The intersection between HR strategy and HR technology

What’s wrong with Talent Management – Part 1

Let’s think about this. Evaluating performance is a good thing, right? So as an HR practitioner (and being realistic about it), how many organizations do you know that apply performance well? How many performance plans have you seen where the performance process actually impacts increases in engagement and productivity?

Let’s face it, performance management is backward looking. By the time you’ve decided to review and reward the employee, the work has already been done. Most managers and employees look at performance plans once or twice a year, and by the next review, the large majority of us have forgotten what our goals were. Put that on top of the fact that 99% of all goals out there have been written to be achieved. In other words, you can achieve your goals even if you forget them simply by doing your job and nothing more. The evaluation of performance (and the provision of a reward) one year later really does nothing for the employee. Bonus plans are nice, but they are based on a quantitative measure of performance without a measure of employee growth.

Not only is performance backward looking, but it does nothing to inspire forward looking enhancements. So the plans for employees to retrain or retool their skill sets are most often poorly designed and implemented. On top of that, there really isn’t any proof that the achievement of the goals actually improve performance beyond what would normally happen if the employee simply performed their work without a performance plan.

My basic hypothesis is that the performance plan and process does not actually improve performance when compared to a non-performance plan environment. My problem is not only do I believe this, but I don’t see a fix for it. Talent management vendors who are selling performance systems are not a solution because until a new theory on performance is brought forth, EPS systems only automate a broken model. Software in this case, is not an answer.

I’m proposing that we scrap performance systems and we pursue increases in employee engagement and mixes of total rewards that are more attuned to employee needs, but we can throw out the old practice of measuring performance scores that is largely meaningless.

9 comments

  1. Interesting!! I am interested in pursuing this line of thinking with you…

  2. Likewise, I think this is a seed :-)

  3. Great post Dubs. My opinion is that nearly all companies still lack the analytical framework to accurately assess the economic contribution of an individual employee. Without that you’re just dressing gut-instinct procedures up in scientific drag.

  4. Dubs – unfortunately, this is true. I do see improvement over the performance assessments from my early days in the workforce (’87-’88). But that’s not saying much.

    One thing we’ve now adopted at T-Mo is a quarterly review. Q1 ’06 will be our first stab at it, and I certainly believe it will be better. But the need to focus on true goals (those that stretch us – develop us), rather than those that can be accomplished w/little to no thought, have to go away.

    Dennis

  5. John McCoy /

    Of course, some organizations practice performance evaluation as a backward-looking process, use goal-setting to show stakeholders what they would have done anyway, and use goal accomplishment as a means to justify their efforts. I have worked in such organizations.

    Other organizations use goal setting as a means of stretching their capabilities, goal accomplishment as a cause for celebration, and evaluation as a means of assessing future capabilities. I work in such an organziation now.

    The point is that a well-designed performance management system is a framework and set of tools. The difference in whether it helps improve results or not is in how it is used, maintained and cared for.

    Such a system is not a replacement for the long conversation that takes place about what gets done and how it gets done. Its value is in how it facilititates, encourages and aligns those conversations. When that happens, the results can be astounding.

  6. Dubs,
    I could not agree more when you say we are operating with a broken model when it comes to performance reviews.

    I have some ideas on a fix that are not too far off from yours. For instance:

    http://learningvoyager.blogspot.com/2005/11/most-wonderful-time-of-year-this-is-my.html

    Terry

  7. Steve McDonnell /

    This assumes that the performance plans also serve as personal development plans. Take an example where the performance plans aren’t working. Look at what was accomplished during the year. I’ll bet it’s aligned with what’s on the performance plans. What gets measured gets done and perhaps that should be the only expectation of what a performance plan as described can accomplish.

  8. HI there, I am interested to read your views on performance management and personal development.

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