Hard Talk HR - How Performance Management is Killing Performance

© 2017 PeopleFirm LLC All Rights Reserved www.peoplefirm.com1
How Performance Management
is Killing Performance- and
What to Do About It
M. Tamra Chandler
CEO and Founding Partner,
PeopleFirm

author founder human

© 2017 PeopleFirm LLC All Rights Reserved www.peoplefirm.com
in a few years
3

1) What is your perspective on your organization’s
current approach to performance management?
1. Love it
2. A few issues, but generally OK
3. Needs a reboot!
POLL

POLL
2) If you want to reboot and haven’t, what’s holding you
back? (Select all that apply)
1. My boss(es) will never buy it
2. We’re not sure we can trust our managers
3. Unclear how to determine rewards without ratings
4. Don’t see the value in changing
5. Legal will have a fit
6. We’ve invested too much in our current process
7. Other

http://www.peoplefirm.com/pmsurvey/
What’s standing in your way?
1. determine rewards without ratings to fall
back on (45%)
2. not trusting their managers to handle a
less proscriptive rating system (34%)
3. believe their leaders/C-suite would never
give up the traditional methods (28%)
Needs a
Reboot 71%

What we know about
traditional Performance
Management.
Rethink.
Shifting our thinking
about driving
performance.
Redesign & Reboot.
Getting you started down the
redesign path.
7

What we know about
Management.
Rethink.
about driving
performance.
Redesign & Reboot.
redesign path.

A common
approach…
and a
universally
hated
process
9

stand-up if
you love your
Performance
Management
program

three
common
goals
Develop
People
Reward
Equitably
Drive
Organizational
Performance
 Individual development
 Coaching & mentoring
 Retention of top performers
 Leadership Development
 Pay for contribution
 Promotion & advancement
 Total rewards
 Goal alignment
 Strategic communications
 Culture development

only 13% of managers and
employees and 6% of CEOs thought
their year-end reviews were
effective
4 out of 5 U.S. workers
are dissatisfied with
their job performance
reviews.
fewer than 1 in 4 HR executives
believe that their current PM system
reflects true employee performance.
46% said that annual
performance reviews are not an
accurate appraisal of an
employee’s work
more than 60% of employees
say performance review
systems rarely or never lead to
improved performance
Sources:
1-3 Reasons Employees Hate Performance Reviews (Leadership IQ, 2012), Survey of 48,000 CEOs, Managers,
Employees
2-Driving Breakthrough Performance in the New Work Environment (Corp Exec Board, 2012)
3- Performance Management, Meet the Wisdom of Crowds (Globoforce, 2012
4 - Source: Sibson 2010

The Eight Fatal Flaws
13
What’s gone
wrong?
What’s gone
wrong?

There is no evidence that traditional performance
management leads to improved performance.
A theory without evidence is just
a (bad) theory.
Fatal Flaw # 1
14

Traditional performance management impedes the
reception of feedback and limits honest dialogue.
Nobody really opens up with the
person who pokes them in the eye.
15
Fatal Flaw # 2

Performance reviews generally emphasize the negative,
rather than focusing on strengths.
16
Nobody remembers the good work.
Fatal Flaw # 3

No man (or woman) is an island.
17
The focus is on the individual, even though system or
organizational challenges often have a significant
influence on individual performance.
Fatal Flaw # 4

Fairness and standardization in ratings and the judgment of
performance simply cannot be achieved.
18
We are not machines.
Fatal Flaw # 5

We are not machines,
redux.
19
Review output is unreliable for making talent decisions.
Fatal Flaw # 6

Comparing people to one another erodes efforts to create
a collaborative culture.
20
Let me introduce you to your competition –
now play nice!
Fatal Flaw # 7

Pay-for-performance does not deliver
improved performance.
21
We are not Pavlov’s dog.
Fatal Flaw # 8

“The performance appraisal nourishes short-term performance, annihilates
long-term planning, builds fear, demolishes teamwork, nourishes rivalry and
politics… it leaves people bitter, crushed, bruised, battered, desolate,
despondent, dejected, feeling inferior, some even depressed, unfit for work
for weeks after receipt of rating, unable to comprehend why they are inferior.
It is unfair, as it ascribes to the people in a group differences that may be
caused totally by the system that they work in.”
– Dr. Edwards Deming
From his book Out of Crisis:
Deadly Disease #3 - Evaluation of Performance, Merit Rating, or Annual Review
22

