The Real Reason Your Company Stinks at Performance Management

Sep 7, 2016

It’s no secret that companies struggle to get performance management right. High profile organizations, like GE, Microsoft, and Deloitte, have announced sweeping changes to their performance management practices. And for every company in the headlines, there are dozens more planning to go rating less, get off the annual cycle, crowdsource feedback, or try something/anything to make it better.

Unfortunately, the historical track record on performance management process changes isn’t great. Remember when everyone was going to forced ranking? Or that time you went from a three-point scale to a five? Or from paper to automated? Too often, these changes play out something like this:

1. Everyone hates the existing process.
2. Process change is announced with strong executive support.
3. Extensive training is completed on forms and systems.
4. The new process blows up and everyone hates it.

Why is that?

In the post mortems on these initiatives, it always comes out that managers simply didn’t have the skills to have effective performance conversations. The quality of goal setting, feedback, coaching, and development planning was low. If anything, the process change just managed to shine a giant spotlight on fundamental deficiencies in skills and behaviors.

At Cambridge Leadership Group, this doesn’t surprise us. Our work is based on a decades of scholarship which illuminates why human beings consistently struggle with these tasks. For starters, we avoid conflict like the plague. Under even mild stress, we engage in predictably dysfunctional patterns of communication where we fail to raise the most important issues, don’t explain what we really think, and alternate between piling on negative feedback and then softening our language to avoid upsetting anyone. Left to our own devices, we’re just bad at this stuff and no amount of process engineering alone is going to fix that.

The good news is, there’s a huge opportunity to have a positive impact on employee performance and engagement, if you pair a good process with real change in manager behavior.

For over 20 years, Cambridge Leadership group has been helping companies transform managers’ ability to have effective performance conversations, and the impact is real. One organization, whose managerial ranks we trained and coached, saw an 8.92% productivity increase in 12 months and measurable cost savings of £60.92M. Those kinds of results take work, but the payoff is worth it.

We’d love to hear about your organization’s performance management challenges. If you’d like to learn more about our approach, please contact us.