The Truth About Performance Management: Four Insights on Making Your System Work

A study by OnPoint Consulting reveals that managers and HR professionals alike are disenchanted with their performance management systems—and suggests some guidelines for changing this reality.

New York (I-Newswire) February 13, 2013 - Many professionals see performance management as a dreaded chore that yields little obvious payoff. A recent study by OnPoint Consulting revealed that fewer than half of the 115 HR professionals and 441 managers surveyed believe that their companies’ current performance management systems deliver value to the business. “We found that a paltry 30 percent of respondents believe their systems achieve their intended objectives,” says Darleen DeRosa, managing partner at OnPoint. While there is no one-size-fits-all solution, OnPoint’s research reveals that there are four key steps organizations can take to optimize their performance management systems:

Resist the temptation to keep making changes. Dissatisfaction drives many organizations to tinker endlessly with their performance management systems. Yet only 24 percent of respondents in OnPoint’s survey believe that reported changes actually improved their systems. “Generally, it’s a user problem, not a system problem,” says DeRosa. “Most systems would work if managers saw them as a way to fulfill an important aspect of their job responsibilities. In addition, we found that the system components that organizations seem to change most frequently do not directly address the primary obstacles.”

Ensure your system has the key factors that impart fairness, accuracy, and value to the business. OnPoint’s survey revealed six critical factors that impact people’s perception that the performance management system is fair, accurate, and worth the time invested: the system is applied consistently across the company, its ratings enable managers to accurately differentiate levels of performance, it helps employees build their skills, it builds a high-performance culture, it provides data that is used for succession planning, and it provides data that drives leadership development. “Unfortunately, most of the respondents in our study do not believe these criteria are in place,” adds DeRosa.

Train managers in all four elements of performance management: goal setting, coaching, development planning, and performance evaluation. “Manager skill in all four of these areas is essential for the success of any performance management system,” says DeRosa. “Without them, no form, rating scale, or technology will make the system work.” The majority of companies in OnPoint’s study provide managers with training to conduct effective performance evaluations, yet far fewer provide skill training related to setting goals, coaching and feedback, and development planning.

Hold periodic review meetings. OnPoint’s study found that the best performance management systems either require or encourage quarterly or periodic review meetings between managers and employees—not including the annual performance evaluation. “By setting the expectation that periodic performance ‘check-in’ meetings are a standard component of their systems, managers are more focused on providing effective coaching and feedback,” says DeRosa.