The problem with performance management systems

Most performance management systems tend to be very rigid and often creates dissatisfaction and dysfunctional behaviours amongst employees.

These are often due to such systems being disconnected with the firm’s strategic objectives and its stakeholder needs.

An example is most firms want to improve performance – be it profits or service. Yet when performance management targets are identified, people are measured on things that have no or very remote connection to these objectives. Then management feel that staff are not doing enough to advance the firm’s objectives. Thus the dissatisfaction when it comes to appraisals.

Another angle to the problem is when determining the staff targets and KPIs, the discussion is frequently a negotiation with a view from the staff to achieve a good rating during appraisal. Hence, low balling those targets. The supervisor will either force a higher target through force of will or simply forget about it. Both approaches are disastrous.

Yet, every year many firms continue with this tedium and wonder why the firm’s results are not what it needs to be.

This is why it is high time we radically change this obsolete practice and explore something else.

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