The performance management system a factory, nearly every midsize to large company in the world now has some kind of performance management system — a process that, in theory, should help people set and achieve goals that ultimately drive performance. Yet only 14 percent of organizations are actually happy with their performance management systems as they currently exist, according to the industry research firm CEB. Despite that, so far, only 3 percent of companies are making any significant changes to how they manage performance.
This permomance management of the system is very importante for a development the solution with the business of patner and client
The rest are engaged in superficial tinkering: altering the number of goals being set, shifting from a three- to a five-point rating scale, and so on.
This is a theory very important for a business class of a great economic success.
Mere tinkering isn’t enough. Research shows no link between changing the number of ratings people have, or altering the wording of those ratings, and any measurable impact on performance. It seems that we need to completely rethink our whole approach to managing performance.
Driving this need are seismic changes in demographics as well as changes in how work is structured today. Annual goals might have worked 20 years ago, but between new technologies and a rapidly changing economy, it’s hard for goals to be relevant for more than a quarter. Even quarterly feedback does little for younger generations craving to learn something useful every week from their boss. And consider the fact that most of the time, performance is only discussed with one manager — even when that employee is involved in a half-dozen emergent teams unrelated to his manager’s work. The nature of work has become more relational and creative than ever, with a greater need for collaboration, which some performance systems accidentally inhibit.
The first step in any difficult change program is acknowledging that your company has a problem. To recognize that problem, sometimes it’s necessary to give your performance management system its own performance review. There are many ways to do this, but an especially simple one is to implement a five-point rating scale for performance management itself:
Tier one: Needs to go
While your performance management system showed promise during recruitment, it has turned out to be a dud. It has failed to achieve any company goals. Worse still, no one wants to work with it anymore. It’s time to put this system out to pasture.
Tier two: Needs improvement
Your system has personality issues. Despite achieving a few goals and having good technical skills, it often rubs people the wrong way. Employees complain about its inauthenticity, inflexibility and glaring blind spots. In short, the system is underperforming and needs to have a breakthrough soon if it’s going to prove it deserves to stick around.
Tier three: Good, but inconsistent
Your performance management system is like the wind in summer. Things fly along, then there are long stretches of nothingness, as employees wait around for something better — feedback of any sort, a career discussion, any puff of positive wind in their sails. You wish your system raised performance more consistently throughout the year, but you can’t quite bring yourself to let it go because, sometimes, it works.
Tier four: Strong performer
Your performance management system does a solid job most of the time. It gives employees the feedback they need to feel appreciated once in a while and generally helps them understand how they can develop. While not a stellar system, you’re happy with what you have and can’t see yourself firing this system any time soon.
Tier five: Top performer
Your performance management system consistently motivates top talent, stretches midlevel performers and helps your low performers self-select out. When times are tough and bonuses are tight, your performance management system helps folks stay engaged for better times. Everyone who works with the system loves it.
How does your performance management system rank? If it is low, how long has it been at that level? Should you let your system languish another few years on a low tier, hoping it will improve? Remember: If you decide to rank your own firm, be sure to keep things confidential. No one likes internal feedback going public.
(David Rock is co-founder of the Neuroleadership Institute. He is also a consultant and the author of “Your Brain at Work.”)
© Harvard Business Publishing Corp. Distributed by The New York Times Syndicate
Author David Rock explains the need for a company to review its performance management system to ensure that employees are motivated to achieve company goals.
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