Stop Making These 5 Mistakes in Performance Management

By Bhatia Tushar


If you are reading this post, chances are you want to improve Performance Management strategy in your workplace.

You may have already tried few practices to improve and manage employee performance effectively, but it hadn’t worked in your favor.

Well, the reason could be simple. Your organization has a Performance Management system in place, but it doesn’t successfully connect employees with company’s vision and is not a source of employee development, coaching and recognition.

“To be effective and get good results for your business, performance management should be a year-round process without an end,” says Teala Wilson, a Talent Management Consultant.

Performance Management is incredibly important. Why?

Managing and measuring employee performance has gained prominence because it is INCREDIBLY important. Though some employers are still struggling to figure out a way, there has been an interesting trend among global organizations where performance management approach has transitioned to a development-centric and less dependent on relative ranking and normalization technique.

Yet the numbers of happy employers are low, as Only 14% of organizations realize their performance management system is worth investment.

The purpose of putting Performance Management in place is to minimize the gap between a company’s expectations and its actual results through improved workforce productivity. Performance Management should be an ideal, systematic process to improve employee effectiveness. The process can be made effective by

– Setting performance standards, monitoring progress and rewarding top performers

– Developing employee skills and motivating them to perform better each day

– Increasing employee-manager interactions

– Providing performance feedback more frequently

– Aligning employee goals with the company objectives

Implementing a performance management plan is easier said than done. The process is challenging, and it requires involvement of employees, managers, HR and the leadership. The agenda is to make people better at what they do, satisfied in their job role and keep them loyal in their job for long term. Following are the suggestions that would enable employers to build a highly productive workforce and yield better results.

Don’t Ignore Employee Experience

While organizations mainly focus on goals setting, compensation planning, performance appraisal and recognition methods, there remains a fundamental challenge to engage employees and enhance their experience.

The best way is to conduct surveys to know employees’ expectations. Ask yourself, do your employees feel motivated coming to office on Monday morning? The answer to this simple question would help you identify the areas you need to work on to improve employee experience.

Companies need a well-designed approach that is built on the foundation of engagement and work culture to focus on the employee experience holistically. Researches clearly state that Employee Experience (EX) is all about redesigning organizations with an employee-centric mindset, and not force people to fit into the old-school, unfair workplace practices.

Make Right Use of Technology

Though many organizations own Performance Management Software, yet their process fails miserably without producing desired results. Employee performance remains low and engagement levels drop with every performance appraisal cycle. Why? What could possibly go wrong?

The answer is – In many companies, Software Adoption is low. Companies have PMS, but they don’t use the software as intended. Sometimes, the complexity and usability of the software tool becomes the major obstacle.

Implement ultra-simple, intuitive Performance Management Software such that all stakeholders rely on the product to perform each performance-related task. For instance, managers and employees must use goal setting tool thoroughly to set, track and review goals, and then monitor progress continuously. If they don’t discuss goals and their achievements throughout the year, they aren’t making right use of the product.

Promote Frequent Employee-Manager Interactions

You might wonder how manager involvement can negatively impact a performance management process. Well, you must answer these questions first.

Do managers truly understand their team needs? Do they listen to employee concerns and make effort to provide solutions?

A Gallup report suggests that managers who understand and interact with their team members are more successful, and they provide better business results. One-size-fits-all approach does not work with employees. Thus, great managers must find ways to work out the differences and help their subordinates in every feasible way to keep them happy, productive and engaged.

Managers need to empower employees and make them feel valued. Their involvement at each stage in performance management process makes a real difference.

Don’t Be Biased During Performance Reviews

Daniel Pink, the Washington D.C.-based author says, “There’s no way to get better at something you only hear about once a year.”

Managers often rely on their memory to rate and rank employees during performance appraisals. It may result in biased reviews, unfair ratings and feedback.

Employees want feedback more frequently; more often than once a year! When performance reviews and feedback happen frequently and accurately, it results in increased employee engagement, improve employee productivity and reduced turnover. A research says 65% employees perform better when they receive honest performance feedback from their immediate supervisors.

Focus on Employee Development & Recognition

Low performance not only affects individual productivity, but has a negative impact on overall team performance. Help employees to fix performance issues.

Taking initiatives for employee development is must. Establish a culture of continuous Learning and Development that enable employees to upgrade skills and thrive in a work environment.

Each year, companies see early exit of employees due to dissatisfaction in Employee Development opportunities. There are gaps between what employees expect and what employers actually offer. On-the-job training, coaching and mentoring need to become an ongoing practice to build a productive workforce.