Reasons why performance management systems fail

Memory NGuwi

Most performance management systems suffer from two main perennial problems; measurement problem and feedback problem. Regardless of what your system is called these are the main problems that make most performance and measurement systems useless. I know a lot of organisations have different systems, some very old and others new and with fancy names. Unless and until the two problems are addressed the system will not work. You may have noticed that some organisations are abandoning performance assessment completely. Here are the major problems related to performance management.

The measurement problem
Regardless of the system you are using Observed Performance = True ability (effort) + Error (Luck). If your performance measurement system at any level is to be good it must minimise the amount of error in the measurement system. It is impossible to get rid of all the error in the measurement of performance. To reduce this amount of error the system must be as objective as possible. In practice, we know that most of the systems are very subjective making them unsuitable to differentiate between good performers and bad performers. When your measurement system can capture the true ability or effort of the individual in the observation of performance half your job is done. One of the true characteristics of good performance is that whatever is being measured must show some element of consistency. Variation in performance is mainly as a result of an error in the measurement instrument. As an example “playing lotto” does not reflect the true ability or effort of the individual. Whether you win lotto or not is a function of luck more than skill. Most of the performance measurement systems we are seeing on the market are like playing “loto”. They do not reflect the true ability or effort of the employee, instead, they show that luck or measurement error is at play. If your system cannot objectively distinguish between good performers and poor performers it means it’s not a good system.

Feedback Problem
The problem related to feedback is complicated by the first problem of measurement. If your measurement system is not objective and largely correct, giving employee feedback is very difficult. Employees resist subjective and inaccurate systems. This is precisely why most employees hate performance appraisals. However, managers do not seem to learn and they continue with a faulty feedback mechanism.

No consequences: What happens if employees perform and what happens when they do not? If there is nothing in both cases, your performance management system will never work even if you address the first two problems. People change their behaviour because of what happens to them after performing to a certain level.

Long Appraisal Forms
A good appraisal form should not be more than one page. Anything above two pages will be resisted. A good appraisal form prioritises the goals that need to be achieved and these cannot be more than one page.

Not training users
Once all the above key issues are addressed you need to make sure every user of the system is trained properly. When users know how the system should work they normally put effort to do it properly.

Nguwi is an occupational psychologist, data scientist, speaker and managing consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and HR consulting firm. https://www.linkedin.com/in/memorynguwi/ Phone +263 24 248 1 946-48/ 2290 0276, cell number +263 772 356 361 or e-mail: mnguwi@ipcconsultants.com or visit ipcconsultants.com.