Why Are You Measuring Performance?

June 20, 2016

Why Are You Measuring Performance?

“What do you think of performance appraisals?” I get that question a lot. My answer is: “It depends.”

The “it depends” response comes from a deeper question about what companies really want to achieve with these evaluations.  Are you just checking a box for legal reasons? Do the results of the annual appraisal become the basis for compensation? Or, are you actually seeking to help employees perform at their highest level?

Performance management cycle graphic

If the performance evaluation is one part of an overall performance management system, it can be valuable. But if the annual performance appraisal is the only discussion of performance during the year, that is bad news all the way around.

The Value of Goals

Imagine for a moment that your bucket list includes a trip to France.  To achieve that, you write it on the bucket list and wait for it to happen, right?  Of course not.  You figure out what you have to do to take that trip, from having enough money, to creating time and space in your life, to covering all of your responsibilities while you are gone. You likely set some goals for achieving those things, and then monitor your progress toward each of those goals, adjusting things as you go to ensure you actually make that trip. Just saying you want to take the trip will not ensure you a tour of the Louvre.

So how is asking employees to perform well any different? Can you just say, “Here’s what I want you to do in the next year, and by the way, do it really well?”

Where Feedback Fits In

Well, maybe with a few high performers, that would work. But I promise you that strategy will cause even your highest performers to disengage. The SHRM Foundation’s 2016 report, Creating a More Human Workplace Where Employees and Business Thrive, encourages providing positive feedback to employees: “Good feedback builds feelings of thriving because it helps people know where they stand in terms of their skills, competencies and performance.”

Employees need goals to strive against. Those goals need to be monitored continuously, with regular feedback from supervisors (coaching) that may include course correction based on progress, on organizational changes, or even on individual situations that arise. It should also include recognition of a job well done and ongoing incentives that individually motivate the person.  Finally, the process should include formal evaluation against individual goals and performance requirements.

So what does your performance management system look like? Is it a strong tool for engaging employees and building ROI, or are you just checking a box?

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