Eight Signs You Should Revisit Your Performance Management Program

November 5th, 2014
Written by: Elizabeth Richards

According to an article in the Washington Post, Unhappy with your raise this year?  In Washington, you’re not alone, a recent “Towers Watson study (reports that) less than half (of employees surveyed) reported a clear link between pay and performance.”

You may be thinking:  “But how can that be?  Don’t organizations invest tens of millions of dollars in people, processes and software to do exactly that: establish a clear link between pay and performance?”

Yes.  But here’s the rub: that doesn’t mean those Performance Management programs are effective.  According to the Society for Human Resource Management (SHRM) Foundation’s Report titled, Building a High-Performance Culture: A Fresh Look at Performance Management:

“Overall, attitudes toward performance management are consistently poor. No more than 30 percent of those surveyed reported that their performance management system effectively establishes goals, provides feedback and actually improves performance.”

Is there any good news here?  Absolutely.  The same SHRM report states that:

“…Managers who engage in effective performance management produce extraordinary business results compared with those who do not. One study demonstrated 50 percent less staff turnover, 10 to 30 percent higher customer satisfaction ratings, 40 percent higher employee commitment ratings and double the net profits.”¹

So the question becomes:  Is your organization’s Performance Management program working or not?  Here are eight signs that can help give you the answer:

Eight Signs You Should Revisit Your Performance Management Program

1. Managers are resistant to using performance evaluations.
2. Use of performance evaluations is inconsistent.
3. The performance review process has a reputation for being perfunctory, burdensome and/or annoying.
4. Performance evaluations just aren’t being done.
5. Managers don’t see value in the process or the form because they do not see a link between individual performance and company performance. 
6. You are having difficulty improving performance of the organization to align with your business objectives.
7. You don’t have a program at all—and employees are starting to ask why not.
8. The organization doesn’t have a way to differentiate between low, medium and high performers—so there is no fact-based way to know who to recognize, reward, promote or let go.

If you observe at least two of the above signs then it’s time to take action.  We’ll talk more about what to do in an upcoming post.

¹ The Ken Blanchard Companies (2009).  The high cost of doing nothing:  Quantifying the impact of leadership on the bottom line.  Escondido, CA: Author.