Performance and performance management is a major challenge in today’s workforce. Issues with performance management lead to tremendous financial losses globally, for businesses of all sizes, and across every sector. Even more concerning is the fact that, if left unmanaged, problems with performance often lead to loss of competitiveness within entire industries.
In this blog, we’ll outline the seven most common problems with performance management, and we’ll discuss solutions that companies can implement to mitigate those issues.
What is Performance Management?
At a very macro level, performance management represents the approaches, processes, procedures, tools, and techniques, employed by businesses, to monitor, assess and enhance employee performance across the organisation. The primary goals of performance management are to:
- Increase employee efficiency
- Enhance organisational productivity
- Maintain and sustain competitiveness
- Reduced input time and cost
- Improve profitability
- Discourage high employee turnover
The ultimate result from accomplishing these goals is about understanding employee motivation, supporting development, and helping them find the best path forward -- which can be within the organisation or outside of it. However, problems with performance management systems – IT-driven or manual workflow-based - can seriously impact an organisation’s sustained ability to create productive workforces that deliver optimal performance. Let’s review some common performance management problems and possible solutions that’ll put organisations on a path to better performance.
Seven Common Problems with Performance Management
Organisational performance management systems are the best way to measure and manage employee performance. However, not all businesses have performance management systems that either work well or deliver optimal value to the company. Here are seven common issues with performance management systems to focus on:
gaps: Organisations are unaware of the skills gaps in
individuals, positions, or groups that they manage. As a result of this lack of
awareness, managers are often blind to the skills possessed by their employees,
and those needed by the organisation. 
performance activities: There is a lack of
regular performance review and management activity. As a result, organisations
remain unaware of performance issues festering or entrenched within the
workforce – until the next scheduled performance appraisal.
of Objective Assessment: Too often, employee performance is left to the opinions
of a manager. Needless to say, even the most effective manager’s objectivity
may be questioned if they deliver less than glowing evaluations.
job descriptions: In most organisations, the job description is the primary
tool against which performance is measured and managed. With irrelevant or
vague job descriptions, employees are left guessing what their performance
expectations are, and managers struggle with managing those vague
insufficient, as a performance management measure, to only let employees know
how well or poorly they perform. Feedback must not only review and highlight
performance gaps but must also include clear paths to performance improvement.
of formal appraisal systems: One issue with performance management systems is
that they are often too formal. These systems are inadequate because they are
typically scheduled as an annual or bi-annual process and often conducted using
a template/cookie cutter-based system. Over-reliance on solely formal appraisal
systems is often inadequate when it comes to timely and in-the-flow-of-work
- Absence of a “plan” for addressing below standard performance: Highlighting performance gaps is of no value unless there’s a plan to address those gaps. Lack of a performance improvement plan leads to a wasted performance management opportunity.
these issues can not only lead to improved employee performance but can also
result in enhanced organisational performance. But, how do companies address
The Road to Better Performance Management
Here are some common-sense solutions to the performance management challenges discussed above:
Competency gaps must be highlighted for improvement and better performance
management, and then proactively addressed. Appraisers may suggest more
training, better supervision, or even assign coaches and mentors to address
performance activities: As part of a robust performance management system,
frequent appraisals, check-ins, and other feedback are essential. Don’t
restrict performance improvement feedback to just annual/bi-annual cycles.
Spontaneous (in-the-flow-of-work) management (observe, instruct, encourage,
coach, and evaluate) can lead to better performance at all levels.
of Objective Assessment: Suggested tools to address objectivity in assessments
include implementing systems such as 360-degree appraisal, on-the-job-assessment, management by objectives, peer reviews, and
job descriptions: Clearly explain an employee’s role within a team and the
larger organisation, discuss performance expectations, and ensure clarity
around how performance is measured. As part of the job definition, set
achievable and measurable (SMART) performance objectives. Link company goals to
an individual's job description, and their performance against those
root cause of such inadequacy often lies in either cursory feedback (“Needs
improvement” or “Work on communicating better”), or providing feedback long
after a potentially “teachable moment” has passed. Giving concise, yet clear
feedback, and across a broad spectrum of performance metrics, is a great way to
address this issue.
of formal appraisal systems: Performance management shouldn’t be primarily a
“timed” or overly formalised process. When managers and supervisors act as
front-line coaches, or “in the flow of work” or “in the moment” performance
appraisers, their actions will have a significantly better
impact on performance than the bi-annual or annual systems of measurement.
- Absence of a “plan” for below standard performance: As part of a performance management plan, implement a robust performance support system. Components of the plan include consultations and counseling, recommendations for additional training, suggesting refresher courses, continuous skills improvement, or assigning mentors.
Organisational performance (i.e.: profitability, competitiveness, brand loyalty, reputation, pricing power, market share growth) depends on a high-performing workforce. And getting employees to perform at optimal levels depends on better management of that performance. If supervisors don’t do a good job of performance management, or if inherent problems with performance management systems are continually ignored, organisations may also lose talented and experienced employees to the competition. If you'd like to learn more about optimising performance within your business, check out Kineo's performance management solutions using Totara Perform.
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