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I’ve written about the pitfalls of performance management before. I’m convinced this is a really difficult area in lots of companies. I regularly hear stories about poor implementation of performance management and the problems this causes.

The trouble is, of course, there aren’t many things that de-motivate employees more. A badly prepared performance appraisal or cancelled one-to-one meeting can have huge impacts on morale. If there is a pay rise or bonus riding on the outcome of a performance appraisal, then the stakes are high; particularly if the employee had little control over the achievement of the objectives he was set in the first place.

Companies often convince themselves, however, that they must have a ‘robust performance framework’ in place no matter what implications this brings in practice.

I suppose if companies are to have performance management systems, there are some key components they need to have in place. One is that the system should be simple and easily trained out to staff on their induction or training days. Another is that there should be consistency in the way managers apply the system across departments – senior managers must have checks and balances in place to make sure this happens.

However, some companies have developed differently in this whole area. These are some of the things they often focus on:

  • Implementing structures that provide immediate feedback to an employee when something is achieved (or a problem arises) rather than waiting for a scheduled meeting that may take place some time in the future
  • Promoting schemes that encourage employees to feedback to each other – including 360 degree feedback 
  • Encouraging individuals to seek feedback from people other than their direct line manager
  • Agreeing team goals and rewards – allowing teams to set goals and then work to achieve them together
  • Moving pay structures away from being linked with the performance management process and determining them by reference to external comparators and benchmarks.

Finally, many companies that lead in this area work hard to equip managers and team leaders with ‘real’ coaching skills and the tools to give effective feedback. A problem with ‘traditional’ performance management systems is that those giving feedback are often not trained, through no fault of their own, on how to do this successfully.

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