Life,  Wealth

Avoiding the 5 Common Pitfalls of Performance Management

“Performance management trap” is an old topic. As early as 2016, DDI Consulting Company released a research report “Reinvent Performance Management into a Leadership Process (Reinvent Performance Management into a Leadership Process)”. Performance management 5 trap:

1. The purpose of implementing performance management is not clear;
2. Let performance management carry too much weight;
3. Overly complex management procedures;
4. Insufficient attention to leadership skills;
5. Out of touch with the starting point of motivating employees.

Before sharing the understanding and experience of the 5 traps of performance management, I would like to briefly explain the four components of the complete performance management system that I understand:

target management system

Clarify the company’s strategic goals, business priorities, department goals and responsibility focus, determine the key tasks of each position, and formulate effective target measurement indicators;
Traditional goal management decomposes strategic goals from top to bottom in the organization, from the company’s organizational goals, to process goals, to job goals, level by level, and decomposes indicators; in turn, from bottom to top, the key results of each position are achieved , The department/process goal is achieved, and finally the strategy is implemented.
Target management selects the appropriate target tool based on the company’s certain management process and data foundation.

Internet companies and new fields and industries have undergone great changes. First of all, the organizational structure is often not the traditional hierarchical model. Under the structure, it is difficult to directly disassemble the organizational goals. Secondly, the nature of the business itself in this type of company has many changes and uncertainties. It is more encouraged to continuously explore, try and form new processes. Bottom-up Objective Key Mission Commitments (OKRs) to achieve results.

Therefore, OKR is more an indicator in the process, and KPI is mostly an outcome indicator;
The core word of the objective management system is ” synergy”. To support the work objectives of each position through job analysis is related to the strategic objectives of the organization. It is not enough to only focus on the department and not pay attention to the situation of the whole company and the overall situation; therefore, a good goal system must be coordinated with the strategy.

performance management program

It is a complete management closed loop including performance goal setting, performance coaching, performance examination, and performance result feedback;
Goal setting is in line with the concept of starting with the end in mind, but the goal will not be achieved by itself. The performance management program is a process management that supports the achievement of the goal , which is in line with the PDCA process. From the planning at the beginning of the year, the inspection in the middle of the year to the evaluation process at the end of the year , the most important thing is the continuous feedback in the process .
At present, many companies implement Frequent Feedback, that is, timely feedback, to support employees to obtain information and take corresponding actions.

Performance Appraisal System and Implementation

Performance appraisal principles, performance appraisal process, appraisal result grade, application system and implementation;
The performance appraisal system should address how to use the appraisal results to motivate employees who have achieved excellent performance. It can be a performance bonus or a basis for salary adjustment. Some companies will set a special salary adjustment ratio for high-performing outstanding employees; some companies will require performance appraisal results for employee promotion; The two latitudes of high performance and high potential are placed in the Jiugongge to identify internal key talents. It is these results incentives that allow employees to see their next position or path of development.

Performance management organization and responsibility system

Roles and responsibilities in performance management , and macro factors that affect performance management.
When people mention performance, most of the time they feel that it is the responsibility of the “boss”. If we agree that the starting point of formulating and implementing the performance system is to help employees grow and succeed, then this system is to encourage and support each employee to be responsible for themselves.
As a manager, from the beginning of goal setting, invite employees to set his work goals together, and turn a direct assignment of a task into a touching and sincere cooperation! ” Cooperation ” means actively thinking about what will be the result of the department after his work goal is achieved? What is the impact? What is the value and meaning that you bring to yourself? Similarly, is this goal challenging or very easy for him? If it is a big challenge, what kind of resources and support does he need? In addition, when he wants to get a bigger opportunity, how does he consider a higher dimension in his goal setting, and then get a possible development opportunity. So when we all agree that helping employees grow is the starting point of the performance system, it breaks the relationship of who is responsible to whom, and promotes a new “cooperative” relationship .

Based on the above foreshadowing, let’s look at the five major performance traps together.


The purpose of performance management is not clear

Before the company prepares to implement a performance management system or prepares to implement a performance management system, it must be clear what the purpose of performance management is. If the timing is not ripe, it can be carried out step by step to simplify operations.

Not long ago, a company came to me and asked me why I wanted to do performance. The thing is like this. In the first few years of the company’s development, until the end of the year, the boss has been calculating the details of the performance and then making a decision to issue bonuses. It has grown until the beginning of this year. I brought in several department executives, and as the end of the year is approaching, I have concerns about the previous model that I decided on, and I want to set up a performance management system so that bonuses can be allocated.

