Performance Management - Common Pitfalls to Avoid

The purpose of a performance management process is to optimize the success and contribution of each employee, team and ultimately the business/organisation. However, too often organizations do not get the full benefits from their performance management processes because they make one or more basic mistakes.

Here are just a few of the most common pitfalls to avoid.

1) Nobody is accountable for implementing the process. When implementing a performance management process, appoint a project manager to implement it. Make this part of their performance requirements for the year.

2) The Board think that performance management is ‘for everyone else’. For performance management to be successful it must be lead from the top and clearly linked to the business/organization’s strategies and goals.

3) Implementing a highly complex/comprehensive system. Start with the basics first. Use a simple paperwork system to record targets/objectives and an annual (or biannual) review of achievement. As managers and staff recognize the value of the process, more ‘features’ can be added (e.g. 360° appraisal).

4) Have a system that ranks staff. Ranking your staff can kill a performance management system if the only way that an individual can improve their ranking is to undermine the performance of others.

5) Setting vague or inappropriate targets. It is vital to set clear and realistic performance targets.

6) Having conflicting targets and measures. It is important to have congruent targets and measures across the organisation. For example, a target to reduce purchasing spend may seem an appropriate target for the purchasing manager. However, buying ‘cheap’ parts may conflict with an operation manager’s target to improve the reliability and output from his production equipment.

7) Reviewing performance inadequately, for example by focusing on one specific incident rather than reviewing the entire period which the review covers. Also avoid the "halo" and "horns" effects. Just because an employee performs badly in one area does not make his/her overall performance bad. The same goes for good performance. The key to successful reviews is factual data about an individual’s performance.

8) Not providing adequate development support for staff. One key aspect of the performance management process is the development of staff to provide them with the capabilities to achieve their targets. Do not ignore this aspect of performance management.

As stated above, the purpose of a performance management process is to optimize the success of each employee and ultimately the organisation. By taking steps to avoid the aforementioned performance management pitfalls, managers have every opportunity to realize this goal.