Author: Fabiola Eyholzer

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Organizations misleadingly believe that their Performance Management will miraculously separate your people into groups and reward the stars and deal with the low performers. They might even apply forced rankings to guarantee an adequate separation between the two. Stop pretending! You don’t need annual reviews to know who your players. Accept that handling (poor) performance is a leadership mandate. And no approach will (nor should it) take that responsibility from you.

Many managers misleadingly rely (too much) on Performance Management to reward their stars and deal with their low performers. As a result, “problem” employees are subtly ignored throughout the year in the hope that the year-end process will take care of their inadequate output and that a subsequent development plan will turn things around for the better in the coming performance cycle.

However, it rarely turns out like that. The reality is more a series of more uncomfortable discussions and after months and months of trying to make things work, the realization sets in, that only a hard cut will do and the employee is released into the internal or external job market. But by that time, emotions are running high and bridges are burnt.

And there is another aspect that is usually overlook: the impact of such a person on co-workers. Studies show one bad apple in an otherwise high-performing group can bring down productivity by as much as 30-40%. That is something you cannot ignore.

But manager are usually very uncomfortable with having “that” talk. So instead of providing timely feedback and dealing with performance and behavioral issues heads-on, they waste valuable time and wait for an appraisal process where they can no longer avoid the topic and must give precise feedback and give a performance ratings compared to achievement levels of other employees. This is another chore managers dislike, especially when such distinctions necessitate difficult discussions about mediocre or poor performance.

HR tries to support managers in that process through staked ranking. Initially implemented to guide managers with a tendency towards uniform, often exaggerated, ratings. The idea was to “force” managers to differentiate and have an in-depth dialogue with their employees in order to give distinguished feedback and identify development opportunities.

These initiatives were well-intended, but making it policy to categorically rate part of your staff as “not meeting expectations”, while we walk around and tell them how much we value and trust them, might not be the most promising way to go. Especially for organizations that rely on the expertise and engagement of knowledge workers.

It has a devastating effect on people and teams who strive to deliver outstanding results – and in agile enterprises the work environment and approach helps ordinary people to produce extraordinary outcomes. And let’s face it: If you have 20% low performers you definitely have a recruitment and leadership problem – neither is fixed by forced ranking nor an annual employee rating.

Yet hordes of managers still rely on performance management as a leadership tool to deal with inadequate performance and behavior. But the reality is: You don’t need an annual review to know your champions from your slackers. And you certainly cannot afford to wait for an annual appraisal to deal with people issues. It is time to embrace it as part of your leadership mandate and accept that no Performance Management approach will (nor should it) take that responsibility from them.

Pay attention when building a powerful team by hiring slow (with consideration) and firing fast (with integrity). And focus on inspiring people, giving direction, removing impediments, and doing everything possible to help them thrive and grow.

Invest in regular face to face conversation and interactions and provide fast feedbacks. Also remember bosses of knowledge workers are often knowledge workers themselves. This makes the role of coach and mentor even more important. Develop a relationship in which you give knowledge workers the freedom and support they need to do their work. So that you can bring out the best in your people and develop them.

This article is part of the series “How Lean | Agile Enterprises Push the Reset Button on Performance Management”

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This post was contributed by Fabiola Eyholzer, CEO of Just Leading Solutions, LLC. More information about Fabiola, Agile HR and the services of Just Leading Solutions can be found at www.justleadingsolutions.com.