Performance Management: A Requirement of Leadership

Every so often, The Wall Street Journal runs a special section called “C-Suite Strategies.” The most recent offering, on Sept. 19, 2022, was especially compelling.

The main headline reads: “The Performance Review is Back.”  My question is this: Where did it go? And more to the point, why?

As organizations adjusted to a new way of working during the pandemic, a consensus emerged that doing performance reviews was simply not a priority in this rapidly shifting environment. It’s not surprising that supervisors and employees alike enjoyed the hiatus. Research shows that neither are enamored of the process but for different reasons.

Managers aren’t comfortable giving feedback that may not be well received. Many don’t feel confident in the process, nor in their ability to engage their direct reports in a meaningful discussion about performance and areas of needed improvement.

Employees see the performance review as a perfunctory, “check-the-box” requirement that does little to recognize their efforts nor help them improve. Many feel it is done simply to rationalize a pay increase (or not). However, just because something is being done badly does not render it unnecessary.

One of the primary responsibilities of leadership is to provide clear direction for the enterprise and to ensure that team members understand their responsibilities and where they stand performance-wise. Clearly articulated and communicated statements of mission, vision and values are important first steps and set the stage for an effective three-step process for performance measurement.

First, each team member should have a list of job responsibilities, plainly written and prioritized in order of impact on the success of the plan (if everything is a priority, nothing is). These should align with the organization’s mission.

Next, each employee should have succinct, clearly stated, and measurable goals which are reasonable and provide a meaningful challenge. These reflect the company’s vision.

Finally, identifiable and observable behavior standards are agreed upon, closely monitored and evaluated.  These emanate from the organization’s values.

The temptation to shelve a broken process is understandable. Organizations that rise above this by implementing a dynamic performance evaluation system can create a sustainable competitive advantage that sets them far apart.

For more information on the Dynamic Performance Management Process, contact me at joe@ajstrategy.com.