Accept Leadership Mandate (#7 Reset Performance Management)

Organizations misleadingly believe that their Performance Management will miraculously separate their people into groups, rewarding the stars and dealing 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 your players. Accept that handling poor performance is a leadership mandate. And no approach will (nor should) take that responsibility away from you.

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

#7: Accept that handling (poor) performance is a leadership mandate and don’t hide behind Performance Management

Many managers erroneously 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 upcoming performance cycle.

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

And there is another aspect that is usually overlooked – the impact of such a person on co-workers. Studies show that 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.

However, managers are usually very uncomfortable with having “that” talk. So, instead of providing timely feedback and dealing with performance and behavioral issues head-on, they waste valuable time waiting for an appraisal process where they can no longer avoid the topic, must give precise feedback, and assign a performance rating comparing achievement levels to 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 the process through staked rankings, which were 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.
Although these initiatives were well intended, making it policy to categorically rate some of their staff as “not meeting expectations” while telling them how much they value and trust them is not the most effective approach, especially for organizations that rely on the expertise and engagement of knowledge workers.

Instead, this approach has a devastating effect on people and teams who strive to deliver outstanding results. In Agile enterprises, the work environment and approach help 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 of which 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 this as part of your leadership mandate and accept that no Performance Management approach will (nor should) take that responsibility from you.

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 conversations 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.

Are you ready to accept your leadership mandate?