Most senior leaders are where they are because they understand that enabling their staff to perform at their best matters much more than anything they can accomplish alone.
While all managers engage in performance management, McKinsey’s recent report on CEO excellence found that tenured CEOs are particularly likely to find creating effective ecosystems a key personal strength. However, even the most experienced leaders find it incredibly difficult to manage performance effectively.
WTW’s survey report on performance found that only 16% of organizations in North America believe that they are effective in managing and paying for the performance of their staff. There’s a simple reason we’re not seeing higher hit rates on such a critical topic: Most companies are built with managerial efficiency, not employee empowerment, as the priority.
Ideally, organizations are designed to allow excellence to emerge without managerial intervention. In reality, most organizations design their roles and processes through the lens of managerial control rather than employee performance. This makes it difficult for positive feedback loops and organizational learning at the right time and at the right levels of the organization.
Fixing the multitude of issues that plague modern performance management is beyond the scope of any single article. However, we can start with employee-empowering course corrections by addressing three antiquated and misguided conceptions about performance.
You’re only measuring output
Performance management relies on the belief that employee performance can be accurately and effectively measured.
This belief is well justified by the fact that most jobs do have objective outputs that employers can tally and assess, be it sales quotas, widgets produced, or customer service tickets closed.
The problem is that employee performance goes much deeper than just the outputs. What employees produce is the very tip of the performance iceberg, with the bulk of the effort and employees’ experience lying underneath the surface.
Most performance review processes have a myopic focus on output and the perceived quality, as determined by either management or the end user. This approach omits the most important constituents of the performance experience, including heavy hitters such as effort levels and meaningfulness, overall satisfaction, mission alignment, and virtually every factor of flourishing while at work.
It’s no wonder that Gallup found only 14% of employees strongly agree that performance reviews inspire them to improve when the processes are centered on their output, not the act of performing the work itself.
You’re expecting managers to do the heavy lifting
The traditional performance management system is built on the idea that managers have a comprehensive view of their employees’ work. The assumption that managers are particularly well equipped to assess performance is fundamentally flawed.
It is true that most managers interact closely with their staff and are responsible for overseeing their work across its different stages. As a result, they often do have the best vantage point from which to observe performance.
However, even when they have tight relationships with employees, most managers are too far removed from the day-to-day activities to make meaningful observations beyond the final outputs and a handful of other data points that often come from secondhand sources. While managers see objective measures such as project completions, sales figures, or customer satisfaction ratings, they are often blind to the actual performance and the conditions under which it occurs.
Another complication arises from the fact that managers directly influence the performance they are expected to manage. In physics, it is impossible to accurately measure both the position and velocity of a particle. In organizations, it is impossible for managers to both accurately manage performance and measure it. Now throw in the number of ways biases influence performance assessments and you have a real problem on your hands.
Finally, most managers aren’t well incentivized to care about performance beyond the most obvious outputs. Having an employee on the verge of burning out or one who has long since quiet quit their job doesn’t matter in most organizations as long as they deliver what is expected.
Most organizations do not dole out the required incentives, training, or the time for managers to dive into performance in its most comprehensive form, leaving HR and talent acquisition to clean up after them as the churn inevitably comes and takes its toll.
You trust self-assessments or 360 reviews
The inherent belief in the objectivity of self-assessments and 360 reviews may counterbalance managerial bias, but these methods come with challenges.
When assessing their own performance or that of their peers, employees are influenced by internal and external factors, including the desire to be seen in a positive light or the pressure to conform to group norms. This can lead to inflated or deflated self-assessments that do not accurately reflect true performance.
360 reviews, while providing a broader perspective, are not immune to biases either. Confirmation bias, halo effects, and social desirability bias can all skew the feedback received, painting an incomplete or inaccurate picture of an employee’s performance. Additionally, these reviews often focus on what is easily observable or top of mind, missing the nuanced, day-to-day behaviors that truly drive performance.
How to build for performance-empowerment
The ultimate goal of performance management should not be to control or direct performance from above. Instead, the goal should be to empower and enable employees to self-regulate their performance directly.
The most immediate implication of this realization is the need to move from manager-led processes to employee-driven ones.
Instead of building administrative layers that are fixated on measuring outputs and behaviors, organizations should go straight to the source. Once leadership has established the vision and goals, employees should be empowered with all the necessary resources, support, and autonomy employees need to propel themselves forward and to learn from feedback that arises directly from their work, not the assessment of it.
For most organizations, empowering performance will require an overhaul of organizational structures, leadership styles, and even the way data and tools are used. For starters, employees should not have to rely on untimely, infrequent, and impersonal feedback from managers to guide and measure their performance. Instead, they should have direct and immediate access to the best possible data that reflects their impact, efficiency, and effectiveness.
Moving from performance management to performance empowerment might also mean joining the likes of Apple and Microsoft in ditching performance reviews and other administrative processes that add little value to the performance.
Once pay and bonus decisions are no longer tied to ineffective and poorly received reviews, companies can take the next step in employee empowerment by creating financial incentives that allow staff to guide their pay by improving their performance.
It is well past time to ditch 19th-century Taylorism and instead embrace our employees as the drivers of their own performance.
