The 3 Performance-Management Mistakes You Need to Stop Making Leaders want to change their performance-management strategy. They're just unsure how to do that. Here are some ideas.

By Heather R. Huhman

Opinions expressed by Entrepreneur contributors are their own.


With the start of the new year, everyone is excited about the possibilities to come. "This year," business leaders think, "performance management will be different." So, they set goals for employees and conduct annual reviews in hopes of inspiring them to do even better.

Related: 3 Changes Your Company Should Make to Performance Management in 2017

But before too long, those leaders' focus shifts to budgets and profit margins. And, when several key employees quit, the number one priority becomes recruiting and retention. Then, several big clients move to a competitor after experiencing subpar service.

Soon, it's the end of the year again, and leaders are again left asking themselves, What went wrong? They had such high hopes in January, but by December productivity and morale are down, and goals haven't been met.

This all-too-common story is the reason many are rethinking their approach to performance management. A December 2016 survey of 244 organizations from the Institute for Corporate Productivity found that 67 percent were planning changes to their performance-management strategy.

But the issue most leaders were unsure about was exactly what adjustments they should make.

If this sounds like you, start by identifying the bad performance management habits you need to break in 2017. With that out of the way, you'll find easier to build a new, improved strategy. Here are four habits to leave behind:

1. Ignoring the signs

Performance management is like a web that connects many aspects of a company's success. When it's ineffective, evidence will pop up in everything from employee engagement to company growth. The trick is being able to identify the signs and how they track back to poor performance management.

"High turnover and low employee engagement are two common-sense yet tell-tale signs that traditional performance-management strategies aren't working," Vip Sandhir, CEO and founder of HighGround, an employee engagement software provider, told me.

According to Sandhir, signs of decline in the metrics signal that employees aren't getting enough ongoing feedback. They can't tell if they're meeting expectations and may become frustrated with their work.

"Stagnant growth and lagging adoption of new skills shows that employees aren't working with their managers enough to truly meet their goals and advance in their careers," Sandhir points out.

The takeaway? Track metrics related to these signs, so if they decline, adjustments can be made before it's too late.

Related: All You Need to Know About Performance Management Without Ratings

2. Setting vague goals

"In my experience, the most common mistake employers make when evaluating employee performance is failing to establish a clearly defined set of goals and key performance indicators," says Brandon Seymour, CEO and founder of Beymour Consulting.

Instead of making performance metrics trackable, organizations give employees vague instructions to improve their weaknesses. Unsure how to achieve these milestones, employees are left unmotivated or, worse, unappreciated for what they excel at.

"When evaluating the performance of an individual employee, it's important to assign a unique set of goals that pertain to a specific role," Seymour says. "This way, organizations can see how individual employees are performing independently, and employees can understand which specific aspects of their performance need improvement."

Considering the wide range of goal-tracking softwares now available, there's no excuse to not have a system in place that encourages managers to set concrete goals for their team. But, to make the best use of those programs, managers need to know how certain skills affect performance so they can find ways to measure progress.

GamEffective, for example, makes it easy for users to set goals and tie them to key performance indicators (KPIs). Both employees and managers get real-time information about how an individual is performing. Once both parties are on the same page, it's easier to see which areas need more focus in order to achieve a specific goal.

3. Using subjective scoring

Ranking systems have long been used to quantify and compare performance management. Being rated a "1" out of "5" on a specific skill signified to both employees and managers that improvement was necessary. However, there's one major flaw in this method of feedback: a lack of consistency in what constitutes each level.

"Often, scores are given arbitrarily, with managers varying in how tough they are at ranking team members," says Lori Scherwin, founder of Strategize That. "Some are fair, some are easy [in order to promote] goodwill; and others are harsh, to generate higher productivity."

Without an agreed-upon rubric, performance rankings have no value, for both managers and employees. "[Random scoring] leads to mistrust and a lack of belief in the system," Scherwin points out. "Ultimately, when performance management is unfair -- or even seems unfair -- you lose the engagement of your team, which can cause negative feelings and turnover."

Scherwin suggests that instead of ranking employees, it's best to have a balanced approach to performance management. Rather than identifying and focusing on the negative, managers should be encouraged to discuss the positive as well, so employees know their strengths and are rewarded for positive behaviors.

4. Putting off performance discussion meetings

It's a common, but bad, habit for leaders to push back performance discussion when something else pops up. Even if a meeting with an employee has been scheduled for weeks, that event is easier to move than an unexpected crisis.

However, just because something is easy to reschedule doesn't mean it should be.

"One-on-one meetings are one of the best tools in performance management," says Berrin Erdogan, a professor of management at Portland State University. "These meetings communicate care and support from the manager while ensuring a dialogue around performance. What makes them successful is their regularity and routineness."

When these meetings are constantly pushed back, they lose their value. And, as Erdogan argues, they end up wasting more of people's time than they would have had the meeting actually taken place.

"In the long run, these accumulated cancellations come at the expense of employee goodwill and timely feedback. It causes more constant interruptions of the manager's own work and creates the perception that the manager does not make employees or performance a priority."

All of which takes a lot of time and resources to undo.

Related: Interested in a Performance-Management System? Establish Trust First.

Performance management is something business leaders need to work at every day. It's not something that can be thought about once a year. That's how bad habits creep into the process. In order to really make improvements in 2017, these habits from the past need to be broken in the present so positive change can begin.

Wavy Line
Heather R. Huhman

Career and Workplace Expert; Founder and President, Come Recommended

Waldorf, Md.-based Heather R. Huhman is a career expert, experienced hiring manager and president of Come Recommended, the PR solution for job search and HR tech companies. She writes about issues impacting the modern workplace.

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