Occupational Psychologist Memory Nguwi discusses the most common mistakes that companies make when introducing performance management systems
At face value every organisation wants to claim that they have a functional performance management system, however, in reality, there is no value added to the business by the performance management systems. In this article, I want to share my experience of implementing performance management system and point out the reasons why companies often fail to build a performance culture.
1 Implementing a performance management system because the Board said so. When you ask even some senior executives why they would want to implement a particular system of performance management and measurement you are informed that the board wants it. If your executives are not enlightened enough to see value in the system, it’s unlikely to be effective. Performance management systems only work when the top leadership (including the board) how the system will add value in terms of driving business performance.
2 Performance management not linked to the strategy. I find that sometimes, despite the best effort by HR professionals to link the performance management system to strategy, in the majority of cases there is no connection. Most performance management systems are job description driven rather than strategy driven. The challenge with anchoring your performance measurement system on job descriptions is that job descriptions are generic, static and do not speak to the strategy. The strategy, on the other hand, reflects the top priorities of the business and these priorities change from time to time and may never appear in a job description. The tendency by those charged with designing and implementing performance measurement systems to default to job description is the major drawback in implementing performance management systems.
3 Not involving the people. Most strategy documents are “elitist” in that they are known only by the top executives. It is not uncommon to have a situation in which the employees who interact with customers on a daily basis don’t believe in the what management is trying to introduce. They will offer very valid reasons that senior executives rarely pay attention to because they think that lower-level staff are not educated enough to understand the strategy. The sad reality is that most executives are extremely divorced from the reality that ordinary workers face on a day-to-day basis. As a result of this disconnect, the lower level staff will let you run with your strategy until you literally you get tired. They will offer some form of support in public but in private they will resist. Therefore, if you do not involve your staff in formulating the strategy, it is likely to fail.
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4 Implementing a performance management system because it is fashionable. Most companies implement performance management systems simply because others are doing it. This can result in systems that that clash with the company culture and are thus difficult to implement.. At face value managers and ordinary employees will accept the system but in private they will be whispering that it will fail. Take time to assess the current and envisaged company culture and assess how ready your business is to embrace performance management and measurement as a tool for driving business performance. Without this assessment and without proper preparation for the impending change process, you are wasting your time and resources.
5 Imposing a system on managers and employees. Whilst in a hurry to impress the CEO and other senior colleagues, HR rushes sometimes to implement without imbedding the system in a change management process that ensures people’s concerns and fears are taken care of. If this is not addressed, you often find that managers only carry out performance assessments when HR puts pressure on them to get it done.
6 Failure to differentiate between good and poor performers. If a system of performance measurement can’t distinguish between those performing to the required standards and those not meeting these standards, it is useless.
7 No consequence to what people do. Performance improves where people know that good performance will certainly lead to positive outcomes for them and bad performance will lead to negative outcomes. If that relationship is non-existent in your organisation you can forget about making a difference in business performance through your performance measurement system.
8 Validating your strategy. Your performance management system must be used to validate your strategy. This assumes that your performance measurement system is linked to the strategy. You can do an empirical analysis of your performance indicators and they should be able to inform you whether you are winning or not. It will also inform you which strategic initiatives are not contributing to strategic success.
Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker and Managing Consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm.
