performance management implementation, and suggested ways to make the process more productive for both employees and those who manage them.
Gallup was surprised at the outset of its research to discover that only 20 percent of U.S. employees surveyed felt motivated by their company’s performance management system. Just 26 percent believed their performance reviews were accurate, and a slightly higher 29 percent believed the reviews were fair.
This is an obvious problem. If less than a third of a company’s workers have a positive experience with performance reviews, the process itself cannot be expected to benefit the company in any meaningful way. What is needed is a version of performance management that is highly focused on the employee, and his or her talents and goals.
“Performance measurement needs to be blended with individualized development,” the firm suggested in its comprehensive report. “A fundamental flaw in most annual reviews is that managers do not tailor them to reflect what they expect of each employee, and they do not help workers prioritize what to do next. Rating scales and rankings do not specify the actions, moments and results that define performance, nor do they describe the impact or value that employees bring to the company. This immediately puts employees on the defensive and can make them feel unappreciated.”
In a conclusion that would astonish many managers and C-suite leaders, Gallup determined that “traditional performance reviews tend to demotivate employees.” And this exercise in discouraging the workforce is costly: Gallup estimates “the cost of poor management and lost productivity from employees in the U.S. who are not engaged or actively disengaged to be between $960 billion and $1.2 trillion per year.”
Clearly, performance management is too important to be left to supervisors who are unaware of performance management basics, or those who like to “wing it” when measuring the performance of employees.
Inaccurate or insufficient data is at the heart of many performance management failures, says Gallup. In many cases, managers begin reviews with faulty information and often a biased perspective that immediately invites a defensive or adversarial response. Far from inspiring the employee, this approach is demoralizing and removes incentives for achievement. After all, if a manager is unaware of an employee’s contributions to the company’s success, extraordinary effort may begin to seem futile.
“Performance management has buckled because organizations have prioritized measurement over development,” says Gallup. “Yet, development is key to improving performance. Measurement still matters, but it has to be reframed and designed to support development and performance improvement. … Moving from performance management to performance development requires managers to think of themselves in a new way: as a coach, not a boss.”
Evaluating Performance Management
