Is Your Performance-Management System Broken?

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Jul 31, 2013, 12:00 ET

NEW YORK, July 31, 2013 /PRNewswire/ -- The state of performance management is awful, begins The Conference Board Review® Summer 2013 cover story, "Performance Mismanagement." In the article, senior editor Vadim Liberman reveals the truth: It really is in need of a major overhaul.

Liberman worries that organizations continue to use Band-Aids to make repairs to their current systems, "not realizing that they can't fix what isn't broken—because it never worked."

A main problem is that organizations have gotten accustomed to the counterproductive notion that attaining results requires appraising people based on some form of management by objectives. "However, such assessment by numbers only incites animosity, bitterness, cynicism, and mistrust," says Liberman. Let your people set goals, Liberman suggests, but don't judge them against whether they've accomplished them.

"It's time to consider reconfiguring performance management around input, how one works, rather than output, what one produces," Liberman writes. That is, assess people less on results and more on how employees exhibit behaviors and skills necessary for a job. Forget SMART goals, instead, corporations should focus more on identifying role-relevant activities and competencies to help employees—and ultimately the company—succeed.

To be clear, Liberman acknowledges the importance of achieving results. His main argument, however, is that to do so, businesses must stop rewarding and punishing people based on variables beyond their control. And in fact, the higher up in the organization the executive, the less influence one has over results. Why, then, base performance management around accomplishments and failures beyond people's control? Rather, it makes more sense to evaluate what employees can manage—their behaviors. This, in turn, will sometimes lead to rewarding people even when they fail. Unfortunately, companies rarely do this, and when they do, they do it wrongly.

"In an unrelenting pursuit of results, we don't pause long enough to contemplate whether the current method is the best method." In the article, Liberman suggests provocative, new ways of pondering performance management—because ultimately, no flowchart or PowerPoint presentation will effectively patch what is currently a botched process at most companies.

Source:
"Performance Mismanagement"
The Conference Board Review®
Summer 2013
http://tcbreview.com/summer-2013/performance-mismanagement.html

About The Conference Board Review®

For more than 35 years, TCB Review has been the thought-leader magazine of The Conference Board. Founded in 1976 as Across the Board, TCB Review is a journal of ideas and opinions with a clear mission: to raise questions you hadn't necessarily thought to ask—about how to run a business in a time of uncertainty and relentless change, about a corporation's proper place in a world transformed by new attitudes and awareness, and about how corporate leaders can best serve both stockholders and stakeholders...especially when the planet itself is a stakeholder.

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