We are not machines.
Fairness and standardization in ratings and
the judgment of performance simply
cannot be achieved, especially across
positions.
Let me introduce you to the competition –
now play nice together!
Comparing people to one another erodes
attempts to create a collaborative culture.
We are not Pavlov’s dog.
Pay-for-performance does not deliver improved
performance.
Which three
Fatal Flaws
would you
most like to
leave
behind?
Nobody really “opens up” to the person
who pokes them in the eye.
Traditional performance management
impedes the reception of feedback and
limits honest dialogue.
We are not machines, redux.
Review output is unreliable for
making talent decisions.
A theory without evidence is just a (bad) theory.
There is no solid evidence that the process motivates
people or leads to improved performance.
No man (or woman) is an island.
The focus is on the individual, rather than the
system or org. – even though system or org.
challenges often have a significant influence
on individual performance.
Nobody remembers the good work.
Performance reviews generally
emphasize the negative, rather than
focusing on strengths.
POLL

What we know about
Management.
Rethink.
about driving
performance.
Redesign & Reboot.
redesign path.

The Eight
Fundamental
Shifts

Shift from: Need to know
Shift to: Transparency
26
Open the door.
Fundamental Shift #1

Open the door!
º create a culture of transparency…
from to
Managers select people
movements
Open roles are shared org-wide
Salary, bonus, and profit sharing
with limited transparency
Elements of salary, bonus, and
recognition are shared org-wide
Individual goals set with
manager
Individual and team goals shared
org-wide

Shift from: Management-driven
Shift to: Employee-Powered
28
Give the steering wheel to
your employees.

Give the steering wheel to your employees!
º create a culture that honors employee driven development…
from to
Limited visibility or tools into
how to advance my career

Shift from: Past performance
Shift to: Future capability
30
Change your focus.

Change your focus!
º create a growth mindset culture…
from to
“growth” mindset
Growth
coaching
Performance
feedback
Growth
coaching
Performance
feedback

Shift from: One size fits all
Shift to: Customized and nuanced
Abandon uniformity.

Abandon Uniformity!
º create a culture that celebrates diversity…
from to
One process and toolset
for all employees

Shift from: A chosen few
Shift to: Diverse input and rich dialogue
Welcome more voices.

from to
employee
team
performance leader(s)
capability manager
peers
cohorts coach / mentor
Welcome more voices!
º create a coaching culture
Manager Employee

Shift from: Control and oversight
Shift to: Managing by exception
36
Stop policing.
Start empowering.

Shift from: Individual metrics
Shift to: Shared commitments
37
Incent collaboration.

Shift from: Paying for performance
Shift to: Paying for capabilities and
rewarding for contributions
Get real with rewards.

Designing a
rewards portfolio
from to
Get real with rewards!
º create a culture of recognition…
A focus on annual
merit increases
2.68%

Welcome more voices to the
conversation.
Shift from: A chosen few
Shift to: Diverse input and rich dialogue
Incent collaboration.
Shift from: Individual metrics
Shift to: Shared commitments
Get real with rewards.
Shift from: Paying for performance
Shift to: Paying for capabilities and rewarding for
contributions
Give the steering wheel to your employees.
Shift from: Management-driven
Shift to: Employee-powered
Stop policing, start empowering.
Shift from: Control and oversight
Shift to: Managing by exception
Open the Door.
Shift from: Need to know
Shift to: Transparency
Abandon Uniformity.
Shift from: One size fits all
Shift to: Customized and nuanced
Change your focus.
Shift from: Focus on past performance
Shift to: Focus on future capability
40
What are your
top three
Fundamental
Shifts to
include in
your future
approach?
POLL

What we know about
Management.
Rethink.
about driving
performance.
Redesign & Reboot.
redesign path.

stay true to
a few core
ideas

avoid the
knotted
solution

Drive
Organizational
Performance
Develop People
Reward
Equitably

select the
right frame
build your
custom bike

plan the journey

lead the leaders

invite the right
people to the
conversation

align on your design principles

www.peoplefirm.com/sketchbook
Create
your first
sketch
today...

crowdsource your design priorities
Leaning towards “Develop People” Leaning towards “Reward Equitably”
Leaning towards “Drive Organizational Performance”

address
all six
categories

final thoughts…
53
There is no 1 right
answer
The best design for you,
won’t be the best for the
next guys
New solutions are often
more simple
... there are some bad ones
... good designs reflect the
culture, talent, maturity &
strategy of the organization
... getting there is rarely
simple

www.peoplefirm.com
Join our conversation.
Templates and content available at…
www.thePMReboot.com
M. Tamra Chandler
mtc@peoplefirm.com
o. 462.462.6463

Hard Talk HR - How Performance Management is Killing Performance

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