As for whether performance should be considered for bonus distribution, some research institutes show that 45% of business indicators and bonus distribution plans are formulated by business operations or business executives, about 20% by financial accounting, and only 30% by HR Implement the performance management system.

The assessment results in the performance management system can be applied and distributed, but if it is only to achieve bonus distribution, there is no need to pull the banner of performance management. It is enough to directly allocate performance indicators and bonus distribution plans, which is simple and transparent.


Performance management is overloaded

I have encountered some companies, and after implementing the performance management system, I feel that the performance of employees is fully grasped. As long as it is related to people, I feel that this is something that should be managed by performance, and then the performance evaluation must be able to reflect and solve it. , in addition to the performance management system, we have other rules and systems, so the internal management of the organization is a series of governance measures, such as the financial reimbursement system, procurement process rules, and safety systems. All systems are You can go to the bottom line and red line of everyone’s behavior.

In addition, there is no lack of more operations such as the mandatory distribution of evaluations. There are also many companies that directly combine the salary adjustment at the end of the year with the performance evaluation, whether to adjust the salary, the proportion of the salary adjustment, etc. The interview meeting is directly held during the performance evaluation interview , In order to “motivate” or restrain employees, over time, except for tasks that can affect salary adjustments, employees will no longer work hard on other related tasks.

In fact, the performance management system is not omnipotent. The performance management system hopes to motivate people, not to punish and make decisions.


overly complex management procedures

In many cases, the company’s management system requires continuous standardization and refinement in pursuit of rigor, and HR cannot avoid making performance management a super complicated professional system in the complexity and attention to detail. The more complicated the system, the more life-threatening The more disgusting, the easier it becomes a display.

Deloitte wrote in “Real Performance Management” published in 2015: “Time-consuming performance management” is like this. At the beginning of each year, more than 65,000 Deloitte employees will set personal goals. After a project is over, Each employee’s supervisor gives them a grade based on how well they complete their goals. Supervisors also comment on how well employees are performing. These assessments are also factored into the year-end review, a lengthy “consensus meeting” in which an “advisory panel” discusses employees’ performance over the year compared to their peers. Deloitte later abandoned the scoring system, and instead used 4 simple questions to measure how the project leader would treat the team members, instead of paying attention to the team leader’s opinion of the team members.

Performance management hopes to motivate employees and improve performance, allowing managers to spend time on complex ratings and reviews to help employees improve performance and career development, from looking back to the future.

Insufficient focus on leadership skills

As mentioned earlier, the process management of performance management, the role of the leader is too great. He needs to have a correct understanding of this system, help employees do job analysis, support employees to set reasonable goals, and understand in the process A series of management interactions such as current situation and coaching staff.
Timely response and interaction place high demands on leadership skills, what is the next possible trend for us? What kind of adjustments and plans do we have to make? Or what difficulties did we encounter in this process and what kind of support do we need? Are there sufficient resources? For example: Because of the setting of breakthrough goals, how to support employees to obtain training, experience or project practice that needs to expand relevant skills? Another example: what kind of milestone tasks or stage small goals are there in the process of goal achievement? When the stage small goals are achieved, how to feed back positive information to help employees increase their energy. It is also necessary to conduct a timely and efficient performance meeting because the small goals of the stage have not been achieved.
These coaching requirements outside of performance reviews are too difficult. There are too few leaders who can provide coaching and coaching to employees. The reality is that many more urgent things occupy the priority list of leaders. Coaching employees is important but not urgent, often a rare interview once a year.

Out of touch with the starting point of motivating employees

Performance management has gone through countless changes, and it is not easy to agree on the starting point that can be understood and recognized by everyone. A cognition of performance management that I appreciate is that the essence of performance management is to help employees grow and succeed.
Employees set goals that are coordinated with the organization’s strategy on the job, experience practice in the task to achieve the goal, win success, and obtain the necessary learning resources on the organization platform to achieve growth. Promote the continuous growth of the organization’s performance through the growth of employees and continuous efforts and dedication on the platform of the organization.
Finally, it is concluded that if you want to build a performance management system, you need to have a certain degree of preparation.
First, the company has a basic management process and understands the bottlenecks and difficulties of process control. At least the business department has clearly drawn the sales funnel;
Second, the indicators we want to manage need some basic data collection, because there is no data how to see the trend, difference and other change information;
Third, the quality and skills of the management team, which can clearly explain the task requirements, decompose the goals clearly, and be able to coach employees.

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