by Wrong Design
The performance management system and tools must fit with the specific needs of the organization. It cannot be a duplication of a system designed and implemented in another organization, even an organization in the same industry or the same business group. Intense consultation with various stakeholders and users of the system is necessary. User trust is an absolute necessity for the success of the system. The design should be tried out on a pilot basis before it is rolled out to the organization as a whole. All documents and forms must be in place. The system should be fair and equitable. Performance management should be viewed as a continuous process and not an activity conducted once or twice a year. The design should also include mechanisms for rewarding performance and handling poor performers.
Lack of clarity in vision and objectives
One of the first performance issues which prevents effective performance management is a lack of clarity in what needs to be achieved. A vague vision and unclear objectives leads to situations where employees do not know what is expected of them and the leadership is unable to identify parameters to evaluate their performance. Without specific objectives, there will always be an ambiguity in what constitutes effective performance.
Absence of Integration
The performance management system has to be integrated with the strategic planning and human resource management systems as well as with the organizational culture, structure and all other major organizational systems and processes.
Lack of Leadership Commitment
Leadership commitment and support is a must for smooth implementation of the system. Leaders must drive the process and make performance management an integral part of the management of the company. Leaders contribute not only in setting the strategic direction and performance measures but also in monitoring and reviewing performance across the organization. They also reinforce the performance cycle by recognizing and rewarding performance.
No alignment between employee and leadership thinking
Another performance issue is a lack of alignment between employee and leadership thinking. This is again more relevant to fast growing companies, where a dynamism of vision and best practices leads to conflicting views between employees and the leadership. They may have different notions of what constitutes effective performance, and, thus, achieving the same will have different pathways and metrics for evaluation.
Ignoring Change Management in System Implementation
Strategic management of change is a vital part of implementing the system. Driven by the top management, it involves careful management of resistance. Communication would be a major intervention and a key tool in managing the change. Implementation milestones and schedules must be followed. Proper documents must be in place.
Incompetence
Competence to use the performance management system is necessary to ensure smooth implementation of the system. Some of the major skills would include:
- Defining strategic objectives, performance indicators, core competencies and performance contracts
- Defining performance measures that correspond to the KPIs
- Giving and taking feedback, conducting appraisal interviews, and active listening
- Performance coaching
