Key Reasons Performance Management Fails and How To Fix Them
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 Gregg Greenberg

Performance management is often seen as a bureaucratic process forced by HR, which adds little or no value to the business. If you don’t have performance management in place yet, or if you are looking to improve your current process, here are 7 challenges you want to address during your planning stage to ensure you get the highest return on your investment.

Lack of strategic focus

The company’s overall strategy and goals must be integrated into your performance management process to deliver real business value. A well-designed process begins with focus. Having too many company goals and relying on a “cascade” process will likely leave your employees feeling confused, unaligned, and inefficient. Simplify and prioritize your company goals, and focus your performance management on a few critical goals that are key to your business growth. Then help your employees understand how their everyday work and individual goals will help achieve these objectives.

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Lack of timely, meaningful feedback

Don’t wait until the formal performance review to provide feedback. Employees may feel blindsided, and this can lead to disappointment, confusion, frustration, and disengagement. Disengaged employees are less productive and less motivated to improve their performance.

Train your managers to provide timely, meaningful feedback when positive behaviors or performance issues occur. Waiting too long to give feedback hurts your company’s employee morale, engagement, and ultimately your business performance.

Lack of leadership support

Management and leadership team must support and help drive performance management. Your leaders have to be committed and actively engage their teams in performance management activates, and provide support and recognition to managers and employees who exhibit the expected behaviors and actions. Without leadership support, performance management will not be successful no matter how well-designed the process is.

Lack of stakeholder review

When designing your performance management process, you should involve your major stakeholders early on in the planning phase since they are the future users of the system. Without proper consultation with your key stakeholders, your performance management process may not address all the needs of the business, and you risk losing time, resources, and buy-in implementing a system that no one wants or knows how to use.

Lack of proper training and communication

Without proper training and development, leaders and managers may not fully understand what performance management is and what’s in it for them. In the implementation phase, it is crucial to have good, relevant communications to explain the benefits of performance management, and provide ongoing training to help leaders and managers obtain the appropriate knowledge, behaviors, and skills to properly engage their teams in performance management activities.

Lack of appropriate recognition and rewards

Rewards are extremely important in recognizing and promoting top performance, and to keep your employees engaged, motivated, and inspired about their future with the company. An effective rewards and recognition program should have clear expectations and criteria around what types of behaviors and actions are rewarded that drive your company forward.

Lack of simplicity

Whether you currently have performance management in place or not, the process you ultimately implement should be simple, easy to understand and use. Your managers and employees should not have to spend hours to learn your new processes and tools, or to look for the performance-related information and forms they need.

Bad performance management is costly and delivers very little value, and can actually lower your employee engagement level and harm your business growth. But when done right, the impact of effective performance management is significant. Not only will you see an increase in your revenue growth and bottom line, you will also stop your top performers from walking out the door.

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