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The biggest con on planet business
Posted on: Wednesday, September 09, 2009
Following on from my post on incentive pay a lot of people have asked me about my view of performance management, so here goes.
Performance management systems are the biggest con on planet business - no performance management system I know of actually helps manage performance.
All performance management systems follow the same pattern - a meeting to set up some goals, some half year review to monitor progress and give support and an end of year appraisal to look at what happened (yes yours might have a few more meetings or whatever but I am pretty sure the overall principle remains).
Proponents of performance management systems will point to the fact that goal clarity is essential, that feedback, support and progress monitoring are critical and that assessment is necessary to sound performance. True. But here is my contention;
If you need a performance management system to do this your business has no leadership. if it has no leadership it cannot have great performance.
Great leaders do not need to be reminded to do all of these things. Great leaders listen, talk, are present and available, they challenge and support, they constantly review and discuss...
Performance management systems are designed inherently as resource and pay management systems (i.e. distribute a limited amount of financial rewards and promote or get rid of people). They are useful to that extent but do not help increase performance (they may, at a push, help you understand the performance of your business but do not in any way create it).
Before you contact me with tons of research (mainly generated by management consultants - of which I am one - with a view to selling more performance management projects) let me reassure you that I have looked at a lot of it and yes there is a correlation but that's not the same as a causality - the highest performing organizations have performance management systems but they also have pens and toilets and doors etc...
If you want performance get leaders to lead people not manage performance.
Rant over!
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