These are tough times for the poor old performance management system.  We have seen many companies dump them entirely, often due to the advice of Neuro theorists like David Rock who say that performance conversations turn on the amygdala and therefore make people defensive and resistant to learning.

I agree with Rock that many performance management systems do this, but I don’t believe that they have to.  Interestingly, a number of companies which abandoned performance management systems have now reinstated them because they found that they performed a function after all.

Don’t dump your performance management system. Implement some of the suggestions below and you will get much more value out of it.

  1. Make it outcome focussed. One of the most powerful things you can do with any job is to identify the outcomes it needs to achieve. At SACS we see hundreds of job definitions and they almost never identify outcomes.  For instance, “satisfied customers” is a key outcome of internal service roles like HR and IT, but when was the last time you saw this in a job description or performance plan for these roles?  This is the stuff which should be assessed, not endless lists of tasks or “KPIs”.
  2. Simplify it. I don’t believe I have ever seen a performance management system which was too simple.  They are virtually all more complicated than they need to be.  Human beings can’t pursue more than about five to nine goals at once, so a good performance management system should include up to seven outcome goals in total. That way any staff member can relate to the task of trying to achieve them.
  3. Remove all reference to values. I know people love this stuff, but as I have shown in other blogs, research evidence shows that values statements do not work.  They are often vague, judgmental and having people allocate scores to staff based on whether they think that they have obeyed the values statements will definitely cause defensiveness.

So, the ideal performance management system will include up to seven goals at the start of a cycle agreed between the staff member and the leader.  They should be unique to those two – the more tailored, the more relevant. The goals might relate to work performance, personal behaviours, career development and learning goals, but still, no more than seven.  The staff member should be an equal partner in developing the goals – this will reduce the amygdala response concern.

And then it should include – nothing else.  Of course, you will need a format for agreeing whether the goals have been achieved.  You will also need to build in an opportunity for resetting goals based on agreement between the staff member and the leader as the world changes.  The keys are simplicity, clarity and partnership.

For leadership roles you might like to include 360 degree feedback.  Click here to see SACS approach.

Andrew Marty

Managing Director

SACS Consulting

Andrew Marty