8 Common Performance Management Mistakes and How to Avoid Them

8 Common Performance Management Mistakes and How to Avoid Them

Are you having trouble implementing a successful performance management plan? If so, you’re likely making the same mistakes as everyone else.

First things first: what is performance management? In essence, it’s a way to close the gap between a company’s desired results and actual results. It’s typically a five-step process:

  1. Establish business goals
  2. Track how your employees meet these goals
  3. Evaluate employee performance
  4. Fix common performance issues
  5. Reward top performance

Sounds simple enough, right? Well, as it turns out, many companies struggle with at least one part of this process. Here are the most common performance management mistakes you need to avoid.

1. Misunderstanding the Process

Many managers confuse performance management with annual performance reviews. In reality, these reviews are only one piece of the puzzle.

The main issue with annual performance appraisal is that it’s a single event. What you should do instead is establish consistent performance reviews. That way, you can fix problems and exploit opportunities as they arise.

Also, performance management isn’t meant to be an administrative burden. Reviewing employee performance should make a company more efficient in a measurable way. It’s not about collecting data that will never get used.

2. Not Thinking Long-Term

When taken at face value, performance management is very alluring. After all, who wouldn’t like the idea of their company becoming more efficient?

Unfortunately, this promise can be a double-edged sword. It often leads to companies applying flavor-of-the-month practices that are a poor company fit. And when results aren’t up to par, they get discouraged.

That’s a common issue with performance management. In the last two decades, we’ve seen all kinds of fads in evaluating results. The one thing they had in common is that they eventually stopped being relevant.

If you want sustainable results, you should think long-term. If a practice seems difficult to sustain, don’t implement it. The more mistakes you make in your performance management, the more you erode its credibility.

3. Optimizing the Wrong Goals

Measuring the success of a performance management process is harder than it may seem. A big part of it is setting goals that won’t backfire on you.

Let’s say one of your goals is that your employees always have something to do. In this case, getting stuff done faster would be a negative. As a result, you may block any initiatives that could improve the workflow process.

That’s a good example of a seemingly obvious performance goal that could have unintended consequences. To avoid these situations, keep checking your performance management data to identify areas you should focus on.

4. Lacking Manager Buy-In

A performance management system requires buy-in from everyone in your company. That’s particularly true when it comes to your managers.

For the program to work, your managers will likely need some help. For instance, they’ll need to know what to say in an appraisal meeting. They also must know how to measure performance or provide feedback efficiently.

Most of all, your managers must know why they should care about this system. In other words, what’s in it for them? If you want to get their full support, you have to sell them on the value of performance management.

5. Lacking Employee Buy-In

Employees should also believe that performance management is in their best interest. Otherwise, they’ll feel that the whole process is pointless.

One way to help secure employee buy-in is to try to help employees on a personal level. All employees face problems in the workplace, so it’s essential to let them provide feedback on it. Try asking these questions:

  • How well do you think you’re doing?
  • What can you do better from your side?
  • How can the company help you be more efficient?

Try to prove to your employees that their goals align with the company’s goals. For example, find a good way to reward their performance. If your company is doing well, your employees should be doing even better.

6. Having Wrong Expectations

Contrary to popular opinion, performance management isn’t a silver bullet. As helpful as it is, it won’t fix every problem with your business.

Think about what you’re aiming to get out of performance management. Are you hoping to develop your company’s purpose? Are you more interested in improving employee performance or your recruitment approach?

No matter what your goals are, performance management isn’t a theory you can apply blindly. Instead, think of it as a bag of tricks. When applied right, your efforts in one area won’t cancel out efforts made in another.

7. Focusing on Individuals

As mentioned above, performance management takes time. If you want to see consistent results, you need to commit to your plan long-term.

For many managers and employees, this can be a problem. If the system says they’re underperforming, they’ll cope by blaming the system. Even worse, they may try to game the system by hiding or tweaking crucial data.

The best way to prevent this is to avoid blaming individual performers. If things go wrong, focus on changing the system itself. Otherwise, you’ll waste much of the time and effort that went into setting it up.

8. Avoiding Negative Feedback

Providing feedback for employees can involve difficult conversations. If a manager isn’t comfortable with it, they may try to avoid it.

Needless to say, this isn’t the way to go. Oftentimes, your employees will have skill gaps they need to fill to advance their careers. A good manager will let them know about it while giving them the support they need.

For best results, try to handle any negative feedback with care. Ideally, you’d prepare what you want to say in advance and rehearse it. If needed, you can get some coaching to increase your confidence.

Avoid These Common Performance Management Mistakes

Performance management is an endeavor fraught with pitfalls, but it’s still a key part of business growth. Want to make the most of it? If so, avoid the common performance management mistakes described in this article.

Looking for other ways to improve your small business? Interested in other examples of soliciting employee feedback? Keep reading our Business section!