I believe the graphic to the right says all that needs to be said about the ineffectiveness of performance ratings for driving employee productivity and engagement. In my book "Ratingless Performance Management", I review the history of performance management systems and how companies have tried over the decades to alter their approach to somehow find that elusive "sweet spot" of rating categories levels. Yet none have proven to be effective at delivering a positive experience for the majority of employees in organizations, regardless of how rating categories are described. The simple truth is this; employees do not like to be labeled, unless of course that are given the top rating!
Unfortunately most organizations have had decades of experience utilizing programs that follow the historical norms of performance management, and the longevity of these norms have limited practitioners' comfort level with implementing innovative solutions that significantly deviate from these norms. Unless companies implement a system that addresses the employees' concerns with these programs, the ability to maximize workforce productivity and employee engagement will be limited.
So what are employee concerns? Both my research and experience has shown the following:
They feel the process is inherently unfair, being too narrow in its assessment to make appropriate decisions.
They believe managers often incorporate their personal biases and subjective viewpoints into the process.
The think the process is overly weighted on past performance versus career development.
Many employees feel the performance discussion is more of a one-way street than a dialogue.
And above all else, as mentioned above, the majority of employees do not like to be labeled
These concerns are not new, and I'm sure many of you reading this can attest to experiencing feedback relating to some if not all of these. So why is this period more critical than the past for finally addressing performance management program limitations? Because the new workforce generations, the Millennials and Gen Z's, have significantly different expectations than Baby Boomers and Gen X's. The latter two have lived under existing programs for years, and have come to grudgingly and unhappily accept them, even though they agree with the bullet points above. The newer workforce generations have a completely different take. They are more independent, desire flexible schedules, are more concerned with ethics, social responsibility, and work/life balance, and above all else, have an expectation that career development should be a company priority.
Given these expectations, it is inevitable that continuing with existing performance management platforms will only create barriers to employee engagement of these groups. Their desire to be judged on quality of output versus hours worked and recognition through robust career development programs would indicate that we have finally reached the tipping point where more innovative change to performance management programs are a necessity for maximizing workforce engagement, skill development and productivity.
I welcome you all to share your comments and experiences regarding this topic. The more we share, the more we generate creative thought that feeds innovation.
Next month we will continue the dialogue when we discuss the key tenets to implementing a successful ratingless performance management system!