3 Myths About Modern Performance Management

Many companies have made the switch to ratingless performance management and swapped annual reviews for continuous feedback. But for enterprise organizations with decades of running a traditional program, this kind of shift won’t happen overnight.

In our recent webinar with Human Capital Institute, Fact Checking the Latest Performance Management Trends, speaker Alan L. Colquitt, Ph.D., shared on recent performance management trends and how do decide what is the right move for your organization.

In addition to his consulting practice, Alan L. Colquitt, Ph.D., is author of “Next Generation Performance Management: The Triumph of Science Over Myth and Superstition” and retired director for global assessment, organizational effectiveness and workforce research at Eli Lilly and Company, a global pharmaceutical company.

See a few key takeaways from the webinar below, or watch the webinar here.

1. More Feedback Is Always Better

In many software solutions, continuous feedback means collecting feedback continuously throughout the year and from many people, not just supervisors.

But more isn’t always better. “The crowd can’t help me if it doesnt know the context of my work,” Colquitt says.

Feedback tied to projects and collaborators rather than a calendar will be higher in quality and accuracy, and is delivered by “ask for feedback” programs.

The research is clear — positive feedback produces higher performance Click To Tweet

Additionally, the research is clear that positive feedback produces higher performance, while negative feedback is actually damaging. Colquitt recommends a 6:1 positive to negative ratio.

2. Ratings Create a Meritocracy

People are biased and flawed. Ratings will always reflect that, no matter the investment in training (although if you do ratings, training will help).

The small percentage difference in raise or bonus between a top and low performer is not enough to motivate or retain that top performer.

For most companies, the purpose of performance management is to differentiate rewards, and if that’s the case — you’re stuck with ratings. But, the small percentage difference in raise or bonus between a top and low performer is not enough to motivate or retain that top performer, so that complicated differentiation equation is not doing much good.

A better way to run modern compensation is off market-based pay increases and introducing narrow rather than large bands for career pathing. Then, take care of high potential employees with accelerated promotions or special development opportunities.

3. Performance Is the Goal

Today’s performance is not driven by the individual — it’s driven by teams.

Thus, sizing an employee up by individual performance does not accurately reflect what the person is contributing to the company — if, for example, an employee is strong in motivating peers to perform as a group. Team goals is one way to address this new reality.

Colquitt recommends teaching supervisors that the goal is not performance, but progress.

The goal is not performance, it's progress Click To Tweet

This eases the burden of supervisor acting as judge and enables them to act as coach. Feedback can be developmental, not tied to a fixed outcome. Performance management today is focused on weaknesses. Tomorrow’s performance management will be focused on strengths and opportunities.

Watch the full webinar here.

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