Performance management (PM) is a system in which manager’s work with their employees to set goals for the year. The manager will write up an appraisal and employees are rated and ranked numerically. Organizations claim the PM system is a way of improving performance and giving feedback.
However, in reality, PM is a way to give valued employees a bigger raise. Since managers couldn’t figure out a way to do that without being sued, they created the PM system which appears to be an objective standard. Unfortunately, there is a wealth of evidence suggesting that the typical PM system is broken and ineffective.
The first problem is that labeling people with a numerical ranking or rating generates a fight or flight response, impairing good judgment and creating a rapid reaction followed by aggressive movement. This response impairs the thoughtful, reflective conversation that is required for an employee to learn from a performance review.
Another issue with PM is that it reinforces the “fixed mind-set” in which intelligence is established at birth and remains the same throughout the person’s life. Employees who believe this nonsense will usually avoid difficult challenges at work for fear of receiving a negative performance review, https://wedmont.com/ therefore preventing an opportunity to grow and improve. The “fixed mind-set” has also been shown to contribute to cheating out of fear of failure.
A 2013 survey by the Society for Human Resource Management found that only 23 percent of managers said that their own PM system was above average. And data from the Corporate Executive Board (CEB) showed that 95 percent of managers are dissatisfied with their company’s PM systems.
While the PM system isn’t working, management can’t simply come out and say “We want to pay the important employees more.” So how are we supposed to improve performance while also deciding who gets a bigger raise, bonus or promotion while appearing to remain objective? It’s a sticky situation.
Organizations’ need to systematically build a collective purpose throughout the organization. This is not a mission or values statement but a short, energetic, passionate statement about the social good the organization creates. Once the purpose is established and the organization develops and implements a consistent path to mastery, performance will soar. This will all happen faster and less expensively than looking to teach everyone to speak differently as part of a flawed salary PM process. Once this happens it will be simple to determine who gets the biggest raise while also encouraging a growth-oriented mind-set and doing away with fight or flight responses.