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How To Deal With Poor Performance Management

How To Deal With Poor Performance Management
Summary: Old techniques of performance ratings, based on subjective decision and judgment for rating employees during the appraisal time, are old-fashioned.

What Poor Performance Management Can Cost Your Business (And What To Do About It)

Industry innovators such as IBM, Google, and Netflix have made headlines for pioneering large-scale changes to their traditional performance evaluation management.

According to Gallup, an American research-based workplace consultant, "Poor performance management at a workplace is leading to lost productivity in the United States, because of which there are heavy financial losses between $960 Billion and $1.2 Trillion per year."

What Leads To Poor Performance Management?

"Only 2 in 10 employees strongly agree that their performance is managed in a way that motivates them to work", as per Gallup's report.

This research also highlights the following traditional approaches to performance management as the primary reasons that leave employees disconnected at a workplace.

  1. Obsolete performance ratings
    Rating employee performance on subjective decision and judgment during the appraisal time, without stating different procedures following rating, can leave your employees disgruntled.
  2. Forced ranking
    The system for evaluating employee performance relatively with other employees is of no use. There is a need to figure out the employees who are performing well and then rank them in a higher hierarchy of the organization.
  3. Disengaged millennial workforce
    Only 29% of the millennial workforce feels engaged in their workplace, and the remaining 79% is either disengaged or highly disengaged, as per the Gallup’s report published last year. And this is one of the reasons that is worrying L&D experts.
  4. Lack of personalized and goal-oriented training
    The old style of workplace training leaves a bad taste. Delivering corporate training that is not goal-oriented or does not help employees in their future growth at a workplace is counterproductive.

Optimizing Performance Management: 3 Case Studies

Optimizing performance management has always been one of the concerns of global business leaders. Let's discuss these practices.


For IBM, past performance is the best predictor of future success. IBM evaluates employee performance on the basis of past accomplishments/failures, as well as on the basis of how an employee might perform in the future.

IBM has deployed Artificial Intelligence (AI), Watson Analytics for future prediction of employee performance. The AI application looks at an employee's experience and projects to infer the potential skills and qualities they may serve in the future.


People operation system at Google's headquarters in Silicon Valley is one of the most talked topics in human resource and corporate training professionals. Google has formulated the OKR (Objectives and Key Results) strategy to manage employee performance.

The OKR strategy follows the well-defined process of the Performance Review. Google asks its employees to review each other on the basis of different metrics of Googleyness (employee's adherence to Google's value), problem-solving capabilities, execution of work, thought leadership, and presence.


Many years ago, Netflix eliminated the process of formal performance reviews, after realizing that they are too infrequent and too ritualistic. Instead, Netflix asked managers and employees to engage in frequent conversations about the performance as an organic part of their work.

Netflix believed that conventional approaches to corporate performance reviews are driven by the fear of litigation. The outdated models for performance reviews also include 'Performance Improvement Plan' or PIPs, in which low performers are carefully observed during their jobs.

Instead, Netflix kept the entire process as simple as possible, and instituted informal 360-degree reviews. Employees identified the tasks that their colleagues should start, stop or continue doing. In the initial phase, Netflix deployed an anonymous software to identify these tasks but later moved to the paper signed and face-to-face feedback.

4 Tips For Optimizing Your Employees' Performance

Defunct approaches to performance management have become obsolete. You need to adopt the following frameworks that are efficient to help you meet current as well as future business goals by managing and optimizing employees' performance.

1. Restructure The Employee Appraisal And Review Process

Businesses need to understand that traditional approaches to performance management, employee appraisal, and reviews have become vague. These approaches are not yielding the desired results and are resulting in unwanted psychological pressure among employees.

The starting point for optimizing employee's performance should be to transform the performance management and reviews to an opportunity for performance coaching.

The focus needs to be on institutionalizing the culture where employees can freely have a conversation with their managers and colleagues regarding the reasons behind the poor performance. As a business, you need to delve into the reasons that cause unsatisfactory performance.

You may also need to tell employees about different course correction measures that they can adapt to regain the confidence to perform better.

2. Align Daily Actions Of Employees With Strategic Business Objectives

In the competitive business environment, it is important to align daily actions of employees with the strategic business objectives to achieve optimal performance management. There are 2 different ways of aligning the daily actions of employees to your business objectives:

  • Create SMART goals and measure employee progress
    Businesses have a key metric (KPIs) for measuring and evaluating employee performance periodically. But, for reviewing if employee performance is at par with the organizational business objectives, it is important to develop SMART goals for employees. Setting SMART goals and ensuring that these goals are according to the defined business objectives helps the organization in reviewing performance gaps of employees and later plan different ways to optimize it:

    • S = Specific
    • M = Measurable
    • A = Attainable
    • R = Relevant
    • T = Timely
  • Give 360-degree reviews to employees
    It is advisable to give 360-degree reviews to employees for comprehending if employee performance is aligned with the strategic business objectives or not. This review process helps organizations to measure if employees are performing according to the organizational business objectives or not. The process of 360-degree reviews to employees includes feedbacks from peers, managers, and other stakeholders.

3. Deploy Technologically Advanced Workplace Analytics

There are several technological advanced workplace analytics tools that help businesses automate the entire process of performance management. Workplace analytics tools, such as Microsoft Workplace Analytics and Watson Analytics are famously and commonly used.

These tools use data for analyzing the performance of employees and the work culture of the business. After analyzing, these tools recommend the changes that a business needs to put in place.

4. Keep Employees' Learning And Development At The Center Stage

One of the crucial ways to optimize performance management is to keep employees' learning and development at the center stage. It is important to analyze if the culture of corporate training and the organizational business objectives align or not.

Old practices of workplace training are leaving employees dissociated and unmotivated. Delivering corporate training that is not goal-oriented or does not suffice to employees future growth at a workplace has become obsolete.

It is becoming increasingly pivotal to cater to specific learning needs of employees by delivering corporate training, that is customized, interactive, and goal-oriented.