December is the peak time when you, as a manager, have to wrestle with the notion of how best to address the performance management process in your organisation. Your team members may have delivered great performance throughout the year but you have to acknowledge many other aspects apart from this. It is the company mandate after all: a process that has to be followed strictly as per the guidelines (many years old?) at the end of every year.
Are you a manager or HR specialist who has been repeatedly performing the same set of steps year after year? Then there is a very high probability that you are not getting measurable results. In this case, you may want to analyse your performance management process with a lens on how to manage poor performance.
Check if the method you are using is suited to your business model. It could also be that your performance management software is not compatible with your organisational culture.
You may have a culture of continuous performance feedback. But there is no way of tracking honest feedback given to the employees throughout the year. You could be missing out on important pieces of information simply because you chose the wrong software.
What causes poor performance management?
There are inherent biases in people that hinder the way they rate and evaluate – and most understanding them can help in approaching the process of managing poor performance
Contrast effect occurs when ratings of high or low performers get compared with others, making the manager unconsciously perceive the contributions of the team member wrongly, and affecting the results.
Central tendency bias occurs when managers rate employees similarly to avoid giving too high or too low ratings
Personal bias occurs when manager’s rating of an employee’s poor performance, or good, is affected by the attitudes, beliefs or preferences of an employee that has no impact on their work
Strictness bias happens when managers try to motivate employees by giving average ratings to high performers and low grades to poor performers
Leniency bias makes managers be lenient with their ratings, and give high ratings to average and poor performers
What happens when performance management is implemented poorly?
A poor performance management system (PMS) has negative effects on the job behaviour and causes employee performance issues. If managers don’t ensure their employees’ outputs are compatible with the organizations’ goals, the implementation of PMS will most likely not succeed. Since a PMS provides vital information on the work-integrated learning skills of employees, finding compatibility between employees and the objectives of their organizations becomes difficult in its absence. A poorly implemented PMS leads to ill managing poor performance, and lack of job satisfaction, which impacts employees negatively. The self-esteem, productivity levels and outputs of employees fall drastically if their performance is not recognised or discounted. Recognition for effort matters to many employees, and when those with poor work performance get similar ratings to those whose employee performance is high, there will be murmurs. Ideally, some employees need to be put in a performance improvement plan to manage poor performance – but with a poor PMS, it might not be possible.
7 Signs of Poor Performance Management Process at Work
- No idea who is responsible:
Are employees aware about who is responsible for managing poor performance? Is it the HR department, their manager or peers, or themselves? Traditionally, only managers were responsible for performance management which often led to biased opinions and poor performance.
However, today employees do not work in isolation. There are many interdependencies within a team, let alone the department. Thus, the responsibility does not lie with one person alone. Every member has to play a part in the performance management process, no matter how small it may appear.
- Higher attrition or turnover:
Does your company have a high attrition or turnover rate as compared to other companies in the same industry?
If the answer is yes, then it’s definitely time to identify the root cause of it. Many times, the reason behind this is poor performance management of employees. There are 4 reasons why employees stop being engaged at work:
- lack of recognition
- no guidance for growth
- lack personal development & growth
- not receiving constructive feedback
- Excellent strategy but no execution:
Your top management takes painstaking efforts while creating the organisational strategy. Is it being executed in a manner imagined by the management?
Due to a broken or inefficient performance management process, employees have no idea how their everyday work or their individual goals contribute to the overall strategy. It is important to bridge the strategy execution gap to ensure everyone is progressing in one direction. You can involve marketing communications too, to craft the messages better.
- Consistently not achieving goals
Another effect of incorrectly managing employee performance is that they repeatedly miss achieving their goals. It does not always mean that they are sub-par employees. It could be because there is a significant mismatch between their goals and actual outcomes due to lack of clarity in conveying expectations. This gap takes place due to an inefficient goal setting process.
Educate your management on how to effectively reinvent goal setting and subsequently performance management in the company. Check how Google used the OKR methodology to get better at setting and grading goals. Replicate the methodology or start setting SMART goals to get better. Help employees align their goals with the overall company values and eliminate confusion.
- Subjective or biased feedback:
A flawed goal setting process ultimately leads to setting goals that are not measurable. It gets difficult for managers to quantify performance in such cases. They are also unable to provide constructive or timely feedback or end up giving employee feedback that appears subjective and biased, rendering the whole process unfair.
The process should help you guide your employees on a continuous basis, provide steady mentoring and constructive feedback. Since performance is measured on the basis of facts and figures, there is little scope for you to give subjective or biased feedback. Conducting regular performance reviews can help managers identify poor performers, and they can focus on providing coaching (and ensuring they give negative feedback in a positive way). When the entire team knows that the manager and the organization are invested in their overall growth, the work environment is aligned with growth – and they strive hard to improve performance – work on their strengths and overcome weak points.
- Managers afraid to break the status quo:
Performance management is much more than a simple box-checking exercise. Some managers do not like confrontation so despite shortcomings in expectations, they blindly follow the process. But sometimes, poor performance needs to be called out as poor performance. Without this, the performance process management can become a bunch of ineffective workplace practices.
If employees are not performing as per their potential then you should make it a priority to get them back on track with timely feedback. Not just finding faults but by giving inputs on how to overcome these performance problems.
- Lack of personal development initiatives:
One of the most important aspects of performance management is helping employees develop themselves, by identifying individual performance problems. It is as important for them to move forward in their career as it is for the company to achieve its goals. If employees feel that they are becoming stagnant in the organisation, they will look for better opportunities. You definitely don’t want the good ones to jump ship. It is your responsibility as their manager to make sure they grow and become a better version of themselves.
Poor performance management can lead to huge losses to the organisation. Thus, it is best to keep a constant lookout for these signs in the workplace. A focus on making the performance management process fair and transparent ultimately leads to the organization performing better as a whole.