Yes, they do… The only problem is that they may be working AGAINST you.

Almost every organization invests a fair amount of time, effort and money in performance management systems and there is no shortage of formalized processes around conducting performance reviews and completing appraisals. Most people can relate to the dreaded performance discussion where they are asked to meet ‘certain’ performance objectives. However, more often than not, these performance objectives have certain fatal flaws that render the entire performance management process useless. Let’s take a look at some of the most common flaws:

Incomprehensible Performance Objectives
“Deliver on 2015 transformation roadmap: 30%”

Believe it or not, managers do end up putting these blanket statement in the individual performance objectives. This doesn’t surprise anyone because they are used to seeing these somewhat useless objectives in their scorecards. Also, employees think that what can’t be measured or described can’t really hurt them. They look at these objectives, sign off on the scorecards and get on with their day to day work. Unfortunately, no one is able to relate these types of objectives back to the individual being assessed. This typically happens when high-level strategic objectives (without proper context) are merely copied and pasted into individual performance scorecards. There is absolutely no way for the employees to determine how they could help realize the given objectives. This is like measuring the performance of an auto upholstery specialist against the objective; “Deliver the best-in-class sports car in 2016”.

Misaligned Performance Rewards
Performance rewards are used to incentivize the employees to do their best to help the organization be successful. The underlying goal is to ensure that the organization continues to propel forward by meeting and exceeding its corporate targets. While there is awareness around the need for performance rewards, many organizations fail to calibrate and align these rewards to the behaviour desired to bring about the organizational success. Consequently, they start to reward bad behaviour in the organization resulting in a toxic culture characterized by self-serving interests and lack of regard for the overall organization. For example, functional rewards for finishing work on a certain initiative (or project) are awarded solely based on silo’ed efforts without regard for impact to upstream or downstream functions. In essence, teams are rewarded for “finishing” their piece of work and passing it on to the next function regardless of whether it serves the overarching organizational needs or not. Any requests for rework or assistance result in a blame game where each function tries to protect itself by any means necessary.

Useless Rating Scale
What does ‘exceeded expectation’ ranking mean? As a lead on a project, are you exceeding expectations by delivering a project on time, on budget and as per the agreed upon scope. What if you managed the project well despite a change in scope? Are you meeting or exceeding expectations? What if there were extenuating circumstances in your project?

This is all too subjective to be forcefully quantified solely based on manager’s preference. There is a difference of opinion among managers as to what constitutes ‘exceeding’ versus ‘meeting’ expectations. From an employee perspective, is it fair for one manager to rank his/her employees as ‘exceeding’ for the same job performance that you received a ‘meeting’ expectations rating for? While no one expects this process to be perfect in the real world, this type of misalignment is quite obvious and devastating for the team morale. Again, like everything else, there is no ‘one size fits all’ solution but perhaps, a look at embedding stakeholder, customer (internal or external) and self-assessment feedback to assess performance could provide a few viable options to this problem.

What are your thoughts on this subject? What performance management practices do you use in your organization? Why do/don’t they help the overall organization?