The Untimely Demise Of Performance Management

There has been much hype about the demise of performance management, with companies such as Microsoft, Dell, Deloitte and many others creating a stir by claiming to have disbanded their traditional performance management processes (HBR, 2016). But have they really? Can we really do away with the dreaded appraisal system?

The Problem

Without question, there is a need to revisit how we approach managing performance. From a 20 year career of designing, implementing and supporting performance management processes, I’m pretty clear on the issues. Excessive bureaucracy, unnecessarily complex and long-winded paper-based processes, and a significant time commitment for all involved.

However, the biggest problem by far and what fuels the debate about the demise of performance management, is that everyone despises appraisals – both staff and managers detest the whole experience. Rather than providing a source of motivation, or an opportunity to really talk about future aspirations, the potential benefits of a powerful conversation gets hijacked by the amount of paperwork to be completed, the last-minute email chains asking people for feedback, and that feeling of existential dread that some last-minute negative feedback is suddenly going to materialise and destabilise the whole experience.

Performance ratings

And then there’s the whole debate about performance ratings. Being told that I am ‘competent’ as opposed to ‘incompetent’ is not exactly inspiring, but neither is having to fight to be rated as ‘excellent’ rather than ‘good’ for the sake of an extra 1% pay rise.

Yet it really doesn’t need to be this way. Effectively managing individual performance is not rocket science. It’s what good managers do without even thinking about it.

Effective managers ensure that they have regular conversations with their people, giving clarity on what is expected of them and what they need to deliver, negotiating and renegotiating priorities and deadlines, providing timely and formative feedback, addressing potential issues before they escalate, and seeking opportunities to offer support and development.

So the problem is not with the concept – good people managers know how to get the best out of their teams – but with the process that surrounds it. Increasingly, managers find themselves constrained by paper-based forms, static objectives that quickly become obsolete, and the pressure to sit down and have formal review meetings to a pre-defined timetable.

The need for flexibility

If anything, the pandemic has brought into even sharper relief the need for flexibility to refocus priorities at a moment’s notice! Good managers ensure their team know if they are doing a good job, and don’t need to use ratings to communicate this to them.

There is nothing fundamentally broken with performance management – it is and will remain a core feature of contemporary management practice. It is the complex, time-consuming processes and systems that have been become known as “Performance Management” that need to be challenged.

The future of performance management

The future requires more agile, future-focused, continual conversations about performance and development, with ‘light touch’ enabling support from technology (Cirrus, 2016). We need to reengage with why performance management conversations are so important and change the narrative away from the ‘dreaded appraisal’ towards meaningful dialogue. In my view then, the impending death of performance management is greatly exaggerated.

By Dr Linda Buchan, Head of HRM and Law Group, Edinburgh Business School, Heriot-Watt University

References

Cappelli, P. and Tavis, A. (2016). The Performance Management Revolution. HBR October 2016 https://hbr.org/2016/10/the-performance-management-revolution

Cirrus (2016). Redefining Performance Management http://www.cirrus-connect.com/wp-content/uploads/2017/05/Cirrus-Performance-Management-Report.pdf