Why Is Performance Management Broken?

Abstract

Although extensive research and practice have focused on understanding and improving performance management systems in organizations, the formula for effective performance management remains elusive. We propose that a significant part of the problem is that performance management has been reduced to prescribed steps within formal administrative systems that are disconnected from the day‐to‐day activities that determine performance management effectiveness (e.g., communicating clear work expectations, setting short‐term objectives and deadlines, and providing continual guidance). We argue that interventions to improve performance management should cease their exclusive focus on reinventing formal system features. Although well‐developed tools and systems can facilitate performance management, these alone do not yield effective performance management. In lieu of making further changes to formal performance management systems, we argue for devoting more attention to improving manager–employee communication and aspects of the manager–employee relationship and propose an approach we believe holds promise for improving performance management processes in organizations.

Performance Management Can Be Fixed: An On-the-Job Experiential Learning Approach for Complex Behavior Change

“…Contributing to PM's bureaucratic and administrative emphases are implementations of PM processes that tend to focus on how to use automated systems and tools to complete PM activities. Pulakos and O'Leary (2011) further identified several unintended consequences of PM "best practices" that have undermined PM effectiveness and user satisfaction. Examples of these unintended consequences include the following.…”

“…Microsoft recently announced that it was eliminating forced-rank ratings, and General Electric has made similar reforms (Bass & Green, 2013). There is a consensus that PM is broken, but given a long history of failed attempts to fix it (Pulakos & O'Leary, 2011), the looming question is this: What exactly should organizations do? This article presents a promising five-step PM reform process, along with examples and results from our experience implementing this approach.…”

“…These attempts to fix PM have led to vicious cycles of reinventing PM processes only to achieve disappointing results and then reinventing these processes again and again (Pulakos, Mueller Hanson, O'Leary, & Meyrowitz, 2012). Pulakos and O'Leary (2011) have argued that, over time, formal PM systems have become increasingly bureaucratic and disconnected from the day-to-day activities they were initially designed to promote, such as communicating clear expectations, setting objectives, and providing quality feedback. Contributing to PM's bureaucratic and administrative emphases are implementations of PM processes that tend to focus on how to use automated systems and tools to complete PM activities.…”

“…As an alternative to continuing to reinvent formal PM systems, which has not proven fruitful, Pulakos and O'Leary (2011) proposed changing course and focusing directly on driving critical PM behaviors that have been shown to increase engagement and performance. This suggestion was based on CEB Corporate Leadership Council research (Corporate Leadership Council, 2004), which showed that employee performance and engagement are substantially higher in the presence of several key PM behaviors: managers setting clear expectations, providing regular informal feedback, and helping employees develop and succeed.…”

Personal development plans: insights from a case based approach

“…For some time, researchers have questioned the validity of performance management as a tool which actually delivers these results (Haines & St-Onge, 2012;Pulakos & O'Leary 2011). Where performance management per se is seen as not working, many organisations rely solely on an annual appraisal as their means of managing performance and this has attracted the most critique.…”