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Does Your Performance Management Program Hold Back Your Performance?

The Law of Unintended Consequences says that our actions can have unintended and often undesirable outcomes.  It is the ultimate irony that performance management, the key corporate process to “manage” performance, is often self-defeating.

I normally write as a business leader or a consultant but the human impact of performance management gives me the rare opportunity to tell a personal story of having my own performance managed.

Some years ago I was preparing myself for a performance review.  I had an idea of how it would go as I had worked for my boss for eight years.  He was a fiery, passionate leader who I would follow anywhere into battle, and I would always defend his very human failing, as I could see how much he cared about the business.  I had worked for him for so long, through several roles because I believed in him as a leader and as someone who motivated me to perform at my best.

As I reflected on the year, I knew it had been my best one for many years.  I was most proud of a piece of work that had been delayed many times because it was too big and too challenging.  But that year I had completed it, faster than I ever thought it could be done, with positive outcomes and no downside whatsoever.  In completing the project I had worked every hour when I wasn’t sleeping, tackled some really unpleasant and emotionally charged tasks and made sacrifices in my personal life that no one ever should for a job.  The project permanently changed the direction of the company.

My boss wasn’t much for feedback, and I am not particularly needy when it comes to feedback so we found ourselves at annual review discussing the outcome for the first time.  The only thing that I can really recall from the conversation was my boss saying “Good work but obviously I would rather it had been done much quicker……..”.  It was old fashioned “that was good, but…..” feedback.  The 1990’s praise sandwich.

It’s not that it was a bad appraisal, I was “scored” as achieving full potential.  I would be well rewarded in salary increment and bonus.  What made it bad was that my boss didn’t spot my emotional attachment.  I was the guy that sorted something that no one had been prepared to take on before but his assessment was that I could have done it quicker.  I was left flattened by the review.  They say that people don’t work for companies, they work for bosses and in my many years of experience this is true.  The unintended consequence of that review, which I am certain was intended to motivate me, was that I lost respect from my boss, I detached from the company vision and shortly afterwards I left the company.

The point of sharing the story of my appraisal is that although performance management systems come with the best of intellectual intentions they are often poorly designed and executed to deal with the modern workplace.  I wasn’t an office newbie in this example, I was a senior executive – but the point is that all employees have a basic need to feel that they are doing a worthwhile job and that they are recognized.

No matter how fiendishly well designed and complex a performance management system is it generally clunks incongruously against the culture that the leadership aspires to.  Most leaders will promote an inclusive vision that encourages team working towards a common goal and aims to break up silos.  However, performance management systems, in an attempt to control and homogenize performance, actually silo employees and stifle creativity.  In the past I have aimed to have performance conversations day in day out, often so subtle that the team member didn’t realize we had had a performance conversation.  However, the performance management system considered me “broken” as a manager as I was notoriously bad at completing the half yearly paperwork.  What was valued by the organization was a formal output rather than the quality of the conversation and it’s impact.

So, what are the key considerations when designing a performance management strategy that could integrate seamlessly into an engaging culture?


The leader’s time should be spent on quality conversations that make a difference.  I would guess, in the past, the systems that I have worked with would have the leader spend more time in calibration, distribution smoothing and pay review meetings than actually face to face with the employee.  Time spent on corporate administration doesn’t say “you are an important part of the company and your work is vital to us”. Leaders must be ruthless with their time and reinvest it from fruitless, never-ending management meetings and into quality face time with their people.


Systems love to have an outcome metric.  People not so much.  If employees understand that they are being forced into a bell curve distribution then they lose trust in the authenticity of the system.  Edward Demming wrote that “the merit rating…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”.  That is extreme but even if we only take a couple of adjectives it doesn’t sound like the kind of culture I’d aspire to!  Dump the grades and have the real conversations!


The words that I hear most often from the poorest leaders are “I will pick that up at their performance review”.  No, no, NO.  If it is important enough to be said it needs to be said now; and it needs to be said in the context of a coaching conversation.  Back to my bad appraisal – had my boss and I been having regular conversations he would have known how I felt about the project and that I was emotionally attached to the outcome.  Having the conversation belatedly and not recognizing my attachment to it belittled the work that I had done and the sacrifices I had made to complete it.  Which in no small part I had done to please him.  More frequent, more open conversations remove the element of surprise, the misdirection and the misconceptions. 

In my experience, lazy leaders love a performance management system as it “excuses” daily interaction and helpful coaching conversations in favor of a big annual dance where they hold all the aces in the conversation.  In general the people that are reviewed don’t like formal performance management and their performance does not improve as a result.   As leaders we always need to remember that we reached our lofty perches by standing on the shoulders of giants.  Our first concern if we intend to maintain that position should be to discuss performance the way our people need.  Ticking the performance appraisal box doesn’t cut it anymore.