Nick Ruhmann
November 08, 2016

ARTICLE: The 'Performance Management' Myth

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I honestly didn't think this was still a big argument.  I thought this was something that was pretty well understand, but alas, recent conversations have proven me wrong.

There are still many people, organizations, and authors espousing the benefits of "Performance Management" and "Pay for Performance".

Here's the rub.  Neither of these phrases are bad.  We'd like to manage for performance, and reward people for performance.  Merit is a good t


hing right?

But in implementation these buzzwords almost always rely on a couple underlying conceptions:

  1.  Employee effort is the driver of performance
  2. Leadership is the recipient of that performance

In other words, we (leadership) need better results, so you (employees) need to do do well and we'll reward you.  Do poorly and we'll replace you.

What's so bad about that?  Nothing I suppose, considering it's all up front and every party knows what they're agreeing to when they step into the roles...

But what if I told you I've seen a different way?  A way that actually gives better results?  But requires you to change your perception?

This isn't "surrendering" as one well known consulting group puts it, this is questioning the underlying assumptions about what drives performance to begin with...

1. Is Employee effort the driver of Performance?

 ""A manager of people needs to understand that all people are different. This is not ranking people. He needs to understand that the performance of anyone is governed largely by the system that he works in, the responsibility of management. A psychologist that possesses even a crude understanding of variation as will be learned in the experiment with the Red Beads (Ch. 7) could no longer participate in refinement of a plan for ranking people." - W. Edwards Deming, 1993

If you're not familiar with Deming's Red Bead experiment you should be.  Deming was proving to executives way back in the 80's and 90's that most of the performance was being driven by the systems, or processes within the company, not individual effort.  

Business Processes are are owned by management.  Design of these determines 80-90+% of the outcome.  That's right, most differences between employees are actually statistical sampling error.  When it's not, it means you have a process highly dependent on a physical or mental attribute, and that's not good either.

Ever terminated an hourly employee for "poor performance?"

Is it unsettling to you that know you might have had more to do with that low performance than the employee?  

Yeah it's unsettling to most leaders...which is why many choose to ignore it.

When the problem is YOU, it is indeed a hard pill to swallow.

I don't want employees to have to work that hard to be right.  I want the process "easy to be right", so they can use their brainpower to think about how to do the process even better.

"A job so easy a monkey could do it?" - maybe...but you'd be missing the point.  I don't hire someone for their ability to do a repetitive task all day long...I hire them because they have a human brain, uniquely developed for solving problems.  I want that brain watching the process, involved in the process, testing out new ideas, etc.  

Not worrying about making a mistake that might ruin their "scorecard score".

2. Is Leadership is the recipient of employee performance?

Also depends on your perception.  

When you think of the organizational structure of a company, do you place the CEO on top of the pyramid? A grand leader overlooking his/her empire? 



Or do you put the CEO at the bottom, the first of a series of servant leaders...who recognize that it is often the lowest paid worker who is in direct contact with customers.  The temp or new hire is actually full-filling the purpose of the company, the CEO is not.

Who exactly is serving who again?

Who should be evaluating whose performance again?

So when you say "Performance Management", where will you measure and manage this performance?  Per individual employee, or as the outcome of processes?

What if instead...we just did "Process Management".  What if we focused on the process, and improved the systems so that everyone could do better?  

What if managing performance is exactly what we want to do, but we should be looking in the mirror instead of cracking the whip?

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