Performance Management: Evaluation or Empowerment?

What if performance evaluations were actually tools to optimize employee engagement and performance? 

It’s long been argued by many HR professionals, researchers, managers, and employees that performance management evaluations do little to enhance employee performance and engagement.[1]Over 58% of HR executives in a recent study from the Center for Effective Organizations graded their own performance management systems as C or below.   Recent research on autonomy motivation indicates that current performance evaluation practices may actually serve to reduce employee motivation and engagement, particularly if emphasis is placed on manager ratings of employees explicitly tied to financial rewards. It’s no wonder that researchers have long suggested that doing away with the current process of standardized year-end performance evaluations might actually improve employee morale and engagement. Replacing your standardized year-end performance evaluations with HR Analytics may help your company to find other pain points within management.

But what if performance evaluations were actually designed to optimize employee engagement and performance?  What would the process look like?  How would the forms be designed? What content would be assessed? What data and metrics would managers and employees most want to capture to enhance individual and organizational performance?   Here are some thoughts to prompt discussion on this mission critical function:

  1. The primary purpose would be knowledge management in the service of performance management – to generate knowledge about what factors enhance or inhibit operational effectiveness and the quality of outputs/outcomes.
  2. The primary content to be assessed would be people and process contributions and barriers to operational effectiveness and quality of work outputs/outcomes – not individual performance in abstraction from process.
  3. Evaluations would be employee and peer centric, not manager centric.  Employees and their peers doing the work (team members or others participating in a defined business process) would evaluate performance of (a) the overall effectiveness of the process, including factors that inhibited or enhanced effectiveness and quality of output, and  (b) their individual contribution to the process and quality of output – strengths and limitations.
  4. Quality job descriptions would become strategically important for effectively managing performance.  Evaluation forms would focus on performance of role-specific responsibilities that accurately reflect the business processes related to the employee’s job and/or the functional teams on which the individual participates.
  5. Evaluation of performance related to departmental and team goals would also be relevant – particularly for sales positions and higher level managerial positions managing to specific performance metrics.  Behavioral factors / competencies would be identified as factors that either enhance or inhibit process effectiveness and quality of outputs.
  6. Year-end compensation decisions would be conducted separately from these evaluation processes, and would be based on (a) achievement of relevant business process efficiencies and effectiveness and quality of outputs over the year, and (b) manager-employee assessment of the employee’s contribution to those results.

What keeps us from breaking out of the old evaluation paradigm and orienting our processes toward empowerment of employees and process and quality improvement?  In the opinion of this researcher/practitioner, here’s why:

  • HR is still overly focused on compliance and legal defensibility regarding management of employees, rather than optimizing performance.
  • Performance evaluations are overly focused on justifying individual compensation and discipline decisions rather than actually trying to optimize performance.
  • Organizations and technology providers have failed to meaningfully integrate performance evaluation processes and metrics with ongoing business process improvement efforts –both from a process and technology perspective.
  • Job description content and competency profiles do not accurately reflect the actual work being done and the processes and outcomes expected.

We see performance management through the four lenses of process, content, technology, and analytics.  Performance management systems that look for shortcuts also short change employees, managers, and their organizations.  Haven’t we had enough of the old employee evaluation paradigm?  Isn’t it time to consider employee empowerment through knowledge sharing in the service of ongoing performance improvement?

Your thoughts?

[1]Coens, T. & Jenkins, M. (2000).  Abolishing Performance Appraisals: Why they backfire and what to do instead. San Francisco: Berrett-Koehler Publishers, Inc. Buckingham, M. & Coffman, C. (1999). First, Break All the Rules: What the world’s greatest managers do differently. Pages 222-229 on Performance Management.  New York: Simon & Schuster. Pink, D.H. (2009). Drive: The surprising truth about what motivates us. New York: Riverhead Books.

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