Effective performance management systems are difficult to design. Our experience demonstrates that even when HR has developed a best-practice system, there is often a breakdown in implementation at line management level.
The most prevalent reasons are:
Obviously it's impossible to achieve excellent performance management without these basic components. Less obvious is that without them an informal system takes over wherein managers' personal preferences and relationships dictate business decisions such as who receives development feedback, mentoring, sponsorship and exposure.
Because relationships tend to develop between people who are alike, an informal system is particularly detrimental in a diverse workplace and some employees will be disproportionately harmed by inherent bias. While this might not yet be of primary concern to most organizational leaders, our research shows that nearly all developed countries will have significantly more diverse workforces in the next 5-15 years.
Get the line involved
So what can you do to help line managers effectively implement a performance management system? The following recommendations are not exhaustive, but address the most common barriers we've encountered.
First, build and communicate the business rationale for superior talent management. Gain buy-in and active support from leaders to hold both themselves and line managers accountable for effective performance management.
Make the system relevant by involving line managers in its design. This ensures that competencies cover the criteria on which they really make decisions. Work with them until evaluation criteria are observable and measurable, directly related to productivity, objectives and/or organizational values and policies. This ensures non-biased, effective means to judge and improve performance.
Management skills training should include induction, giving feedback, coaching and employee development. Make sure training on valuing and managing difference is included. For example, an important but often overlooked tool is guidance on how to express performance problems. Unskilled managers tend to use phrase such as "lacks motivation," or 'not focused." These sometimes reflect stereotypes and cultural misunderstandings. Effective phrases should relate directly back to the evaluation criteria. Examples might include "misses key deadlines," or "failure to meet specific objectives."
Complete the cycle
Last, if you truly want to achieve an effective performance management system, complete the cycle: Invite employees to give feedback on their experience of the system. Specifically, teach employees what to expect from their managers in a performance review and/or a development discussion and give them pointers on their rolls in the process.
Then require employees to complete a carefully constructed anonymous feedback form describing what the management actually did. Keep the employee's choices behavior-based and highly specific and, of course, avoid calling this an "evaluation." The fact that managers know employee feedback data will be sought creates a major incentive for them to learn and exhibit excellent skills.